Legal Question in Real Estate Law in New York
Breach of Contract
Fact: three persons entered into a contract of sale of a porperty. Buyer is only one person who sues sellers for breach of contract. Commitment was obtained past the 45 days allowed. The commitment was issued and included a fourth person's name. The application for mortgage also included the fourth person's name. No amendments were issued. The lending institution declared that lending the money does not condition the loan on the fourth person as a contract vendee. In this case, should the commitment not be changed to reflect only one borrower? Should I proceed to sign documents to close on this property with the way the commitment is worded (indicating two buyers) Can a Judge rule that the fourth person who was included as a borrower for the mortgage in no way affects any rights inuring to the defendants or is the contract of sale not valid and binding legally?
1 Answer from Attorneys
Re: Breach of Contract
If Seller will receive, at Closing, what the contract price & bargain demanded, theN all is well. And, the circumstances you described will not usually be considered a breach, sufficient to either cancel or require an Amendment to the Contract.
A Contract usually does not need to be amended to conform with a Buyer's Committment Letter, since the Contract expires (or ceases to exist) AT Closing and it does not control the form of title.
Once a Buyer takes title to property, the Buyer has the right to take title in whatever name or person, persons or entity they may choose, so long as the name or title used is not intended to deceive "the world."
If a Buyer Petitions the Court for Specific Performance, Buyer has a good chance of winning, unless the Contract provided for "Time of the Essence;" or when the Contract time to obtain the Mortgage Committment was exceeded, Seller provided Buyer written NOTICE of the Contract Termination AND, promptly returned the Contract deposit.
If the only claim Sellers make is that the Mortgage and Deed after Closing will include a person not named in the Contract, the Court's response is likely to be "so what's the beef?" Buyer's often have mortgage co signers or a guarantor, that Seller's do not know about until Closing. Often it is a family member, ie., mother, father, child, paramour and so forth.
Good luck,
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