Legal Question in Real Estate Law in New York
Contract between buyer and seller
A homeowner decides to sell his property. The
buyer at that time has decided not to honour the
contract on the day of the closing. The seller's
attorney holds the down payment in escrow. The
house is now in a second contract but cannot
close because the previous buyer has put a lien
on the property. The seller had to pay the
previous buyer an amount in excess of the down
payment in order to close the sale. Can the seller
now take legal action against the previous buyer?
2 Answers from Attorneys
Re: Contract between buyer and seller
The terms of the contract will dictate what the seller can do. Often, in New York State real estate contracts, there is a provision for liquidated damages in the event that one party does not honor the contract. The contract is the document which will govern the parties rights in this situation.
Re: Contract between buyer and seller
This question makes no sense. If the original
buyer fails to close without legal justification
he has no basis for placing a lien against the
property and cannot demand payment of anything
If the original buyer fails to close because of
title defects, or the like, and makes legitimate
complaints, then there is no right to sell the
property to the second buyer and the homeowner
was in the wrong for doing so without obtaining
a cancellation of the first contract
So, what is missing is why the closing really did
not take place
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