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Andrea, Esq.
Andrea, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 12554
Experience:  I have practiced law for 25 yrs. with an emphasis on real estate, business law, criminal defense and family law.
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I got on contract to build a house in Nov 2012 and was pre-approved

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I got on contract to build a house in Nov 2012 and was pre-approved for a loan. My home was supposed to built by July/August 2013 at the latest. In June 2013 the builder informed me that the plan they sold me was too big for the plot of the land and they were going to refund me my monies paid and cut me off the contract. I chose the plan the builder chose the lot and told me that was the plot for the plan.

Can the builder do this? What are my legal options?

Hi, and Welcome, My name is XXXXX XXXXX my goal is to provided you with Excellent Service, but need a bit more information, if you do not mind,

 

1. What is the municipality's minimum lot size for residences in that area ?

2. What are the dimensions of the lot ton which the builder was going to

construct your house ?

Customer: replied 4 years ago.


Hello! Thank you for your attention to this.


 


I don't know the exact answers for 1. and 2. However the builder informed me that the house plan was 2.5 ft too deep for the perimeter lot. The builder gave me the plan and the lot.

Thank you for your reply,

 

You and the builder have a contract. However, if the municipality has a minimum lot size for residential construction and you and the builder cannot amicably resolve the problem that has arisen, here is how the situation will play out,

 

If you file a lawsuit against the builder for breach of contract, the builder will defend on the principle of "Impossibility of performance" and that he should not be held to the contract because doing so would either violate the municipality's minimum lot size requirements, or the house plan is too large for this particular lot.

 

You could refute the builder's argument by alleging that as a builder he is required to know each municipality's minimum lot sizes in the municipalities in which he builds homes. You are the innocent party because you gave the builder the plan you chose and the builder chose the lot. Therefore, he had the obligation to check the lot requirements before giving you the lot and agreeing to build upon it,

 

__________________________________________________________________

 

 

Please be kind enough to rate Excellent Service" so that I receive credit for assisting you,

 

Bonus and Positive Feedback on survey is very much appreciated,

 

ANDREA

 

 

 

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


I have a follow on question- What is the possible legal consequence(s) for breech of contract?

Thank you for the Excellent Service rating, I appreciate it greatly,

 

 

If you sued the builder for breach of contract, you would have a claim for damages. The Courts have held that the sale of real estate is "unique" because the buyer is purchasing a particular lot and from a legal standpoint, if the purchaser for some reason cannot purchase that specific lot, he necessarily has damages. Sometimes it is easy to prove damages. Please allow me to give you one or two examples to clarify what I am saying,

 

Example 1

 

A purchaser had an Agreement of Sale to buy ABC lot for a purchase price of $80,000, but something went wrong and he could not purchase it, but was able to purchase a similar lot "DEF" in the same community for $100,000, it is clear to see that his damages were $20,000 because he had to pay $20,000 more for a similar lot in the same community.

 

 

Example 2

 

A purchaser was renting property and his lease agreement contained an option to purchase the property. The purchaser properly exercised his option to purchase and applied for a mortgage loan at 2% interest. The seller was not able to convey title free and clear of all defects by the settlement date and the purchaser's 2% interest from the bank expired. One month later, the seller was able to clear title and was ready to convey clear title to the purchaser. However, the purchaser's lender could not offer the purchaser the 2% interest and was now going to charge the purchaser interest at the rate of 3% per year. In this instance, the purchaser's damages was the difference in his monthly mortgage payment from 2% and 3%over the life of the loan.

 

In your situation you have to analyze the difference between what you were getting if you purchased the first lot with what you would get if you decided to purchase another lot which could accommodate the structure.

 

____________________________________________________________________

 

Please be kind enough to rate Excellent Service" so that I receive credit for assisting you,

 

Bonus and Positive Feedback on survey is very much appreciated,

 

ANDREA

 

 

Andrea, Esq. and 4 other Real Estate Law Specialists are ready to help you