Been Sued By Seller Over Deal

I'm Thinking about trying to settle the Case out of Court & Just Paying him off & Moving on After all hes the one who's going to have to answer to GOD if indeed its what I'm thinking it is ,Which is Hes the type that likes to Sue people for money & I'm also wondering Could it be why? the House hasn't sold yet ??? .

But I Fault myself for it Because I shouldn't had Went & tried to Redo this Deal , I should had Just Kept it Canceled & If he had File for A Law sue I Would have A Damn good Reason To Cancel So I do Fault myself for Not moving on & Just letting him Do what hes doing & Just Presented My case in Court that I was not Around to Close the Deal which would be on Vacation.

But I will Pay him the Money Owed I'm just Shocked as well as Wondering if This guy hasn't done this before .

Go to court and let your side be heard.

Hi Isnt life fun, whats next, let us know how this works out, Jim

I'm thinking about Hiring A Attorney & just talking to them About this Case cause Something isn't right about this Guy Jumping up the first time Trying to Sue & Our Deal never made it to Escrow.

Now Hes Back again trying to Sue For the Second time around .

You tell me about it , Just when you , think you're helping someone . I'll keep you all Updated & This was A Wholesale Deal ...lol

I'm now Doing Bird-Dog's Because I'm Scared to do Wholesale due to this .

Just for the heck of it counter Sue him, for bringing a %$##$ suit to court to start with, wasting your time and the courts time, etc. See how he likes them cookies, two to can this play this game.But make sure you answer the suit, dont let him win vai defalt for not showing up and having your day in court, and if you didn't do anything wrong don't settle out of court, make him prove it in court.....

doesn't require a lawyer. What exactly happened? Were you under contract and then passed your due diligence period? I would fight tooth and nail because if this isn't a legitimate suit, it would keep him from doing it to others. But, if you had a contract and went passed your due diligence AND signed away all your rights to get your deposit back, you may be best settling out of court. But, in CA, you have to sign away your rights in a separate document. Not sure if that's true where you are.

It doesn't matter if he has done this before. The case will be heard on the merits of the deal between you and the seller. What specifically is he suing you for?

It does Hurt me a lot Because its not Who I am Or the type of Business I run & I'm like I've yet to Understand Why? hes wanting to Sue .

Whats Bad is that If he Sues & wins He'll be getting Money from Both Me & From selling His Home , I'm like Hell Can I Sue him For Stress , & Damages & Have Him pay me A % of his Profits Off that house .

Its Sick But People don't Care they only see $$$ SIGN'S They could care less about You Or your Business as a Investor .

If you have built your power team, you should have a RE attorney on your team and he/she will be able to advise you how to proceed and how to avoid this in the future

Who has Money for A RE Attorney I don't & not Many of Us do .

Just to say One Monkey Don't Stop the Show I'm not letting this Get me down Because Its Just A Learning Lesson to not do this again but I will Continue Investing & all .

RE Attorney's are to high the one I talked to before wanted $1500 to start work which I don't have.

WoW this is insane!

Hi Candace,

I'm not an attorney, but I have learned a good amount about real estate law. I would need to see a copy of your contract to see if you are actually in violation of anything.

You say it didn't make it to escrow, but I'm not sure what that means exactly? Did you not put a deposit down on this contract? If you didn't put a deposit down then basically the contract should already be null and void. 99% of the time no purchase contract is legal without money put into escrow (earnest money) binding the deal.

Did you have an inspection period or some other out clause that you exercised to back out of the contract?

Did you make sure that your contract said the seller can only keep your deposit as full liquidated damages if you are unable to follow through with the contract?

Did you put a financing clause in the contract that you could use to back out?

What exactly is the Seller taking you to small claims court for.. Is he filing a lawsuit for performance?

I need more information on this to help better.

Either way don't let this get you down. Do NOT give up on wholesaling, but I do recommend you stop dealing with agents. I lost money in the beginning when I was dealing with agents and ignored some of Dean's advice, because I was so excited about getting a deal done. Then I learned to stop dealing with agents and only with private sellers and use my own contracts. That is when I started to have success in REI and wholeslaing.

Stay motivated and don't give up!

To Our Success,

Larry F
TheFlipKid.com

P.S. Happy New Years!

if you're posting this just to vent and share your frustration and experience with us, that is great; however, if you want to get some advice for your issue, you need to tell us more about the lawsuit-why exactly are you being sued, did you sign a purchase agreement, put down some earnest money? even if you did, you can still back out of a deal without any liability-that is why the contracts have clauses-for protection.

Good luck!

It would be time to et a LLC to help protect your future business, But I would really consider filing a counter suit agaisnt him, perhaps he'll back off if your suit has merit, its always a worth a try.

UPDATE :

I checked the Court Documents & seen were The Trial isn't until Feb 16th In CA , So That Gives me Enough time to Seek my own Attorney So I've Contacted A Law Firm in Beverly Hills,CA & told them my Story & Is awaiting for their Respond on taking my Case & seen If I can Fight it Or Settle it Out of Court But I want to Talk to A Lawyer Before Considering settling Cause there could be possible That I can Fight it , But I want to Speak with A Lawyer Before doing anything & Having My attorney do all the Talking & Stuff .

