Our offer was recently accepted by seller to buy a home. The seller insisted on a 30 day escrow, so we agreed and signed a contract.

Asked by kennybozzle, 91702 Fri Oct 18, 2013

We currently rent, so once we opened escrow, we gave 30 day notice. Now, 20 days in, the city says there are no permits for additions, and it could take weeks to work it out. We have already packed, gave notice, and put several hundred dollars into inspections, etc. If the seller can't close by the end of the 30 days, do we have any legal recourse?

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8
John Arendsen, Agent, Leucadia, CA
Sat Oct 19, 2013
I've actually been down this road a time or two. Never used an attorney, however. A good broker should be able to assist you in this matter if they really want to save the deal. But if they don't or won't and you're out $$$ then you might have to resort to an attorney. Hate to see you have to do that because it usually ends up costing you more for the attorney than what you've already invested. Good luck.
1 vote
Lance King, Agent, San Francisco, CA
Sat Oct 19, 2013
I'm not an attorney either but I would think you have an excellent case for making the sellers pay your expenses for additional fees incurred because of this situation: storage, hotel/other accommodations, etc...

I would propose the following solutions to the sellers and let them choose:

1. You are willing to wait for them to get necessary permits, but they reimburse you for your expenses.
2. You take the property as is for a significantly reduced price.

If neither of those get you anywhere or aren't acceptable, call a real estate attorney to find out exactly what your rights are.

Best Regards,

Lance King/Owner-Managing Broker
King Realty Group

lance@king-realtygroup.com
415.722.5549
DRE# 01384425
1 vote
Emily Knell, Agent, Huntington Beach, CA
Sat Oct 19, 2013
I am not an attorney, but I'm going to offer you my professional opinion since I've been in this situation before. I don't think it will take 4-10wks, first off. But I don't think you're going to have recourse against the seller since it's typical in all real estate purchases for contracts/escrows to be 30 days.

See, it's kind of a double edged sword here; On the one hand, the Seller Must disclose what they know about the property to you. If the current seller is the one who did the additions, then it's likely that if 20 days into your escrow you're just now finding out that the additions are not permitted, it sounds to me like the Seller purposely lied or withheld information to you that they should have otherwise disclosed.

On the other hand, if the additions were made a long time ago, before the current owner moved in & if they didn't investigate proper permits before they moved in (which is stupid, but happens), they can just say "I didn't know" & it's on You, because You should have found this out during Your Due Diligence period.

If you knew there were additions on the property, within the 1st 5 days of your Due Diligence period you should have been checking with the city re; permit history. If you go to the seller looking for recourse based on this, they're just going to say "Check the RPA, you're supposed to look for this on your own as part of your inspection period."

Again, for my own safety I need to say, I'm not an attorney, these are my professional opinions.

On Monday, you need to call the city or check the city website (many cities make it easy now to check permit history by Street, online) & get the permit records. If permit records do not exist, you need to have the city building inspector come out & they will tell you if the work was done correctly & to code. If not, they will tell you what needs to be done to bring it to code so it Can be permitted.

I suggest you call your landlord immediately & tell them about your escrow & situation & ask for an extension on the lease. Your landlord has likely bought & sold at least a few properties before & will hopefully understand that there are bumps in the road in any escrow, yours being a slightly larger bump. Hopefully your landlord has not signed a new lease yet with another tenant,,,they're normally only concerned about not having a vacant property for a month & will be happy to get another month rent or so from you.

Shoot me an email directly or give me a call if you'd like to discuss this further, I don't look back on this same Trulia posting for Replies or Answers posted after mine.

Emily S. Knell
EmilyKnell1@yahoo.com
562-430-3053 c
Realtor Since 1996
Realty ONE Group
1 vote
Bill Eckler, Agent, Venice, FL
Sat Oct 19, 2013
Anyone entering into a real estate transaction with time constraints such as yours should be made aware that "bumps in the road" are fairly common and that great care should be given to alternative arrangements should things take an unexpected turn.

Legal recourse? As previously stated, only an attorney can clarify this but one thing is for certain. I would recommend that you begin to consider making arrangements for a place to live in the event the closing date can't be honored. I would consider beginning with your present landlord and seeing if you might be able to extent your stay if necessary.

Good luck,

Bill
1 vote
My NC Homes…, Agent, Chapel Hill, NC
Sat Oct 19, 2013
This is a question for a local real estate attorney. What I can tell you is under no circumstances should you purchase the property without the Seller getting all necessary permits for the work that was done and this is going to likely take anywhere between 4-10 weeks or possibly longer depending on what was done. If you improve forward and buy the home you assume liability for the permit problems and while it's not likely it's definitely possible that you could be forced to actually remove the additions.

You should be speaking with your buyer broker (I hope you have one) and if you're prepared to hang in there (assuming the Seller is prepared to do whatever is necessary to clear the clouds on the title) then you should immediately speak to your landlord to see if it's possible you can remain where you are for another month or so. If you can that's great, if not then you're going to have to make alternate plans and these expenses need to be discussed with the Seller.

While it's possible you could ultimately sue the Seller to recover all your expenses; again an attorney question) it's highly unlikely you're going to get your money back (other than what's in the escrow account) anytime soon.

I'm truly sorry that you find yourself in this position and hope everything works out for the best.
1 vote
Annette Law…, Agent, Palm Harbor, FL
Sat Oct 19, 2013
Kenny,
Your question specficly states "legal recourse."
That must be responded to by an attorney.
Since time is running out, you need to have your agent refer you to an attorney.

Best of Success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
1 vote
carlos parra…, Other Pro, Monrovia, CA
Fri Oct 18, 2013
Check your contract! Are you working with an agent? If not that was your first mistake! If you are, then they can tell you.
1 vote
Mack McCoy, Agent, Seattle, WA
Fri Oct 18, 2013
Only an attorney can advise you of your legal rights, Kenny, but I'm wondering what your agent thinks of this?
0 votes
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