Builders who cancel their contracts (clause, agreement, prices, construction)
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That is a new one on me, the "Unilateral Contract" allowing the builder to do this.
And, I have seen a lot of new construction contracts.
Makes me wonder if it was an escalation clause, or similar.
But, of course, if this is a contract provision and the buyer accepts it by signing it, she has exposed herself to the builder's mercies. "Legally," one can agree to many onerous provisions.
That is a new one on me, the "Unilateral Contract" allowing the builder to do this.
And, I have seen a lot of new construction contracts.
Makes me wonder if it was an escalation clause, or similar.
But, of course, if this is a contract provision and the buyer accepts it by signing it, she has exposed herself to the builder's mercies. "Legally," one can agree to many onerous provisions.
Yeah, when I signed for my place ,there were quite a few clauses that I didn't like but my realtor was like "yea, these are written to favor the builder and it's unamenable. There's a line of people waiting right after you." So I went with faith, lol. Worked out, but was I totally comfortable? IDK.
It leaves somewhat of a bad taste in my mouth. At the very least, the buyer should be allowed to pay more to reflect the increased price of goods during times like these (if that's not already the case). But, alas, this is what the seller and buyer both agreed to, so I can't make too much of a stink about matters.
It leaves somewhat of a bad taste in my mouth. At the very least, the buyer should be allowed to pay more to reflect the increased price of goods during times like these (if that's not already the case). But, alas, this is what the seller and buyer both agreed to, so I can't make too much of a stink about matters.
The story indicates that the buyer was not able to meet the higher price, so it was put on the market.
Still... Ethical people do "No Surprises Real Estate," to the greatest possible extent. This builder most assuredly knew the costs had ballooned, and should have been proactively communicating that point throughout, not a week before closing.
And, maybe the builder did exactly that. I have zero faith in news reporters to grasp and accurately report real estate transaction dynamics.
That's why I cannot imagine buying a house that's not yet built. What are people thinking? A more common scenario is the builder going belly-up during construction. If there isn't a performance bond, tough luck for the buyer.
That is a new one on me, the "Unilateral Contract" allowing the builder to do this.
And, I have seen a lot of new construction contracts.
Makes me wonder if it was an escalation clause, or similar.
But, of course, if this is a contract provision and the buyer accepts it by signing it, she has exposed herself to the builder's mercies. "Legally," one can agree to many onerous provisions.
Unfortunately it appears to be more common here in Texas as of late. Also many are not escalation clauses but instead "Bad Hair Day" clauses. In other words they hold the right to wake up in the morning and cancel for any reason they choose. I've had several clients already threatened by the Build Supervisor to do just that if they pressed to have major defects corrected.
What is really sad in this country are consumers can enter into a finance agreement to purchase an item and have a right of rescission required by law but the largest purchase of their life, a home, is not protected that way. Builders do not allow the contracts out of their building until signed so unless the buyer brings an Attorney with them they have little idea what they are stepping into!
My boss has a similar issue going on right now. He has contracted with a builder for over 18 months. The builders are always dragging their feet. Last month he got a call from the builders asking him to go to the house and check it out. He looked at it and called the guy back saying they went over and all looked good. The next day he suddenly got a message that the builders were canceling the contract and stated that he was lucky they he was lucky they werent pressing charges for trespassing.
This completely blew my bosses mind seeing as they were told to go over there. He and his wife got a lawyer and from the sounds of it the contractor was trying get him to cancel the deal so that, with the rising house prices, they could sell it for more then twice of what the contract price was.
As for the trespassing part. Evidently in the contract it states that they arent suppose to be on the building grounds without someone from the company there and the contractor was trying to use that to scare them. Unfortunately for the contractor his secretary had also sent my boss and his wife and email requesting it. So now, now only is that part not a threat they have that over his head.
The lawyers worked out that they couldnt just cancel it and since then the contractor has sent them a refund check several times trying to get them to back out. Not only has that no worked but my boss has now hired an inspector to be on site at all times to make sure that its done properly.
My boss has a similar issue going on right now. He has contracted with a builder for over 18 months. The builders are always dragging their feet. Last month he got a call from the builders asking him to go to the house and check it out. He looked at it and called the guy back saying they went over and all looked good. The next day he suddenly got a message that the builders were canceling the contract and stated that he was lucky they he was lucky they werent pressing charges for trespassing.
This completely blew my bosses mind seeing as they were told to go over there. He and his wife got a lawyer and from the sounds of it the contractor was trying get him to cancel the deal so that, with the rising house prices, they could sell it for more then twice of what the contract price was.
As for the trespassing part. Evidently in the contract it states that they arent suppose to be on the building grounds without someone from the company there and the contractor was trying to use that to scare them. Unfortunately for the contractor his secretary had also sent my boss and his wife and email requesting it. So now, now only is that part not a threat they have that over his head.
The lawyers worked out that they couldnt just cancel it and since then the contractor has sent them a refund check several times trying to get them to back out. Not only has that no worked but my boss has now hired an inspector to be on site at all times to make sure that its done properly.
Say what? This sounds so outlandish that I'm not sure it's real. Holy crap
Say what? This sounds so outlandish that I'm not sure it's real. Holy crap
It's not really hard to believe. Part of my protocol is before I set foot on any site I require the permission of the owner or their designated representative to be on that site. Here in Texas it can be considered criminal trespass to be on a site without the owners permission. As a result for me, because of other licenses I hold, it becomes a minimum Class C Felony charge. All it would take is the Builder to file charges and on top of whatever else happens I'll lose every one of those licenses.
Since these new contract "Bad Hair Day" clauses I've had one client who was threatened by a Builder to cancel the contract, cause him lots of issues, and get him fired from his job. Being here on an H1B Visa that can wind up being an automatic plane ticket back to his home country per the terms of his Visa. Whether or not the Builder would be successful was not going to be seen as the client was way to afraid to take that chance.
I don't believe in lots of government regulations but new home building is one area that needs serious review to protect the consumers!
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