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Irwin Law
Irwin Law, Lawyer
Category: Real Estate Law
Satisfied Customers: 7416
Experience:  Lawyer- Broker 30+years - foreclosure, short sale, liens, title attorney.
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Hello, I am in contract to purchase a home in Long Island NY.

Customer Question

Hello, I am in contract to purchase a home in Long Island NY. I went into contract to purchase a one family house with a 2 car attached garage. We found out that the home cannot be sold with a 2 car garage because it is not considered legal by the Dept of Buildings. They now have to convert the garage into living space in order for the space to be legal. We are now past the scheduled closing date of May 15, 2013 and nothing has been done on the property. Since the seller breached the contract of not being able to provide us with a two car garage as stated, what are the legal ramafications of this ? what does the seller have to lose? What advantage does the buyer have in this case? for example if the buyer breaches the contract they stand to lose their downpayment.
Submitted: 4 years ago.
Category: Real Estate Law
Expert:  Irwin Law replied 4 years ago.

Hello. I'm, sorry to hear that you are having such problems buying a home. If the seller cannot deliver the home that you contracted to purchase, then they have breached the contract. You have the right to rescind any agreement thus far and receive a refund of your down payment and payments made up until now. You haven't breached the contract, so you have no risk of loss. I want to point out that these things do not happen automatically and you might need an attorney to pursue your legal remedies.

I hope this information is helpful and that you will enter a positive rating. I thank you for submitting your question to Pearl-Just Answer. We appreciate your business. If you need clarification or additional information, please send me a Reply and I will be happy to explain further. Please consult a local attorney to verify the accuracy of this information according to your state's laws.

Irwin Law and 4 other Real Estate Law Specialists are ready to help you
Customer: replied 4 years ago.

We were in agreement for 15K reduction in purchase price and buyer takes care of the legalization process, however the seller attorney wants to include in the contract that the garage is illegal which will prevent the buyer from qualifing for an FHA loan. Can we sue the seller for breach of contract for not being able to deliver the house with 2 car garage as stated in contract? How is that the the buyer can loose their downpayment in a breach of contract but the seller doesnt have anything to loose? Seems so one sided.

Expert:  Irwin Law replied 4 years ago.

You could have cancelled, but you agreed to take the home "as is" for a price reduction. If you didn't specify that the home still had to qualify for HUD financing, you didn't leave yourself an "out". If that reduction agreement is in writing, you're stuck. with it. A good lawyer prior to signing docs in real estate is always a good idea.

Customer: replied 4 years ago.

I do have a lawyer I just want a second opinion. I did not sign any agreement or changes to the contract. The contact is still original. All agreement was verbal. However, the seller's attorney doesn't want to reduce the price of the home by 15K via a Rider to the contract, he want to change the entire contract to include that the garage is illegal and will be taken care by buyer for legalization. But this prevents me from getting the FHA loan.

Expert:  Irwin Law replied 4 years ago.

Then in that case, call the deal off, because you if you don't get a mortgage loan and you don't have a financing contingency, you stand the risk of losing your earnest money deposit. There must be other homes for sale on Long Island that have legal garages.


Customer: replied 4 years ago.
So your saying that there is nothing I can do legally against the seller for failing to abide by the contract ? Basically Ur saying my only recourse is to walk away which would be to the seller's advantage? This is the perfect home for me. No other homes right now on Long island in this price range thats worth it.
Expert:  Irwin Law replied 4 years ago.

The reason that the home is in your price range is that it has a huge defect that's going to cost a lot of money to fix. The contract doesn't say that the seller warrants the condition against all defects and he agrees he will fix the home up for you. So if the roof turns out to be bad, the plumbing leaky and the electric service is defective, the seller doesn't have to fix it for you. He can say buy it the way it is, or here's your earnest money back. That's the way real estate deals work. You did the right thing by refusing to buy the home and waiving the garage problem.