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William B. Esq.
William B. Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 3066
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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if one of two parties agrees to buyout the other and puts it

Resolved Question:

if one of two parties agrees to buyout the other and puts it in writing, "that he will make payments of $1,500.00 a month for 10 years plus a lump sum payment of $76,000.00". He also states "that if he fails to make payments then the other party can sell the house". After 4 years and 11 months buyer has stopped making payments to buyout the orther person. What is the legal action, that seller can take ?
Thank you and waiting for reply.....
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  William B. Esq. replied 1 year ago.

CalAttorney2 :

Dear Customer, thank you for using Just Answer. By the terms of the contract as you have posted them, the other party is entitled to sell the property after a single missed payment.

CalAttorney2 :

A Court may allow the delinquent party to make up the payment in equity (as opposed to "in law") such as in a "quantum meruit" judgment where the party is compensated for the money they have paid into the transaction at this very very late stage in the repayment plan, but from a strict legal interpretation, this is a strict penalty.

Customer:



please define this answer i got last night from Just Answer's CalAttorney2: a court may allow the delinquent party to make up the payment in equity (as opposed to 'in law') such as in a 'quantum meruit' judgment where the party is compensated for the money they have paid into the transaction at this very very late stage in the repayment plan, but from a strict legal interpretation, this is a strict penalty.


 


Optional Information:
Country relating to Question: United States
State (if USA): Hawaii




CalAttorney2 :

Dear Customer, my apologies for the confusion. There are two separate types of remedies.


One is a remedy at law, in the set of facts as you have posted it, the buyer has failed to meet the terms of the contract (by missing even a single payment), and therefore not only does the seller get to sell the property under the terms you identified, but the buyer also forfeits all of the money he paid into it. (This is why I referred to it as a strict penalty, there is no room for "leniency" in a legal remedy).


The second is an equitable one. In the same scenario, while the seller will argue the right to sell, plus the forfeiture, the buyer may argue that "in equity" he be allowed to either "cure the breach" (make up the payments with interest, so long as he does not harm the seller in doing so); or ask for repayment of some of the money he paid (otherwise he would forfeit everything).

CalAttorney2 :

It may help if you were to identify what you are trying to do. If you are the seller and you want to sell - you can simply do so, although it is usually wise to give notice, if for no other reason than to document it for the Court.


If you are the buyer and are looking to try to recoup some of your investment, you can try to ask for a way to "cure" the default by making up the missed payments, plus interest or penalties (I don't know what would be offered or accepted, these are just terms that usually go with a cure in these types of cases).

CalAttorney2 :

What you are doing if you are the seller is a foreclosure. You are a lender, and you need to follow the appropriate rules for a non-judicial foreclosure (you can also pursue a judicial foreclosure, but it is a little more complex, and usually not necessary - you may want to check with local counsel if you think your matter is more complicated). The State Courts have put together a concise publication on the rules for doing a non-judicial foreclosure in Hawaii, you can find that document here: http://www.courts.state.hi.us/self-help/foreclosure/foreclosure_conversion_faqs.html

Expert:  William B. Esq. replied 1 year ago.
Dear Customer,

There appears to have been some difficulties with the "chat" function (this sometimes happens with the forum, and I apologize for the inconvenience).

I have switched the question over to our "Q&A" forum, so you should be able to review my entire response to your question and your follow up. If you are not able to review the entire thing, please do let me know and I will address it directly.

If you have further questions, or if I did not address your entire question (or if I missed anything), please let me know and I will be happy to follow up.
William B. Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 3066
Experience: I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
William B. Esq. and 3 other Real Estate Law Specialists are ready to help you
Customer: replied 1 year ago.

just ask a lawyer,
a little more about this situation that i wrote you earlier: my father left his house (w/no mortgage, appraised value $660,00.00) to myself and my brother when he died 7 years ago. we put the Title to the house in my name only and i applied for an equity mortgage for $300,000.00 to take my money out of the property and my brother was going to make the loan payments. Bother has no established credit so we put the loan in my name to secure the equity loan. I own another home in Hawaii, approximate value $800,000.00, mortgage left $260,000.00. I'm a high school secretary, 30 years at present job, but not a large monthly income so the $1,500.00 my brother was paying monthly made a big difference. He backed out of the loan at the last minute and made me a side offer, $220,000.00, making monthly payments oa $1,500.00, a down payment of $40,000.00 (he increased that during the the first year and has currently made lump sums payments of $76,000.00). Additionally, he wrote into "the Agreement" that the house would come back to me upon his death ( he is a recovering addict, never married, no kids). he is 58 and in poor health, I'm 65 and in fairly good health. to date, he has made payments of $164,000.00 but he hasn't been working for 3 years now, is depressed and not able to work based on a medical malpractice lawsuit he is involved in which he thinks will pay him alot of money to settle. He has also had rentors in the home for 4-5 years now. Meanwhile, he has not paid me for a year and I am paying property taxes and insurance for the last 2 years ( at the time of our father's death, upon settlement of his Estate, we set aside $30,000.00 in an account for the payments of taxes and insurance and any maintenance/repairs to the home). I would like to sell the house now as I do not feel my brother can afford to buy me out; but he does not want to sell, thinking he only owes me $55,000.00.


Question: Can i sell the House, without his consent? Further more, what are my Options?


thank you< S.R.


 

Expert:  William B. Esq. replied 1 year ago.
Dear Customer,

It appears that the real property is already in your name (title rests in your name, the lien from the primary lender is in your name, and you are currently the one paying property taxes). From this perspective, there is nothing stopping you from selling the home.

The only question left is the enforcement of your agreement or contract with your brother. As an initial matter, I will assume that his property interests are not recorded, therefore any sale of the property would not be encumbered by this property interest, it would solely be a contract dispute between you and your brother.

If it is recorded, this makes the matter more complex. (You really will need to see an attorney to review the document and give you a legal opinion).

The interpretation regarding the contract I have provided above. If the loan terms provide that every payment must be made, then every payment must be made. If there have been substantial periods with missed payments, the brother is in breach and the other brother can take efforts to enforce the contract, including sale of the home. As this would be a non-secured loan, this is not a foreclosure and you do not need a trustee to do so.

I will caution you, please keep in mind, I cannot give you specific legal advice or instruction, and when dealing with substantial amounts of money or real property, I would advise at least consulting with local counsel to develop a plan after a review of your documents (particularly a non-traditional agreement regarding payment of a loan on real property).

While my rough interpretation is that you can simply sell the property and keep the proceeds, I would suggest checking with a local attorney (particularly if your brother has experience with the civil litigation system and is probably not afraid to complicate matters with a lawsuit). I understand that customers do not come to this forum to be told to go see a lawyer, but in some cases, that truly is the optimal expert information I can provide to protect you from pitfalls.
Customer: replied 1 year ago.

Really appreciate the time you took to reply to this, Bill. I was thinking that I would eventually have to get local counsel and your answer was a good confirmation to that.


aloha !

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