breech of contract? - Posted by Peter and Karen Vivenzio

Real Estate Investing Real Estate Law
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Posted by karen and Peter on March 27, 2003 at 15:41:40:

Just to keep everyone posted.
We are STILL in a holding pattern.
Our lawyer is putting a “les pendins” (spelling?)
on the Title, so they can’t sell it to anyone else.
So now it is a battle to see who is more stubborn :slight_smile:

Someone told me about putting air in the line, thanks
for that advice. There is a pipe definately frozen / broken in the basement; I suggested we break the seal there, and then put air the rest of the way. My husband said that is OK, but it does not check the line from the street to the house… with a sub zero winter, that could have froze and busted also.

(if they has properly winterized the house when all the tennants moved out last OCTOBER then none of this would have happened!)

so $350 for the housing inspection
and $200 for the “les pendins”
…I think we can be quite stubborn ha ha

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breech of contract? - Posted by Peter and Karen Vivenzio

Posted by Peter and Karen Vivenzio on March 01, 2003 at 14:23:03:

My husband and I own 18 rentals in Buffalo NY. So we are not completely “green” to this — however we are under
a contract for our first foreclosure.

It is a 4 unit that needs rehab – and is owned by a Finance Company. The contract which was signed 1/8/03 stated explicitly that all untilities will be turned on at the time of inspection. We have had our home inspector out there twice, neither time the water was turned on.

The home inspector pointed out the one of the pipes definatly froze and broke in the basement. The finance company is refusing to turn the water on, and said the
purchace price is “as-is”

The listing agent said that the lawyer for the finance company is going to void our contract and put it back on the market. …and when our relator told him he could not do that he said “so when did you graduate from law school?”

Our lawyer said we have a case, but said it would initally cost $2,000 to start a law suit. Incidently OUR lawyer can never get a hold of the finance company lawyer, only reaching a paralegal.

The units have beautiful hard wood floors - if there are breaks in other water pipes in the walls, we could have a real mess. We don’t even mind fixing the break in the basment, but we need the water pipes pressurized before
we can reach a final decision.

We know was AS-IS means, and they keep repeating it to us like we are retards. PAGE ONE of a SIGNED contract said all untilities will be ON at the time of inspection. They are the ones that are “dense” (in my opinion)

If you buy a car “AS-IS” don’t you want to turn the key and
see if the motor runs?

A friend sugested we file our own law suit against them.

Any advice would be appreciated.
Karendude1@aol.com

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Re: breech of contract? - Posted by Nate(DC)

Posted by Nate(DC) on March 01, 2003 at 14:35:42:

Here are some thoughts:

  1. How great of a deal is this? Is it worth the time, money, and aggravation? Or would your time be better used kicking this one out, and finding another one?
  1. If you decide that you do want to pursue…then go for it. Have your lawyer cloud their title by recording a memorandum of contract or such, so they cannot simply sell to someone else…

From this point on, if you are staying with this deal, you need to have your lawyer do things. Sounds like the other side is being a PITA so you need your lawyer to be one back to them.

  1. As to who is right, I could not say. I have not read the contract. Frequently, however, I will find that when buying from banks and lenders, they include their own addendum to the contract, which must be signed and made a part of the contract. The bank addendum generally has language in it that says it supersedes anything to the contrary in the contract. If you have such an addendum here, and the contract says all utilities to be on at inspection, but addendum says sold as is (which could include with utilities off), then you would NOT have a case and the seller is right.
  1. If there are other pipes broken, turning on the water would CAUSE the damage you hope to avoid. Seems like it might be a better course of action to keep water off, buy the place, fix the one in the basement, and then selectively open walls to check other pipes once the weather is nicer, BEFORE you make the decision to turn on the water??

NT

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Re: breech of contract? - Posted by Peter and Karen Vivenzio

Posted by Peter and Karen Vivenzio on March 01, 2003 at 16:42:32:

Thank you for your quick response.

I will definately call our lawyer on Monday, and
ask him to “cloud the title”

If is does come to law suit…
I take it you don’t advise we try to sue on our own,
best way is to go through an established real estate
lawyer? (we have worked with him before on other closings, he is very good)

Here are some of the stats
$41K price
$30K rehab estimate
(NOT including a plumbing rehab!)
with all 4 units rented, $850 -$900/mo positive
30% return on investment

4280 square feet
1070 each unit 2 bedrooms 1 bath
backyard has cement parking area for 6 cars.

It is not a great neigborhood, but not the worst,
near a college, and an artsy-fartsy trendy part of town.

Minus our time and effort, we are only out $350 to the home inspector. I “would” walk away from it…BUT… What gets my dander up is the way we
were treated by the finance company. Like we were the
“foreclosee” and not a buyer. (my husband and I both have masters degrees in administration) If you treat a buyer poorly, they tend to get…vindictive?

I think we can give ourselves time on the law suit route, if we go with this cloud the title (right?)

I would like to get a plumber in there to give us an estimate on the amount of plumbing damage – but husband said there is no use of getting in a plumber without the water on — caught in a catch 22.

I have the contract right in front of me, none of the addendums state that it supersedes the original.

This is the first time I have used this service of CRE, and it is very nice. I will keep all of you in cyberworld posted on our progress if you wish?

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Re: breech of contract? - Posted by Nate(DC)

Posted by Nate(DC) on March 03, 2003 at 13:46:11:

Yeah, hand it off to your lawyer, if you want to pursue at this point.

I disagree with the husband. The best way to detect the plumbing damage, without potentially causing MORE damage, is to keep the water off, and replace all the potentially bad pipes before turning it back on.

NT

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Re: breech of contract? - Posted by R. Dodge

Posted by R. Dodge on March 20, 2003 at 20:58:42:

We’re living in a house that had plumbing problems like this when we moved in: we pumped air into the lines after the obvious break and watched a gauge to see if the pressure held (like the gas company uses when their lines leak). If it holds… no leaks. If it doesn’t… problems.
-Becky