Buyer and seller of residential real estate in Miami-Dade for cash agreed that "buyer will pay $1000 to Jon Doe at closing, in certified funds or cash, off the HUD". Seller owes money to John Doe (real name is different), that is why seller incerted that close in contract. There are no liens or judgments from John Doe against seller, that is why seller opted not to have the transaction in the HUD, so short selling bank would not prohibit it from happening. Contract is now expired due to buyer's fault. Seller still wants to close, because transferring deal to another back up buyer will complicate and delay things.If buyer and seller close, but buyer does not pay John Doe as agreed, can seller or John Doe sue buyer for the $1000? Will the suing party have a feasible chance of winning?
State/Country relating to question: Florida
Good afternoon,I'm sorry to hear of the situation.Seller is very unlikely to get the $1,000. First of all is constituted mortgage fraud to have off the HUD payments between buyer and seller. Secondly, the conspiracy to commit fraud could end up with both buyer and seller in legal hot water.Additionally, as this involves a short sale, the failure to disclose to the lender constituted fraud as well.The court will not enforce a contract that has at it's roots a crime. I would not expect the court to enforce the agreement. I'm sorry---I just see no way out of this dilemma, unless the buyer were to change his mind---but even then, the buyer and seller would be committing a crime for which they could each be jailed or imprisoned.I wish you the best in 2012.I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.You may reply back to me using the Reply to Expert link if you have additional questions; and if you do, I ask that you please keep in mind that I do not know what you may already know or with what you need help, unless you tell me. Kindly take a moment to rate my service to you based on the understanding of the law I provided. I have no control over the how the law impacts your particular situation, and I trust that you can understand how it would be unfair for me to be punished by a (negative rating) ----the first 2 stars/faces----for having been honest with you about the law.Thank you,Doug
John Doe did not commit any crime in this case, I understand. If so, can he, as a third party beneficiary, sue buyer?
Good afternoon,John Doe has no part in the case, and has no criminal liability---that is true. But John Doe is not a third party benneficiary either---He is a simple creditor.The contract for the sale of the house was not for John's benefit. John has no cause of action against the defaulting buyer.You may reply back to me again, using the Reply to Expert link, if you have additional questions.Would you please rate me highly now, based on my assistance to you in understanding the law.I wish you the best in 2012,Doug
Another legal opinion told me that there is a theory where a third party benefiting from a contract to which he was not a part to, can sue the defaulting entity to that contract. Can you please double check that theory and comment?
The real problem is that, despite the fact that John Doe was named in the contract and could have potentially been a third party beneficiary---the contract will be Void Ab Initio, because of the illegal purpose of defrauding the lender and the mortgage company. Third party beneficiary theory would not apply in this situation. You can not revive a void contract by a claim that a third party would have benefited from the following through of the contract terms by the parties to the contract.Would you please rate me highly now, based on my assistance to you in understanding the law.I wish you the best in 2012,DougKindly take a moment to rate my service to you based on the understanding of the law I provided. with you about the law.I wish you the best in 2012,DougLawTalk41095.9217277431
I've more than 27 years legal experience. Additionally, in CA I held a Real Estate Broker's license.
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