Good luck with the case, keep us imformed...John H.

Just fyi to Candace82 and anyone else that wants to prevent this in their future.

#1 you are a principle on the contract even state commissioned contracts are able to be altered by you and only you and the other principle so if an agent tells you it is illegal they are correct it is for THEM not for you.

#2 refer to above and do the following: strike out this line or make sure it isn't there if you can edit it out of your contract "enforce specific performance, seek such other relief as may be provided by law, or both, or" This one line in the default provisions is what allows a seller to sue you. It should only have "If Buyer fails to comply with this contract, Buyer will be in default, and Seller may terminate this contract and receive the earnest money as liquidated damages, thereby releasing both parties from this contract" as remedy in the default provisions limiting your liability.

#3 Put something in the special provisions to also limit your liability after the contract has been assigned. This is what I use "If the buyers assignee agrees to assume the obligations of the contract that the original buyer in the contract whose assigned the contract is now no longer liable on the contract." In Texas we have an option period built into our standard state commissioned contracts so I have no need to put any thing like contingent upon or anything of the sort I pay $0-10 for 5-15 days to back out for any reason during my option period that allows me to preform my due diligence and I don't have to provide them with the reason and most don't want to hear it as they then have to disclose it to future prospective buyers making it a win-win for everyone if I decide to back out and this option period can be extended if I require it for good reason like Candaces vacation time.

Good luck Candance. I'm sorry I couldn't have provided this for you sooner to prevent this but, maybe others will learn as you will from this.

Have you tried just talking to him face to face about all of this and get it straightened out that way ?? Find out why he feels he needs to file suit against you ? Try to satisfy him. For some reason, sounds like he feels he's been duked.

7. DEFAULTS: If buyer defaults under this contract, any and all monies deposited by buyer(s) shall be retained by seller as full liquidated damages. If seller defaults, buyer may pursue all remedies allowed by law and sellers default under contract.

Bring all your paper work, and don't pay a dime. Explain your entire side of the case. What exactly happened? What were you trying to do, an assignment? Did you have your escape clauses??

Jeremy

Your profile says you are in Virginia, so I will assume it is correct. If it's small claims court, in CA you can't have an attorney represent you. What exactly is he suing you for and how was the sum of $4,000 arrived at? If you feel you can win, fight it and counter sue him for the expenses it takes you to go to CA and appear in court. If your case is not winnable, there is no sense in incurring the expense to go to CA to appear in court and lose the case. If you don't show up in court, he will be granted a default judgment. If you are in Virginia and don't have a lot of assets, it's going to be a pain for him to collect. He most likely will end up hiring someone to collect the judgment and that will cost him about half the judgment. So the question is, does his law suit have actual merit, or is it a nuisance law suit where he hopes you won't show up in court in CA and he will win a default judgment? Normally, small claims suits have to be filed in the county in which the defendant lives. However, there are some exceptions, one of which is when a contract is involved. Ask your attorney if he has the right to file in CA. You may be able to get it dismissed on the basis of the contract being originated in Virginia, and if he wants to sue you, he may have to file in your county. DISCLAIMER - The above is not meant to be legal advice. Seek competent legal counsel for your situation.

Don't settle out of court if you are not sure what went wrong, there are quite a few people on this site who is willing to look at your contract, fear is crippling, but stand up for your rights, go to court at least you'll know where & what went wrong if anything.

yep just draw a line right through this second sentence. If it said if buyer defaults seller may as standard state commission contracts with say something like that for each principle. Or don't provide the sentence as a remedy at all if it is your contract. You are legally allowed to do this as a principle on the contract and if they initial and sign the contract they are stating they are okay with not having that remedy. I don't even allow it on any of my contracts as it limits my liability.

You are absolutely correct on what to put as a remedy for a buyer default. Post 22. That way the only remedy is the earnest money check. They seller can't sue for any other damages other than keeping the earnest money. That is what earnest money is. No one in there right mind (certainly no bank) would consider accepting a contract when there is no protection against the buyer defaulting. You could put whatever you like in your contract, doesn't mean it will be accepted!

Mentoring/Team Building Nationwide
Michael Mangham
MD Home Acquisitions LLC

takes you to small claims court and you are not in CA, then I don't believe a lawyer is allowed to take the case as Tom mentioned. You can have someone represent you, but if you don't show up, they will win by default. This sounds like a sue happy person counting on you not being able to show up.

But, even the CA state contract has many, many provisions that protect you. Unless you SIGNED OFF all your contingencies (usually a separate document), he has no standing, and you should respond that you will countersue for your stress, time, and travel IF you didn't sign away all your contingencies. If it never even got to escrow, then, like Larry said, if you did NOT put your deposit into escrow, you never had a contract; EVEN if all parties sign. You have 3 days to get your deposit in; if you do not put in your deposit, the contract was never valid... that is how it works here in CA...

I don't think this was ever answered - what exactly are you being sued for?

- Tom

The posts about the Default clauses were very informative and helpful. I will certainly check out my contracts to make sure they are there.

I'm with Tom - I am still not sure why you are being sued??? This would help us newbie's learn.

Lori

I'm sorry, but from what I am reading the underlying problem is a lack of education. If you are going to be a true investor going without an attorney is not a choice, it is crucial for a number of reasons.