Legal Question in Real Estate Law in Illinois
I am hoping to get some advice on whether or not to take the sellers, who sold me my home, and the contractor that they hired to small claims court.
At closing, the sellers had agreed to have repairs done to the home in order for us to agree to purchase the home. We moved in prior to the repairs being completed and we were �promised� that the repairs would be made satisfactory. Our attorney at closing had failed to hold any money in an escrow account until the repairs were made satisfactory. At the time of closing I was unaware that money could be held in escrow and only learned about this months after we had closed.
It has now been 11 months since we moved into the home and the repairs still have not been completed. The contractor finally returned to complete the repairs and said that he is going to finish the job as cheaply as possible, which means installing a door that does not fit properly. The basement door and the entire frame around the door had to be replaced because it became rotted due to a leaking pipe above it. The original door was a Pella and had a wider threshold, which butted up to the floor tile in the room. However, the cost of this �proper� door is much higher than the contractor had anticipated, so he picked up a door from Menards that does not fit properly. The door the contractor is installing has a narrower threshold so it does not butt up to the tile floor in the room, resulting in a large gap. The contractor was attempting to rig it with another threshold that he cut in half to close the gap, making it look horrible and cheap on a $700,000 home.
The contractor underbid the entire job and to do the repairs properly would put him extremely over his budget for these repairs, so he is taking the cheap way out to complete the repairs and move on. The agreement is between the seller and the contactor, but the seller is washing their hands of it stating that they paid the contractor for the repairs that they contracted him to do. However, since the agreement is between the seller and the contractor, I believe that I have to pursue the sellers in court since I do not have a binding contract with the contractor. My agreement is with the sellers who were supposed to get the repairs done to my satisfaction. The other issue is that the sellers now live in North Carolina and I live in Illinois, so I am unsure if small claims court rulings cross state lines.
The sellers also agreed to repair the flashing around a skylight that had become torn off in a wind storm. However, the contractor is now stating that he will not repair it because it is not leaking. It�s not leaking currently because there�s duck tape holding it together!!
How does the court side on items as I have described above? If I want repairs done properly and not done half-ass, am I required to pay the additional cost of the repairs? Or would the court agree with me in that they should meet my expectations in completing the repairs with the proper equipment so it�s in the condition that I �expected� it to be in once completed?
Also, do I have any recourse against my attorney since she failed to hold money in an escrow account until these repairs were completed entirely? If I had known at closing that this was an available option, then I certainly would have agreed to it or requested it. The seller�s real estate agent who I have contacted regarding this believes that the attorney should use their Errors & Omissions Insurance to pay for the repairs. However, my real estate agent claims that it is not considered an error that they failed to withhold money in an escrow account until the repairs were completed properly.
3 Answers from Attorneys
You may have a claim against your attorney for their failure to advise you about the possibility of escrow, especially since you are being materially damaged due to the lawyer's ineffective assistance. My advice is to ask a question in the Malpractice section of this site, and consult a lawyer who specializes in legal malpractice rather than your real estate agent who is most likely not licensed to practice law.
How a court sides on repairs is on a case by case basis. If you have a contract (in writing would be best) with the sellers stating they are supposed to pay for the repairs to these specific items, and not stating a specific price, then you have a better chance of succeeding. An alternative is for you to pay the additional cost of having the repairs done the way you want them, then suing the sellers for the additional money. It depends on how long you want to wait before you get the repairs done. Make sure if you do this, you keep all receipts.
Because the contract for sale concerns property in Illinois, and was agreed to and signed in Illinois, then Illinois law would control even if an Illinois court decides it doesn't have jurisdiction (which is doubtful). Even if you get judgment against the seller in Illinois, you may have to go to a South Carolina court to get the judgment enforced because that is where the sellers are currently residing, but it depends on a number of factors like how long SC requires a person to live there before SC law binds them.
As a supplement to what Carol stated, I suggest that you talk with your attorney who handled the closing and perhaps she or he will be willing to make up the difference between the contract price and what the actual cost will be. In all liklihood that is less than the deductible on the malpractice policy.
Also, you can sue the Sellers in Illinois and if their bank is a national bank with offices in Illinois, you may be able to attach the account.
In Illinois there is something called the doctrine of "merger", meaning that all contractual obligations of a seller that are intended to or are supposed to be performed before closing are "merged into" and "disappear into" the deed. However seller obligations that the contract contempates will not be performed until after closing do NOT merge into the deed. Therefore, based on the limited set of facts here, it appears you could sue the seller directly, and that would cause the seller to bring the contractor into the picture (as you say you have no privity, however you may have some rights as a third party beneficiary to the contract under a theory of an implied warranty of good workmanship but this is less clear from the facts). You will need to have an attorney review your purchase contract to see if it clearly on its face obligated the seller to have the work performed even if it was after closing, otherwise things may get a bit dicier. As to whether an escrow would have helped, apparently not based on the contractor's refusal to do the skylight work. As to malpractice, you have a couple of choices: go to a new attorney as to the contract matter and get his or her opinion based on all the relevant facts the attorney needs, or call your contract/closing attorney and suggest you may be making a claim but give him or her a chance to explain the situation before knee-jerking a threat...... Take it step by step....
The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is currently licensed to practice law only in the State of Illinois. Responses are based solely on Illinois law unless stated otherwise.
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