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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 111527
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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We were about to buy a lot in a nice community which we have

Customer Question

Hello,
we were about to buy a lot in a nice community which we have been visiting several times over the year. Now a lot which was reserved came back and we reserved it and paid the reserving fees within 24 hours. It took then more than a month to get a draft of the contract and papers and we figured out at that time, that the increase of land was only 5% while the taxes jumped 300% for this year in compare to next year. After asking several times, it came out, that we have to pay something called "service dept" for a preserve which is the double of the amount of the annual taxes (taxes 2000 for the lot, 4000 annual dept =6000$ per year. This service dept is to be paid the next 21 years and can be changed in prices any time. We were shocked to get to know this so late because the sales team - when we asked them clearly about ALL relating costs/fees - which occur with a purchase of this land, were never mentioned to us. When we complaint, that this was never mentioned before somebody higher ranked jumped into the talks and wrote us in an very unprofesional way, if we did not like the way the sales team talked to us, further negotiations should be stopped at this point, we should go somewhere else and buy somewhere else. The question is, it is in the middle of the process, the reservation was signed and the 10 000$ downpayment paid. Now the signed contract was due at the weekend but we negotiated still something and asked for more time. We booked tickets already, hotel, car to fly over to the usa to finish this deal (20 hour flight), 10 000$ is paid. From the legal point of view - is it possible from the other party to terminate this deal one-sided without our consents? Sure, we don't wana be humiliated like this, i was just wondering if such is possible. For sure it is not really professional. Thanks
Submitted: 1 year ago.
Category: Real Estate Law
Customer: replied 1 year ago.
I just wanted to be a bit more clear. We were told, that the lot came back on Sept 17th 2015 by someone who works for a builder in this community and a free lancer realtor. We made it clear, we would buy thru her, but with no obligation to build with her builder (there are 8 builders to choose). We decided in 10 min and signed the reservation papers and transfered the 10 000 $ deposit. It took her 4 weeks for the draft of the contract. After asking several times, she told us after 4 weeks that we have to build thru her builder, which we refused. First we got to know about this lot first, second she agreed in writting, that there is no committment to a builder at this point. Therefore we went to the builder/investor of this community to the sales team which me met already several times, last time this May. We asked clearly in details about the costs/fees in regards/related to buy a lot and build later on. All figures were mentioned, but never, that there is a perserve land and there a bond as a loan which owners pay back for the next 21 years. In our case the land was appraised for 170 000$, they ask for 285 000$ and we need to pay 80 000$ in the next 21 years in total to pay off these bonds, which is kind of scary for me. Therefore the lot is technically not 285 000 but 360 000$ (not at a water) which is a lot of money. What we did not like, once we asked in the columne about the taxes how come the amount was this year 2200$ and next year its 6400$ there was for 2 weeks no clear answer. Then the sales Vice-President came in the picture and answered us in a professional way, that this ad-valorem and non-ad valorem payments and once we purchase the lot we have to pay for this "service dept" which is at the moment 3800$ a year. We were shocked, to get to know about such a high number (80 000$ in total) at such a late stage and asked for a dicount of the lot, which the sales director refused. It was ok for us, we wanted to decide to go for it. We booked tickets, flights etc to the USA and 2 days ago we got a an email from an CFO of the community to tell us, that the Vice President sales "over night" does not work for them anymore, that he is now in the picture and asked whats going on, without apologizing for the inconvenience in changing the person we used to deal with changes again and without answering questions about commitments the other guy did already. His email had no adress/signature nor phone number to be validated and to be contacted at. My husband wrote yesterday a very nice email back, saying that we found the sales team mispresenting us with wrong information and that we are not that happy to get to know about this 80 000$ at this late stage and that we still think about it. He wrote back, he terminates now negotiations and wishes good luck to find something else. Can he terminate this by himself without our consent? The deadline for the contract was end of October, but we were in negotiations about this discount with the Vice President sales and we asked him for more time. We got the money ready, had a babysitter traveled 10 hours to come here to be with our children. We have booked flights, hotels everything. Since that we spent 100 hours in looking for floorplans, etc. and now he told us basically, i dont like your criticizm get lost? And nothing about our 10.000 was mentioned. Is this normal?
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

The only way they can cancel the contract with you without your signature would be if you are breaching the contract (not doing something the contract says you must do). So, as long as you are abiding by the terms of the contract and you are paying what your contract states you must pay and what the bylaws of this Association say you must pay, then your contract cannot be cancelled.

