Legal Question in Real Estate Law in New Jersey
return of escrow
While selling our previous home, we were sued by the homeowner assoc the day before closing. We settled only to sell - the condition of the roads caused us to lose 5 potential buyers. The assoc fixed the street in front of our home, which was due to the pre-existing condition of the street prior to OUR purchasing the home. The assoc notified us 5 months after construction began that we were liable due to our driveway construction; our attorney responded that we were not and the assoc agreed not to pursue the matter. Fast forward one year - we were sued on the day of our closing. We settled only to sell our home.
The closing attorney has held our money in escrow for 5 months; the assoc and their attorney have/will not sign the release and their attorney now says he cannot find the original copy of our signed release. Our former attorney appeared to be in over her head and unable to resolve this matter.
Is there a deadline that the assoc must accept the settlement by or they forfeit the claim? Must we sue to get the money back? We would like to see the end of this saga, but not by caving-in for something that was not our doing.
Thank you -
2 Answers from Attorneys
Re: return of escrow
You need a lawyer. Please contact me, see below, or at 973-605-8995, to discuss retaining me.
It sounds like what you are saying is that basically the HOA had a frivolous case against you. But then, when they found out you had a closing coming up on sale of your home, they filed a lis pendens or similar lawsuit, forcing you to agree to settle with them in order to go through with your sale.
I would obviously need an opportunity to review all the relevant documents, but if this is what happened, you may have a claim for tortious interference with a business relationship, or perhaps slander against title, against the responsible parties. If they did not proceed against you in good faith, and only filed the lawsuit to take unfair advantage/threaten your transaction, any agreement you signed may be void, voidable, or unenforceable, and you may be able to get your money back.
Since it's in escrow however, in order for the funds to be released, in the absence of a settlement agreement that everyone agrees is binding, someone will need to go to court, and get a decision from a judge.
I don't know how much you're talking about, but a lawyer will probably cost you at least a few thousand dollars in attorney's fees if any sort of involved litigation is necessary. If you can prove bad faith on the part your opponents, you might have a chance of recovering at least some of your attorney's fees.
Re: return of escrow
I agree with Alan that potential litigation is necessary to resolve this matter, and that you are at risk for the costs of the suit. The association documents need to be reviewed to determine if they had a legitimate claim, and the procedures to question it. You should be aware that while the condition may have pre-existed your purchase, if it was not resolved between you and your seller, you become responsible for any assessments after you acquired title. The delay in notification may or may not be relevant, if the association by-laws allow for the assessment to be made. Thus, the claim made against you may be valid. I suggest trying to negotiate a settlement of the claim.
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