Legal Question in Real Estate Law in New York

Broker Misrepresentation

I brought a customer (who happens to be my girlfriend)to my broker. She has borderline credit (550), but my broker said she would have no problem getting her a loan. My girlfriend went through the entire process...offer and acceptance, $500 binder, $5000 downpayment, title search, and inspection. all that's left was the apprasial. Now the mortgage companies (2 so far) are saying they won't do the loan. Once because of the credit and the other for some unknown reason.

Q: Does she lose her downpayment?

Q: Is the broker liable for the downpayment and other fees she paid out due to:

* Intentional and/or negligent misrepresentation

* Detrimental reliance


Asked on 12/17/02, 2:04 pm

2 Answers from Attorneys
Lisa Breier Urban Breier Deutschmeister Urban & Fromme

Re: Broker Misrepresentation

If the contract had a financing contingency, she would be entitled to her contract deposit back provided that she complied with her obligations under the contract in trying to get a mortgage.

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Answered on 12/17/02, 2:51 pm
Walter LeVine Walter D. LeVine, Esq.

Re: Broker Misrepresentation

The purchase contract should have had a mortgage contingency clause - no mortgage, no deal. Assuming the time allowed for getting the mortgage and notifying the seller had not passed. If this is so, deposits should be returned. As to the improper representations by the broker, if you can prove them, you friend has a claim for damages for fraud and misrepresentation.

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Answered on 12/18/02, 12:40 am


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