These are troubled times, and people’s lives are being adversely affected by changes every day. What may have looked like a great place to live,or a great investment property, today does not look so good after you have lost your job or been stricken with a serious and unexpected health emergency. While the judicial system is designed to be even-handed, and objective, it is amazing to me how difficult it has been for my Sellers to enforce their rights when a Buyer defaults, for whatever reason(s).<\/p>\n
That being the case, I thought I would reinforce with each of you, as real estate professionals, some of the rules that I try to insist upon, when I am representing a Seller. Although adherence to these rules may not\u00a0guarantee a great result\u00a0in terms of specific performance, or at least retaining the Buyer’s deposit, in my opinion they provide you with the best chance of success in those endeavors.<\/p>\n
\u00a0\u00a0\u00a0\u00a0 1. Make “Time is Of the Essence”Your Consistent Mantra in terms of\u00a0Sale Documents.\u00a0If your Offer says the P & S must be signed by a certain date, make sure that you get a draft of that P & S to the Buyer,or the Buyer’s attorney, well in advance of that date. A P & S “heaved” at opposing counsel the day before the signing date does not do the trick. The McCarthy decision in Massachusetts, its progeny and decisions in other jurisdictions make it clear that this type of treatment of the other side effectively nullifies “Time is Of the Essence”.\u00a0 Once you have lost that advantage, you, as the Seller, are at a real risk. You then bring what is reasonable into the equation, and any judge, on any day, will give you a different decision on that issue.<\/p>\n
\u00a0\u00a0\u00a0\u00a0 2. If Deadlines are not going to be Met, obtain written extensions.\u00a0 There are valid reasons why deadlines for signing, and mortgage commitments, and closings can be delayed. Your job as a real estate professional is to keep track of the important dates, inquire in advance whether it is likely those dates can, or will, be met and then obtain signed extensions if they will not be met. There is no tougher road in a litigation to enforce Seller’s rights than one which shows “sloppy” adherence to the prescribed schedule of events. If it can be made obvious to the judge that the Seller was diligent in enforcing deadlines,or obtaining extensions when\u00a0meeting such deadlines\u00a0will not be possible, the chances of success are greatly enhanced.<\/p>\n
\u00a0\u00a0\u00a0\u00a0 3. Take all necessary Steps to Perform even if you are aware that the Buyer will not attend the closing or pay the balance of the Purchase Price. This may be a “hard sell” to the Seller, because it may seem to the Seller that you are throwing good money after bad. Most jurisdictions, however, do not take kindly to premature defaults, and there is much more difficulty in enforcing Seller rights if a representative of the Seller has not appeared at the relevant Registry of Deeds with a Deed, and other related closing documents, and then paged, perhaps as many as three times, the Buyer to inform the Buyer that the Seller is “ready, willing and able” to perform.<\/p>\n
There are times when enforcing Seller rights in a defaulting Buyer situation just does not make sense. I can tell you from experience that most litigations whcih I have been involved in are expensive and do not always prove beneficial from a “risk-reward” standpoint. On the other hand, if your Seller wants to have any chance at all of victory, adherence to the advice set forth above is essential.<\/p>\n","protected":false},"excerpt":{"rendered":"
These are troubled times, and people’s lives are being adversely affected by changes every day. What may have looked like a great place to live,or a great investment property, today does not look so good after you have lost your job or been stricken with a serious and unexpected health emergency. While the judicial system … Continue reading Defaulting Buyers—What you do, and when, can make a lot of Difference to the Outcome of the transaction<\/span>