Legal Question in Real Estate Law in Illinois
Was the delay in the closing due to attorney and/or realtor malpractice?
When I signed the contract regarding the sale of my condo last July, the closing date was scheduled to occur within 50 days (September 4th). A change in the date required signatures from all involved. The buyers were ready on time. Nonetheless, the closing didn�t occur until October 22�1 day shy of 7 weeks past the contract date. I was never told the closing wouldn�t occur as scheduled�let alone asked to initial a change in the contract. From late August through October, I was repeatedly told the closing would be �soon.�
The delay seems to be the direct result of the timing of requests for payoff information. Ironically, when I spoke with the lawyer shortly after I signed the contract, he mentioned that it would take about ten days to get payoff information from the mortgage company�s attorney�adding that he �would get right on that�. Instead, he waited until September. Relevant dates:
9/1 I sent the account numbers (mortgage, line of credit) and my social security number to the real estate lawyer, as requested.
9/4 Closing date as per the contract
9/21 The lawyer emailed letters authorizing access to account payoff information, which I signed and returned the next day.
10/2 I received an email from the lawyer asking me get some information regarding the line of credit account, which took until 10/7. This info revealed title-related issues with the account.
10/13 I received an email from the lawyer that included �I have the title issues resolved and we are ready to schedule a closing.� The preliminary payoff statement was attached.
Inexplicably, throughout August there was no indication of a problem in the realtor�s responses to my inquiries regarding the closing date, nor was there any discussion of changing the date in the contract. Therefore, I continued to assume the closing would occur on time�and I made work and budget-related decisions accordingly.
I disagree with the realtor and lawyer, who say the delay was due to problems with the mortgage and line of credit account. Specifically,
� The lawyer said that the delay was due to title-related issues with the line of credit account. However, just 2 weeks after the lawyer ran into problems getting information from the mortgage company, the issues were resolved. (see above dates)
� On 9/16, the realtor wrote �Your situation is actually quite complicated and we can't proceed with a closing until we can prove that the condo is still yours to sell.� I was notified later that day that the problem was resolved. This raises a couple of issues:
Prior to this email, there were no indications of any problems. Now, 1 � weeks past the closing date, I find out there is a potentially very serious issue. (I was in foreclosure and the condo could be sold at auction any time after 9/17/09. Wait much longer and it won�t be mine to sell.)
Given the rate of foreclosures, my situation wasn�t unusual, nor did it seem especially complicated. Property owners in foreclosure retain the right to sell the property, i.e., as long as the closing occurs before a scheduled auction, there shouldn�t be a problem. (Note: I�ve asked the mortgage company�s attorney why I needed to prove I had the right to sell the condo before releasing payoff information. I�m waiting for a response.)
If payoff information had been requested shortly after the contract was signed�as the lawyer planned to do at the time�neither of these issues would have delayed the closing past the date in the contract.
This was far more than an inconvenience for me. I work from home and I had terminated my internet service in anticipation of the move, so I was out of work during the delay. Further, by the time my office was up and running again, Thanksgiving was about a week away�the beginning of the holiday season when no one is takes on new projects. So, rather than being back at work in mid September, I was back at work in January�the 7 week delay, compounded by the holiday season.
Do I have any hope of recovering some of the costs from either the lawyer or realtor?
2 Answers from Attorneys
I do not mean to be antagonistic, but your question leads me to believe that you might share in some of the fault, if there was any at all. It can be very difficult to get payoffs when properties are in foreclosure. In your rather lengthy post, you did not even mention you were in foreclosure until more than 3/4 of the way into it. This is a highly relevant bit of information. Based on the fact that this was buried well into your post, it would not be surprising if you similarly did not disclose this information to your attorney or real estate agent in a timely manner. Without knowing this, there would be no reason to request a payoff more than a week or so before closing, since many closing agents will not accept "stale" payoff statements. It would appear the judgment in your foreclosure was entered some time prior to your scheduled closing date, which would further complicate an already complicated transaction. Without reviewing all of the relevant documents and correspondence, there is no way for an attorney to answer your ultimate question of whether your attorney or real estate agent is liable for your losses.
I agree with Mr. Moens. Additionally, you have a duty to mitigate your damages. Once it became apparent that you were not closing as expected you would be required to find an alternate means of internet connection in order to continue to run your business.
Further, malpractice suits are quite expensive to litigate as usually it is necessary to hire experts. Experts can run anywhere between $5000 and $20,000, so your damages would have to be quite significant to warrant filing a suit.
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