However, you need to read that contract, not just what they told you, to see what they can and cannot charge you for, because what is written in the contract is what is binding and not their oral statements.

If they are claiming that you failed to honor the contract, then they can terminate the contract with you if they choose to do so I am afraid, it is called breach of contract. IF you did not breach the written contract, then you have grounds to sue them for illegally terminating your contract and you would have to take them to court to seek to recover your money if they refuse to return it.

I must give you also an opinion that we tell many people about these associations. If you are having issues with an association from the beginning, do not think it will get better over time, it will not, it will get worse. Associations with bullies on the board never get better and moving into them is a bad idea. If you have a chance out of the deal and to get your money from them do so and buy in a place where you do not have to deal with such people in an association. Under FL law, these associations are powerful and can cause you a ton of problems and headaches legally, so if this one is starting now like that, if you can get your money from them based on their breaching the contract, consider doing so and getting away from them.

Customer: replied 1 year ago.
I think you misunderstood my question. We did NOT sign the purchase agreement, we signed ONLY the reservation papers. We signed the papers to reserve the lot on Sept 17th and send 10 000$ to reserve it. It was thru a realtor, therefore Lakewood Ranch LLP send us the reservation form again and we signed it on Oct 12th. Within 2 weeks from that date (Oct 12) we were supposed to send 10% of the lot price together with the purchase agreement.But we were still in negotations,cause a number 0f 80 000$ (for preserve land in the compound) on top came up we never heard of before. We found the lot then too pricey and asked for a discount. By last Wednesday the President of Sales told us, that there is no discount and we should make up our mind. We told him, we will do by this week. Over night, he was fired and last Friday we received an email from the CFO of Lakewood Ranch, that the President of sales is gone and the status on our lot. We told him, that we felt mispresented by his sales team, cause they never mentioned when asking about all fees/costs in relation to this purchase, that we have to pay for this service dept (Stewardship) where the owner bought bonds from the County and every owner has to pay 4000$/year for the next 21 years on this preserve in the compound. He answered us Monday, if you felt mispresented i terminate negotiations now, buy your lot somewhere else - good luck. Its a difference if our lot cots 285000$ (no water view - not at the water) or with these bonds 360 000$. Sure, we were dispappointed.
The point is now. We were supposed to send within 2 weeks after signing the reservation form the 28 000$ and the purchase papers, which would be Oct 28th. But we were at that time still in negotiations (about discount) and in asking questions about the contract with the president of sales - 1) in reality we missed the 2 weeks deadline because we were still in negotiations, is this a reason to end it from one-side and terminate it?
2) we told the President of Sales we would answer him this week and if we go for it, we fly over Nov. 7th to sign the purchase agreement and pay it. But this guy was fired. Does the CFO still needs to honour all of this committments from the previous guy?
3) Can the CFO terminate from one side the contract, even if they still have the 10 000$ and tell us we missed the Oct.28th deadline to sign the purchase agreement and pay the additional 10% of the lot?
I summarize it in short: Deadline for signing purchase agreement and paying 10% of lot would have been Oct 28th. but we were still in negotiations.
Last wednesday the president of sales told us, there is no discount and we have to make up our mind
last Friday CFO told us President of sales is gone and asked about an update
Last Monday we told him were unhappy of not mentioning the additional 80 000$, he wrote us back on Monday that he doesnt like our criticzm and we should purchase somewhere else.Does he have legal grounds for this? They have our 10 000$ to reserve the lot now since 2 months, can he terminate from one-side because we missed the Octo 28th deadline by a few days because we were in negotiations? Can he in general terminate by himself? This was my question.I am German, so probbably my English was not great, sorry for that! I would appreciate your help! Regards
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply and clarification.
1) Misrepresentation is a ground to terminate the contract. Being in negotiations still over the contract is considered bad faith negotiation if they terminate while they are still actively negotiating with you.
2) They do not need to honor a verbal agreement I am afraid. The only agreement that they have to honor is what is in writing in the documents signed by you and the subdivision.
3) I am afraid that if you missed the contract deadline and they refuse to grant you an extension, that is up to them even if you are negotiating. It could be considered negotiation in bad faith, but once that deadline passed they have the legal right to cancel the deal and stop negotiating which it sounds like they have now done and that is not illegal.
Again, at this point, your concern is getting your $10,000 back and you should not be wanting to continue to buy the lot (at least I wouldn't want to live where they acted like this).

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