Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Unfortunately, since you have most likely executed a contract for the purchase of the home, you may not be able to back out of the contract at this time without serious ramifications. Be mindful that this developer needs cash and has filed a chapter 11 bankruptcy case because of serious cash flow issues, so he is not likely to voluntarily agree to allow you to back out of the contract. Furthermore, if you want to litigate your ability to rescind or back out of the contract, you will have to do it in the Federal Bankruptcy Court where the chapter 11 case was filed.
Your best course of action would be to file a Notice of Appearance in the bankruptcy case and request that notices of all pleadings be sent to you either via email or regular US mail. Once this happens, you will be able to obtain copies of all the Motions and requests being made by the developer in the bankruptcy court and if you come across a motion that adversely affects your property or your interests, you will have the option to object to the document filed by the developer and at that time may want to hire a bankruptcy attorney to help ensure that your interests are protected.
Simply pulling out of Florida does not in and of itself mean that your warranty will be meaningless. Most likely the developer will file a document in the bankruptcy court that will deal with the treatment of his warranties and when this happens, you will have the opportunity to object to the document filed if your interests are not protected.
Also, once you file the Notice of Appearance there will generally be a website or link set up by the developers attorneys that will allow you to view any and all documents that were filed with the Court prior to your Notice of Appearance which will bring you up to speed on what has been taking place.
The chapter 11 is a good sign, because it shows that the developer wants to stay in business. The developer could have easily filed a chapter 7 bankrutpcy case, liquidated all of his assets and completely shut down his operation, but this did not occur. At this time you should just monitor the case and the documents filed in the case to ensure that your interests are protected.
I hope you find this information helpful.
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