Posted by Natalie-VA on January 06, 2007 at 08:54:04:
When I had a lis pendens filed, it was in conjunction with a lawsuit. No intention to mislead the poster.
–Natalie
seller backing out of signed contract - Posted by Adam
Posted by Adam on January 04, 2007 at 17:32:04:
I posted a couple of days ago that I have a seller that wants to back out of a signed contract. I was told to file an affidavit and memorandom of agreement concerning real estate. I went ahead and filed this. Was this the right thing to do. Will it put a cloud on the title forcing the seller to deal with me at some point. He is legally obligated to sell to me right? Thanks for any advice. I live in FL if that has anything to do with it.
Adam
Re: seller backing out of signed contract - Posted by vacationlover
Posted by vacationlover on January 07, 2007 at 21:19:02:
Hi Adam,
First off, congratulations for being far enough along in your investing career to ask this question.
Secondly, welcome to FL. This is a common problem here (at least in my experience and neck of the woods). Don’t know exactly where you are?.. But, anyway…
I’ve had this same experience many times now. I’ve used the affidavits with some success. But, the local scheister attorneys are beginning to challenge them.
Most times I’ve been successful with the affidavits, it’s been because I was collecting a penalty from an end buyer, in one form or another. The sellers often claim/feign ignorance (pure ignorance is often justifiable; not sure about ignorance of situation) or have not had the financial wherewithall for me to collect directly from them. The buyers who try to go around my affidavits are typically slick investors whose title companies have chosen (or been directed) to ignore the affidavits.
I have several lawsuits pending on these. But, the important information I’m trying to convey to you is that I’ve started using a more binding document to cement my position with signed contracts. It’s called a “Memorandum for Purchase and Sale…” and is signed by my seller and myself and notarized. It’s effect is that it is “bilateral” as opposed to the affidavits I had used in the past, which were “unilateral”.
The power of a seller’s notarized signature on this document pointing to the verbage of your contract is compelling. My attorney feels very comfortable litigating from this position.
Get a document like this in your toolbox. You’re going to need it in FL, especially with the declining market. Your sellers will be getting a lot of pixie dust sprinkled in their ears after they’ve signed your contracts.
Best wishes for your investing career,
vacationlover
contract - Posted by Nike
Posted by Nike on January 06, 2007 at 07:47:54:
Recording will cloud title. Any subsequent buyer will take subject to your claim. You will eventually have to sue to enforce the agreement or you’ll lose your right to sue (you can’t just wait indefinitely). Talk to your attorney. Good luck.
You really have to be careful what … - Posted by Gary-Oregon
Posted by Gary-Oregon on January 06, 2007 at 24:25:02:
you record that affects the title to another persons property. If not done properly, you invite a suit against you for slander of title. Take John’s advice coupled w/ your personal attorney comments. LOL
Re: seller backing out of signed contract - Posted by John Merchant
Posted by John Merchant on January 05, 2007 at 10:13:09:
First, NO, such a Memo or affidavit isn’t guaranteed to block any other sale of the property by the defaulting owner.
Title company officers routinely “bond around” such memos or affidavits and dare the first, jilted buyers to do anything about it. If I were you, I’d bet on this happening, so clearly your memo or affidavit isn’t enough.
Secondly, a lis pendens is absolutely NOT the right thing to file next, since it is designed to be filed only AFTER your lawsuit for Specific Performance of the REC/P&S Agreement has been filed.
Premature filing of the LP could itself be grounds for a lawsuit by the S against YOU.
You should now consult your lawyer and see if you have enough of a mutual contract to justify your filing suit against the S and force him to proceed with the sale to you.
If you do, odds are that his lawyer will tell him the same thing and S won’t want to litigate the issue and will proceed to deal with you and either try to buy you out or close as per the P&S Agreement.
Right after your lawsuit is filed THEN the LP can be recorded in deed records and solidly cloud the title.
Re: seller backing out of signed contract - Posted by Natalie-VA
Posted by Natalie-VA on January 05, 2007 at 09:19:04:
Adam,
Ask your local title company what they would do if they came across your document. Some have posted on this board saying that a one sided document like that will be ignored by title companies.
IB wrote to you below suggesting you actually file a lis pendens. This might cost you a few hundred dollars, but I think it’s a better bet.
–Natalie
Re: seller backing out of signed contract - Posted by Tommy
Posted by Tommy on January 05, 2007 at 07:01:24:
As far as i know it will cloud the title and yes he will have to have you release him if he wants title insurance.