Add addendum - breach of contract?

Too many issues here for a Realtor to be able to give you good advice on all of them. Suggest you refer these questions over to a good real estate attorney.

OK... I thought this forum had Real Estate Attorneys. If not, can anyone recommend a good one in Central Florida? Thanks!

For a real estate attorney, I would suggest you visit San Diego attorneys. This is a directory of attorneys listed by their main practice areas.

For Internet legal directories in other cities and states, you can see a hyper-linked table at: Los Angeles defense lawyers.

Buyer & Seller can always ask to add addendums to the contract, but that does not mean that the other side will agree to them. Which leads to your question, I think, which is "if the buyer does not agree to your new addendum, can you get out of the contract?" You will need an attorney to make that determination. With respect to the buyers not providing financing letter or not getting the inspection done within the time constraints of the contract means that they have waived those items, but does not mean you can terminate the contract. As other respondents have said engage legal counsel.

Thank you, Ray! We've decided to proceed, but I'm also still looking for a good recommendation on Real Estate Attorney in Orlando/Central Florida. Thanks!

Is there no date at which financing is no longer a contingency in your contract? When you receive the approval letter subject only to appraisal & clear title, isn't the financing contingency done. To me, it is pretty clear cut, they have not been approved for the loan, and are in breach...... Why wouldn't you write an addendum requesting the all the breaches to the contract be filled before the repair is made or hold the repair dollars in escrow with the title company.

At least that way, you will know where they are coming from without involving attorneys......not that I'm saying don't get an attorney......it's just that all avenues need to be explored before hand. The world is so busy these days, they might not even know they are in breach.

FINANCING DATES AND THE RULE AGAINST PERPETUITIES

Financing dates AND Moratoriums are TWO AREAS where what is known as The Rule Against Perpetuities can surface and create a void contract.

The purpose of this Rule it to prevent the remoteness of vesting of CONTINGENT interests and the Rule says [I will momentarily explain what follows], that no contingent interest is good unless it MUST vest, if at all, not later than 21 years after SOME life in being at the creation of the interest.

PLAIN ENGLISH ---- As a practical matter, any contingent interest must vest within 21 years from the date of its creation. That is because ANY LIFE IN BEING could die immediately. [ In a will, that could be different, because there a SPECIFIC life in being, though not always clear which one, is being referenced, which is another issue we can avoid here.]

What contract drafters need to know is a FAIL SAFE DATE for any contingency WILL prevent the possibility that the contingency can last longer than 21 years because IF that CAN OCCUR, the Rule is violated.

Enter Financing Contingencies and Moratoriums.

Whoever drafts a contract or modifies one MUST PUT A FAILSAFE DATE in the provision, least it CAN POSSIBLY continue for more than 21 years. IT DOES NOT MATTER HOW LONG IT ACTUAL;LY CONTINUES. WHAT ACTUALLY MATTERS IS THAT IT++++ POSSIBLY CAN OR COULD CONTINUE ++++ for more than 21 years., i.e.,

1. Purchaser is to obtain financing at ECKS [X] percent, say 5% at which time, the contingency is triggered. WHO KNOWS WHEN 5% WILL BE AVAILABLE, THUS THE RULE IS VIOLATED, BECAUSE IT IS ++++ POSSIBLE ++++ IT WILL NOT BE AVAILABLE FOR THE NEXT 21 PLUS YEARS.

2. Purchaser wishes to obtain financing for this transaction at the best possible rate and this matter will trigger when that rate is selected. AGAIN, SAME ISSUE.

3. CORRECT APPROACH -- Purchaser will have up to 6 month to obtain financing at the best available rate. FINE since 6 months cannot possibly exceed 21 years..

4. CORRECT AGAIN -- Purchaser is to obtain financing, at which time this contingency is triggered BUT IN NO EVENT shall this period exceed _____ days [or date.]

5. Purchaser is to obtain permits to __________. Whenever a permit to do something is not available ++++ NOW ++++ because a moratorium is then in effect for issuing these kinds of permits, MOST COURTS WILL HOLD that because a court CANNOT POSSIBLY KNOW WHEN A LEGISLATIVE BODY WILL ACT to allow permits to be again issued THAT IT IS POSSIBLE [NOT PROBABLE] that 21 years COULD pass before said legislative body acts. REMEMBER, IF IT ++++ CAN POSSIBLY ++++ VIOLATE THE RULE === THEN IT ++++ DOES ++++ VIOLATE THE RULE.

