Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Hi all, I have an offer on a home that was accepted with a portion of the EMD non-refundable at acceptance. The property was misrepresented in the listing as it included bedrooms and bathrooms that were not permitted in the basement and did not show up in the city's records.
The seller delivered a set of incomplete/conflicting disclosures with quite a few disclosures missing. If the seller doesn't deliver a completed set of disclosures by the Seller Disclosure Deadline, is the seller in default and am I allowed to back out of the contract without forfeiting any of my EMD?
Thanks!
First of all, information provided in a listing is not guaranteed to be accurate. Neither is it a disclosure being made by the Seller. You also had the opportunity to request information from the Seller prior to making your offer.
From your own reasonable due diligence, you were able to determine that the bedrooms and bathrooms were not permitted. The Utah Supreme Court has ruled that property sellers must disclose known material defects that could not have been discovered by a reasonable inspection by an ordinary prudent buyer. (See Mitchell v. Christensen, 2001 UT 80, 31 P.3d 572.) Since you were able to determine that the bedrooms and bathrooms were not permitted, that does not appear to be a hidden defect, so it might matter little whether the Sellers officially disclose it.
I am not familiar with Utah real estate practices--and I have only done limited online research--but I could find no evidence of a "Seller Disclosure Deadline" or, more importantly, of any legal consequence concerning one. (Especially since the Seller Disclosure Form does not appear to be prescribed by law, as is the case in Michigan.) If you knowingly give an earnest money deposit, I would wager that you would have a difficult time getting any non-refundable portion back if you later decide to back out of the contract.
It's always advisable to have legal counsel, so consult a Utah real estate lawyer for a more definitive opinion. I think they will most likely tell you the same.
Quote:
Originally Posted by sloturbo
The disclosure has conflicting information - the seller currently occupies and the seller has never occupied are both checked. The zoning compliance is also left blank along with other more minor disclosures.
Appreciate the thoughts!
If both are checked that is obviously a mistake. Did you ask for clarification? Regardless of the answer, all known defects which would affect market value are supposed to be revealed.
Quote:
Originally Posted by sloturbo
I haven't deposited the earnest money yet as it's not yet due and this issue literally arose right after they signed the contract. I'm just curious as to whether anyone has encountered a similar situation.
Once you give them your money you will have little leverage to change anything that you feel needs to be changed about the contract.
Quote:
Originally Posted by sloturbo
Thanks, Diana. I meant in terms of what would happen to the EMD if I choose not to deliver based on the misrepresentation on the listing of what I thought I bid on or just on the failure to deliver complete disclosures by the deadline. Would the seller have the right to come after me for the EMD or is there just cause that I am in the clear?
Again, you can't rely on information presented in a listing. It is not always accurate. The contract you signed is not based on the listing--you made it based upon your inspection and evaluation of the property. I don't think that you are "in the clear". If you made your offer based upon incomplete information, I would say that's on you. If you now make an earnest money deposit, that's affirming your decision and it would be doubtful that you would have an easy time getting any of the EMD back if you subsequently back out of the contract. More background information would be helpful, particularly as to the timing of the Seller's disclosure in relation to the timing of your offer.
Status:
"Made the Retirement Run in under 12 parsecs!!!"
(set 4 days ago)
Location: Cary, NC
43,076 posts, read 76,631,641 times
Reputation: 45393
Jeeze, Jack. You ARE a professor!
OP, must be careful.
Local Rules Rule, and you may be in breach of contract for not providing EMD in a timely manner. What does your contract say about delivery of EMD?
If EMD delivery is not addressed, talk to a real estate attorney.
Again, with the caveat that Local Rules Rule, I might say:
Your issue regarding the listing is with the listing agent/firm, not the seller, not the MLS. We see massive misrepresentations on a routine basis where I am. Not a seller-buyer issue. Seller doesn't do the input.
Of course, if the seller is a licensee, listing and selling their own property, the intrigue increases.
The Disclosure error IS an issue between you and the seller, and only an issue with the agent if the agent completed any portion of it.
Did you check permit status with the City before or after writing the Offer?
Again, with the caveat that Local Rules Rule, I might say:
Your issue regarding the listing is with the listing agent/firm, not the seller, not the MLS. We see massive misrepresentations on a routine basis where I am. Not a seller-buyer issue. Seller doesn't do the input. Of course, if the seller is a licensee, listing and selling their own property, the intrigue increases.
Yes, that's probably the only scenario under which the listing could have relevance. If the Seller were licensed and wrote their own listing, with an intention to deceive, that would definitely increase the intrigue.
Thanks, Diana. I meant in terms of what would happen to the EMD if I choose not to deliver based on the misrepresentation on the listing of what I thought I bid on or just on the failure to deliver complete disclosures by the deadline. Would the seller have the right to come after me for the EMD or is there just cause that I am in the clear?
Just because you do not deliver the Earnest Money does not mean you do not have an enforceable contract.
I haven't deposited the earnest money yet as it's not yet due and this issue literally arose right after they signed the contract. I'm just curious as to whether anyone has encountered a similar situation.
YOU could be in Georgia for all we know. The country, not the state.
Ditto. Where's your agent in this? He/she should be the one advising you on their contract.
Any legal advice about the contract should be coming from the OP's lawyer, but there may be things that their agent, if they have one, can clarify for them. I'm sure there is more to this story.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.