Legal Question in Real Estate Law in Minnesota

Purchaser backs out after 6 weeks while closing on another house and denies his

We got a purchase agreement on our home for full price after one day on the market. 6 weeks later, after closing had been set and we offered on another house, he backs out. He owns his own mortgage company and denied himself credit to get out of the P/A. We found out that in the 6 weeks time he had our house off the market, he purchased, closed and put up for rent another house. He said he couldn't have more than 10 homes under his SSN. We signed the cancellation agreement and he offered his earnest $ of $1000 and free closing to our new buyers. It's been 3 months and we are taking the house off because of no interest. HELP. Do we have any recourse? He is well known around town as being unethical and sleezy and no one will work with him anymore.


Asked on 1/04/03, 8:41 pm

1 Answer from Attorneys
Shaun Jamison

Re: Purchaser backs out after 6 weeks while closing on another house and denies

I would recommend you read your cancelation agreement and purchase agreement. Most likely, you agreed to receive the $1000 and closing costs as either liquidated damages or full settlement. If that's true, it might be the end of your recourse. I highly recommend in the future that you consult a competant attorney prior to accepting a settlement.

One way you may have to get around the cancelation agreement is fraudulent inducement. In other words, he got you to agree to the settlement by giving you false information and you should be able to rescind. This requires a lot of proof, so you should be ready for a fight and the possibility you won't win. You also need to figure out what your damages are should you win to see if it's worth the cost. Should you wish to pursue the matter, do so promptly as statutes of limitations or limitation times pursuant to your purchase agreement may prevent your recovery if you delay (read your purchase agreement carefully to see if other provisions apply such as arbitration).

If he is a licensed broker, perhaps you should report him to the agency that issued his license.

Best of luck!

Disclaimer - as you know, nothing can replace a complete consultation with a competant attorney. By sending this email, I am not agreeing to represent you and the email is intended as general information rather than a specific legal opinion or advice.

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Answered on 1/04/03, 9:54 pm


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