6. Exceptions SOMETIMES exist between a COMMERCIAL seller and a COMMERCIAL buyer, where some courts presume a higher degree of knowledge between the parties. i.e., in the State of Virginia, the court will IMPLY a """"REASONABLE TIME""""""" in the absence of a fail safe date BETWEEN 2 COMMERCIAL PARTIES. BUT in Washington, DC, The Rule applies strictly against everyone.

7. Three Harvard Law School graduates, government lawyers all, [or whatever] take a VIRGINIA FORM CONTRACT and use it in a transaction in Washington, DC. The Virginia Form Contract does not have a failsafe date in the financing contingency area BECAUSE IT IS DESIGNED TO BE USED BETWEEN 2 COMMERCIAL PARTIES IN VIRGINIA. The group approaches Mrs ZEEEEE, a 90 year old African-American female, who is hard of hearing with poor vision and a 4th grade education. They convince Mrs Zeeee to sell THEM her house and they tell MRS Zeeee that they will make 'best efforts' to OBTAIN FINANCING ASAP. They explain they just want to get the best possible rate, which she 'understands.'

8 months later another agent or broker ask Mrs Zeeee if they can buy her property. Mrs Zeee remebers the original contract, but does not mention it because she has never heard back from the 3 Musketeers from Harvard and so she also signs their their agreements that are DC Form Contracts, containing appropriate failsafe dates. WHAT RESULT ???

THIS WAS AN ACTUAL CASE and while the second group would prevail due to the first group's violation of the Rule in the financing provision, the first group refused to execute a release and instead sued group two. Once suit was filed, group two's broker authorized the agent to litigate, but refused to do so himself and also refused to finance the litigation. Group two's broker also refused to go forward under the new contract [pre-suit] without a release from group 1, which they declined to provide. Ultimately, a release was obtained from group 2, [the group with the valid contract] OVER THE NUISANCE VALUE OF THE COST OF LITIGATING AND THE TIME DELAYS INVOLVED.

Unlike with a Personal Injurt claim, contract claims are USUALLY not taken by lawyers on a completely contingency fee basis. Here to litigate this matter, all attorneys interviewed wanted a healthy retainer with hourly billing. The lawyer who ultimately accepted the matter, was willing to do so on a contingency fee basis, but declined to file a MOTION for SUMMARY JUDGMENT as a matter of law on the Rule Against Perpitiuties issue.

At that time trial dates were almost 2 years off and group 2 had an IMMEDIATE interest in the property. A Motion for Summary Judgment would have immediately determined the issue of whether the Rule Against Perpitiuties was CONTROLLING and since the lawyer declined to use that method, [arguing that the lawyer and not the client has control over litigation], group 2 withdrew FOR A $1 SETTLEMENT FROM GROUP 1. The lawyer who 'wanted control' got control and a 33 cent fee for being so stibborn !!!

THE ABOVE EXAMPLE SHOWS WHAT CAN HAPPEN, EVEN WHEN ONE IS IN THE RIGHT BASED ON THE ACTUAL OR POTENTIAL NUISANCE VALUE OF LITIGATION. GROUP TWOS BROKER WAS ALSO A MULITMILLIONARE, BUT A REAL TIGHT FISTED, CHEAP S.O.G./B.

AN ADDENDUM ON ++++ CONTRACTS AND THE RULE AGAINST PERPETUITIES

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The Contracts & Clauses Committee for YOU jurisdiction is aware of these potential issues. When they draft or modify a FORM CONTRACT for the state of ECKS [your state], they will ALWAYS put a fill safe provision in the contract.

WHERE ISSUES ARISE is where the Realtor takes a BLANK ADDENDUM and writes a provision out in long-hand they create themselves instead of using the Board's supplements.

Arguably, the drafting of contract provisions IN SOME JURISDICTIONS ++++ CAN ++++ be considered 'the practice of law,' but most states allow business persons the right to use already drafted forms in the creation of a contract. WHILE STRIKING AN EXISTING FORM PROVISION and long hand creating a new provision will likely never result in the charge of the unauthorized practice of law [unless it is done repeatedly, blatently and frequently also incorrectly, whenever possible Realtors should try to use Addendums provided by either their Boards, ZipForms or Autocontract to avaid these quirks of law which they may be little familiar with.