QUESTION
Can I sue a seller for financial damages when the sellers are not authorized to sell the house and so we could not close?
Asked on Nov 19th, 2016 on Landlord and Tenant Law - Washington
More details to this question:
I made an offer 2 months ago and when we wanted to close, the escrow company refused to do so because they found the sellers are unauthorized to sell the house (buyer was ready and has done all the obligations). In form 21 it says "If title cannot be made so insurable prior to the Closing Date, then as Buyer’s sole and exclusive remedy, the Earnest Money shall, unless Buyer elects to waive such defects or encumbrances, be refunded to the Buyer, less any unpaid costs described in this Agreement, and this Agreement shall thereupon be terminated. Buyer shall have no right to specific performance or damages as a consequence of Seller’s inability to provide insurable title." Seller’s agent says we cannot sue them because of this. In form 17, the sellers have stated they are authorized to sell the house.
1 ANSWER
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That clause about remedies would be a defense to you trying to sue. You could get your earnest money back and any expenses that are permitted by the agreement, but that would be all. The Form 17, however, could provide you with a separate avenue. Form 17's are for disclosure only, and by statute, are not part of the purchase and sale agreement. So, if there is a misrepresentation on it, you might be able to seek recourse based on the false disclosure. At that point, the question would be why the sellers don't have the right to sell. It would help to know the nature of defect in title. Sometimes you might be able to correct it without suit and avoid expensive litigation. I would recommend that you contact a local attorney to review your situation thoroughly with you. The foregoing is offered as general information only, and does not constitute legal advice. Please be advised you should consult a lawyer for advice specific to your situation.The foregoing should not be construed to establish an attorney client relationship.
Answered on Dec 28th, 2016 at 6:27 AM