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Question

we are building a house, the builder filed bankrupcy and is in reorganization, are they legally allowed to collect more money before we go to closing

Submitted: 369 days and 16 hours ago.
Category: Legal
Value: $15
Status: AWAITING CUSTOMER ACTION
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Optional Information

san antonio, Texas

Already Tried:
We are building a house, the builder went bankrupt and is undergoing reorganization, he continious to build houses,the house he showed us is not the house he is seem to be building (different layout etc), when we confronted him, he told us the model house is just a spec but later agreed to do it our way, we have put down 16,000. deposit.is he legally allowed to ask more money before closing or are we only suppose to pay the rest at closing? He said the deposit is going to a third party, if the builder goes into chapter 7, can we get our money back?

Posted by Law Pro 369 days and 16 hours ago.

Info Request

They have to abide by the purchase/sales agreement that you signed. As per that agreement - do you owe them more money prior to the closing?

369 days and 16 hours ago.

Reply

yes , per contract, they can ask per their discretion, but if they went into chapter 7, would we be able to get our money back, assuming there is a third party involve in safekeeping of the funds/

Accepted Answer

It they filed a chapter 7 - I wouldn't give them another dime until the closing. However, you stated they filed a reorganization - that's chapter 11 (chapter 7 is liquidation).

 

If there is any issue - I would go to the bankruptcy court and ask them what to do - I would give no one any monies without knowing I'm protected and going to get the property pursuant to the contract and not be paying for anything extra whatsoever.

 

If you don't have an attorney I would most certainly tell you to get one at this time under the circumstances. They should be able to review the paperwork and will advise you not to give anyone any monies for anything - to wait until the closing - even then (at closing) to make sure you get clear title to the property before you give them any monies.

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Expert: Law Pro
Pos. Feedback: 99.3 %
Accepts: 2340
Answered: 3/16/2009

Attorney

19 years legal practitioner: real estate, collections, estate, civil, business, and criminal law

369 days and 14 hours ago.

Reply

pls email me the name of the real estate lawyer near me, i would want to use one at closing.
thank you for insight. yes, they are in chapter 11 right now, i am worried they would file chapter 7 if they are not going to come out of brankruptcy.

Posted by Law Pro 369 days and 13 hours ago.

Answer

I would contact your local bank and ask who they use for their real estate transactions and then contact them. They would be more than adequate to handle the matter for you.

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