Potential $100,000 Loss due to Typo Error - Posted by elaine
Posted by elaine on October 24, 2006 at 14:31:10:
I re-posted this message because I didn’t receive any comments the first go around. I really would appreciate any advice, pointers that the experts may suggest.
We lease optioned one of our properties to a couple for an agreed amount. We have done several lease options before. Due to a typo in the option, we put in an amount $100,000 (even) below the true purchase price, even though we provided the optionee a flyer showing the correct amount and believe they well understood the correct amount. Neither we or the optionee (seemed) to noticed it at the time.
It is now comming close to the time of the option exercise. The optionee has now verbally told us they wish to pick up the option at the erroneous amount. Where upon we checked the option and for the first time noticed the typo. We so advised the optionee verbally and by certified letter and explained that the $100,000 was an obvious error and reminded them of the correct amount agreed and advised the erroneous amount was even below the amount we paid for the property even without fix up and reestablished the correct amount. We also stated there was no way we could reasonably sell it for the erroneous amount.
Forl background, we had other possible optionees at the correct amount but chose this one. We also had cash offers at very near the correct amount. We have some records of this. We thought that solved the problem. However, we have now received a letter from a lawyer purporting to represent the optionee stating notification of intention to exercise the option at the erroneous amount and stating their expectation that we will conform and that they will take legal action for specific performance if we do not.
It also states that we will receive a lenders confirmation letter as required by the option, which we have not yet received. We have not signed any sales contract with the optionee/purchaser as require by the option. We think this lawyer letter may be a shot in the dark to get us to conform, or offer a deal, but obviously it could be quite serious. We are open to any suggestions. Especially any that would give us any advantage or possibility of logical conclusion. What ever happens we have no intention of loosing $100,000 on this deal. Any help or positive comments would be appreciated. I know my new name should be Dumb and Dumber, but please help me to make it Smart and Smarter.
We plan to seek legal advice if necessary, so that is not the advice we are looking for. If any one has had any similar problem or circumstance, we would certainly like to hear what you did and how it turned out. Also, anyone who hasn’t, but may have a good idea, we would appreciate it.
Some things that we believe we could use in our favor:
A.) We have collected some personal notations, and some flyers (in both English and Spanish), that show the correct, $264,900.00 that we had originally advertised.
B.) We have an insurance policy on the property showing the insured amount of the home (dwelling), which is way above the typo (incorrect) amount.
C.) We purchased the home for $185,000.00, which is 20k above the erroneous typo) amount. We could logically argue the point that “Why would we want to sell the home for 20k underneath what we bought it for?”
D.) We believe that we can get in contact with some of the previous buyers and lease option propects and have them attest to the fact that we were in fact asking $264,900.00
for the home.
E.) We had an original appraisal executed on the home prior to our purchase and repairs(required by the mortgage company), which conservatively valued the home for mortgage purposes at $205,000.00.
-One attorney has advised us to take a proactive approach and make the first move by filing a suit against the Optionees claiming that there was not a meeting of the minds at the erroneous price of $164,900.00, and therefore the that amount is not valid.
Once again, any suggestions would be greatly appreciated.
Thanks