3 years ago my husband and I signed a contract for 5 years to purchase a house in KY.

Under the contract we were permitted to rent it and we did. The tenant has left and I have moved in. The sellers have refused my payment attempting to show I am in default.

They attempted to have me evicted but the Judge dismissed the case because he said I was not a "tenant" and had different rights.

I have sent my payments to the Mortgage Company which they accepted.

I would like to bring this case before the Courts to have my rights established.

Any suggestions?

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Originally Posted by KalamR

The sellers have refused my payment attempting to show I am in default.

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Hello K:

Attempting to show WHO?? A judge?? Doesn't sound like you're in court right now. Sounds like the last time you were there, the judge ruled for you.

Whatever rights you have as a purchaser are contained in your purchase and sale agreement. There's nothing more to get in court. You go to court to court to defend the rights you already have - not to get new ones.

And, if there's NO court case going on, as in they're suing for foreclosure, there's NOTHING to go to court for. Apparently you already HAVE rights, because the judge could tell that you're not a tenant.

If, however, you're supposed to be making your payments to the seller and NOT the mortgage company, then you've got to get that straightened out.

WHY are they saying you're in default?

excon

Hello X,
What you say makes perfect sense. By virtue of the Judge dismissing the case that does say something. I was just trying to have my contract validated so the seller would stop playing games with me.

The seller refused my payments with the hopes to show I haven't paid and therefore declare the contract void. I sent the payments to the mortgage company as a remedy so I wouldn't be in default.

The seller is hostile now because the house has gained $25,000,00 in equity and I am buying it for the contract price of $72,000.00 and I still have 2 years left before I have to close on the contract.

Should I press on with the Declaration of Rights or lay low until their next move?

What mortgage company? This part confuses me. Are you paying the mortgage that is in the seller's name or yours. If its not in your name, then stop. Hopefully what payments you made you paid by check so you can prove you made the payments.

When you say the seller refuses the payments, please provide more details. Are they just not cashing the checks, returning them or what?

Without knowing that info its hard to advise how to proceed, but one thing I would do is set up an escrow account (just a regular savings account) and deposit your contractual payment in that account. If this goes to court, you can then show that you were setting the money aside to make the payments because the seller wouldn't accept them.

Quote:

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Originally Posted by KalamR

I was just trying to have my contract validated so the seller would stop playing games with me....... Should I press on with the Declaration of Rights or lay low until their next move?

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Hello again, K:

Courts validate contracts WHEN there's a dispute in front of them. If there's NO dispute, and the WRITTEN contract doesn't contradict the law, or doesn't require someone to give up their rights, and is agreed upon by BOTH parties, then it IS legal. It doesn't need, nor will you get, a court to validate it.

Now, I DO see a dispute here, and you certainly MIGHT wind up in court. But, it'll be because the seller is trying to screw you, and you aren't going to let him.

I can see, as ScottGem pointed out, that there's a problem brewing in terms of who is supposed to pay who, and why... That's REAL important stuff... It's the stuff people LOSE their homes over if they're not careful.

So, at this point in time, I think you need the services of a good real estate attorney. He'll PROTECT the rights you already have. HE might be able to convince the seller to act right, or he may have to sue him. I don't know.

Frankly, you should have had an attorney involved in your purchase from the get go. If you did, you probably wouldn't need one now.

excon

Hi X,
You are correct, the seller is trying to screw us. My concern is that the seller wants out of this contract. My fear is that he has been pocketing the payments and have not paid the mortgage payments which presents a big problem.

I have spoken to an Attorney and his retainer is $5,000.00. In my initial consultation he talked about the Declaration of Rights. He wanted to bring this contract before the Court so the seller would be forced to either accept the payments or allow me to send the payments to the Mortgage Co. so the house does not go into foreclosure.

How should I bring this before the Courts to get some resolve to the payments and rest my fears of the house going to foreclosure?

Hi Scott,
As explained in the previous answer to excon, the reason I sent the payments to the Mortgage Co was because the seller will not accept my payments. Won't cash them and refuses my certified mail.

I just want to get this settled by having a Judge tell the sellers they have to accept my payments so I won't lose the house.

Thanks so much for your input, keep them coming.
K

Hello again, K:

I have no idea what that attorney was referring to. Like I said, I don't know what that procedure is. But, you're not going to hire him anyway...

I think you can do MUCH better than $5,000 if you shop around. This may ONLY require ONE tough letter from an attorney telling the seller to adhere to the contract or be sued.

If THAT'S all it takes, NO attorney should charge more than a couple hundred dollars for that. Of course, if he actually has to file suit and go to court... But, a GOOD attorney, ought to be able to convince a seller that he CAN'T win, and it will cost HIM a great deal of money to defend a suit by the buyer...

Shop around. I DON'T think this is something you can handle YOURSELF, because YOU, like me, have no idea what the hell it is.

excon

This is something I have a real hard time understanding. You ask us for help and we tell you we need more info and ask some specific questions. Yet you don't answer them! How do you expect us to help without giving us info?

You already said that you sent the payments to the mortgage co because the seller wouldn't accept them. But we need to know whose name the mortgage is in. We need to know how you made these payments. We need to know how the payments were rejected and what reasons the sellers stated. Please provide the info we need to help you and any other details that may be pertinent.

As excon said, you have a contract. You need to read that contract carefully and understand what the seller can do to terminate the contract. Especially since you are now living in the house, they can't get you out without evicting you. This means you get your day in court.

I don't know what action you can take at this point at lease not until you answer my questions.

Hello Scott,
To answer your questions, the mortgage is in the name of the seller. I sent my payments to them and the checks were never cashed. I sent certified letters to them and they rejected them. That is why I sent the payments to the mortgage company.

I hope this helps.

Thanks,
K

Do you have proof that the mortgage company accepted those payments and applied them to the mortgage? Did you put a stop on the payments that were never cashed?

Again, do not send anymore payments directly to the mortgage company. Setup the account as I suggested and deposit your payments into that account. Send the seller a certified letter stating that since they have refused contact with you all your payments will be deposited into this account (include the name of the bank and the last 4 digits of the account number).

If they refuse this letter keep the returned letter UNOPENED. You need to make sure that your contract is recorded with the county. I'm not sure what the exact process is, but the county clerk or your attorney should be able to help. You want to make sure that the property is not transferred without your knowledge.

Once that is done, you kind of have to sit back and wait. I'm not sure what other legal action you can take to force them to accept the payments. But if you take the steps I have outlined you will protect yourself against losing the property.

By all means consult a local real estate attorney, but I believe they will give you similar advice.

Hi Scott,
The mortgage Company has accepted the payments as I sent it "Certified, return receipt" and have the receipts (Nov. & Dec.) My only concern is if I put the payments in an escrow account as you suggested the house will go into default and I run the risk of losing it.

I will take the contract to the Clerk of the Court and see if I can have it filed.

Thanks,
K

Not if you follow my instructions. If you pay the mortgage directly you are doing so voluntrily. It has no bearing on the contract. You have no legal connection to the mortgage. The courts might simply consider it a gift.

But if you setup an escrow account and he takes you to court you have proof that you attempted to pay and have put the money aside. If the lender tries to foreclose they won't be able to transfer the property until your claim is resolved.

Are you trying to obtain your own financing?