I'm selling my co-op and the buyer was approved by the board. However, the co-op wants the buyer to put a year of maintenance in escrow. It's been a few weeks now (and over 6 weeks past the proposed date of closing) and the buyer won't agree to pay the year of maintenance, but also won't cancel the contract. At this point, I want to just cancel the sale because this is taking way too long and I... [more]
I'm selling my co-op and the buyer was approved by the board. However, the co-op wants the buyer to put a year of maintenance in escrow. It's been a few weeks now (and over 6 weeks past the proposed date of closing) and the buyer won't agree to pay the year of maintenance, but also won't cancel the contract. At this point, I want to just cancel the sale because this is taking way too long and I don't understand how long this can drag on. My lawyer is reluctant to cancel the sale, but I got a second opinion that says that according to clause 6.3 in the contract, if unconditional approval by the board has not been met, either side can cancel. I don't want to give a "time is of the essence" notice because then i have to wait ANOTHER 30 days of being in limbo. Does anyone have a definitive answer, or know of a similar situation I could reference? Thank you!
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Response by lad
about 11 years ago
Posts: 707
Member since: Apr 2009
My understanding is that a year of maintenance is not "unconditional approval." When I bought my apartment, I made sure that I had the right to cancel if the board put any restrictions around the approval. I am not sure, however, if the seller also had the same right. Your lawyer should be answering this question.
The buyer's behavior seems odd to me. The only two paths -- that I know of -- is to agree to the maintenance escrow or back out. What is he/she hoping for?
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Response by jelj13
about 11 years ago
Posts: 821
Member since: Sep 2011
Isn't there a clause in your contract about extensions past the date of closing in the contract? Mine indicated that the seller had to approve any extensions past 30 days. You're way over that now.
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Response by Flutistic
about 11 years ago
Posts: 516
Member since: Apr 2007
I wanted to cancel a co-op sale contract recently. I got a list of real estate litigation lawyers via SE, and went down the line calling them to get their reaction to my situation.
The bottom line is, the seller can't cancel a contract, especially not after the board has approved the buyers. Every atty I spoke with, and I got a couple of rather big ones on the phone, agreed with this.
I'm guessing, but perhaps the buyers are waiting for a board rejection so they don't have to give up any deposit in the form of damages to you. If so, if your atty offers to give them a 100% refund that might solve your problem.
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Response by Flutistic
about 11 years ago
Posts: 516
Member since: Apr 2007
BTW getting more opinions from *litigation* real estate attorneys, not transactional real estate attorneys, would probably help you a lot. I was offered a top-down review of my odd and complex situation by such an atty for $2500, another charged $500 an hour. Money that would have been well spent if things hadn't shifted enough to give us a better plan.
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Response by crescent22
about 11 years ago
Posts: 953
Member since: Apr 2008
You seem to hold the cards here- you've got buyer's deposit and a reasonable interpretation that consent has not been given within 30 business days post-a Scheduled Closing Date. If you really want to, send a notice of cancellation. What is the buyer going to do? Sue you when he already doesn't want to give 12 mo maintenance? Don't think so.
The real question is why do you want to cancel and spend another 3-6 months looking for a buyer when you could try and smooth it over with the Board first and why doesn't your first lawyer want to cancel?
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Response by Michael7
about 11 years ago
Posts: 16
Member since: Dec 2007
i am surprised the board hasn't reacted already and rejected the buyer. Maybe you should ask the board to do so. Buyer is either wanting out of purchase, does not have the funds for the year of maintenance, or is just simply a difficult antagonistic person... in either case i think the building would want to reject this buyer.
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Response by jelj13
about 11 years ago
Posts: 821
Member since: Sep 2011
I don't understand this. The Board gave their approval CONDITIONAL on your buyer putting up 1 year's maintenance. They refuse to do this, so from common logic I studied in school, there is no approval. Tell the Board the buyer refuses to give the maintenance and ask them to formally reject or accept this buyer.
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Response by Flutistic
about 11 years ago
Posts: 516
Member since: Apr 2007
The OP's lawyer is reluctant to cancel the sale, so jelj , I think that means the buyers were approved unconditionally, but the board wants the escrow, and they know the buyers have the money unless they lied on the application.
This is not far from the kind of thing that happened to us.
My prediction: buyers put the $ in escrow and the closing happens.
My understanding is that a year of maintenance is not "unconditional approval." When I bought my apartment, I made sure that I had the right to cancel if the board put any restrictions around the approval. I am not sure, however, if the seller also had the same right. Your lawyer should be answering this question.
The buyer's behavior seems odd to me. The only two paths -- that I know of -- is to agree to the maintenance escrow or back out. What is he/she hoping for?
Isn't there a clause in your contract about extensions past the date of closing in the contract? Mine indicated that the seller had to approve any extensions past 30 days. You're way over that now.
I wanted to cancel a co-op sale contract recently. I got a list of real estate litigation lawyers via SE, and went down the line calling them to get their reaction to my situation.
The bottom line is, the seller can't cancel a contract, especially not after the board has approved the buyers. Every atty I spoke with, and I got a couple of rather big ones on the phone, agreed with this.
I'm guessing, but perhaps the buyers are waiting for a board rejection so they don't have to give up any deposit in the form of damages to you. If so, if your atty offers to give them a 100% refund that might solve your problem.
BTW getting more opinions from *litigation* real estate attorneys, not transactional real estate attorneys, would probably help you a lot. I was offered a top-down review of my odd and complex situation by such an atty for $2500, another charged $500 an hour. Money that would have been well spent if things hadn't shifted enough to give us a better plan.
You seem to hold the cards here- you've got buyer's deposit and a reasonable interpretation that consent has not been given within 30 business days post-a Scheduled Closing Date. If you really want to, send a notice of cancellation. What is the buyer going to do? Sue you when he already doesn't want to give 12 mo maintenance? Don't think so.
The real question is why do you want to cancel and spend another 3-6 months looking for a buyer when you could try and smooth it over with the Board first and why doesn't your first lawyer want to cancel?
i am surprised the board hasn't reacted already and rejected the buyer. Maybe you should ask the board to do so. Buyer is either wanting out of purchase, does not have the funds for the year of maintenance, or is just simply a difficult antagonistic person... in either case i think the building would want to reject this buyer.
I don't understand this. The Board gave their approval CONDITIONAL on your buyer putting up 1 year's maintenance. They refuse to do this, so from common logic I studied in school, there is no approval. Tell the Board the buyer refuses to give the maintenance and ask them to formally reject or accept this buyer.
The OP's lawyer is reluctant to cancel the sale, so jelj , I think that means the buyers were approved unconditionally, but the board wants the escrow, and they know the buyers have the money unless they lied on the application.
This is not far from the kind of thing that happened to us.
My prediction: buyers put the $ in escrow and the closing happens.
Let us know, coco