[nightnursein]

Hello. I am SOOO confused and nobody seems to be able to clarify for me. My spouse and I had been renting a home in Indiana due to his Mom becoming Ill and needing care. At this time, he was employed in Detroit, but went about finding another job here in Indiana. I also had been employed here in Indiana until anunexpected pregnancy at 40 made it impossible for me to work past my 4th month with complications. During my pregnancy and the 6 months following the birth, my job was "absorbed" due to our ever shrinking economy and I had allowed my licensures and registrations lapse due to caring for 2 teens, a baby and a mother in law with Parkinson's. My spouse continued to work both in Indiana and Michigan, as out insurance came from the Detroit job. During this time, his mom was hospitalized 3 different times and he ended up losing his job in Indiana due to "excessive abscences" during his first 90 days. He applied to several other institutions, to no avail. At this time, we started talking to the owner of the home next to our rental about a land contract. My spouse was making killer overtime in Michigan over the holidays and we thought we could get this place bought in 5 years time. We agreed to give up $ as a down payment $2500.00, and then pay out the other $50,000.00 at 7% interest over 5 years. March 1st and 15th we gave the scheduled $500.00 payments. In April, we were to give 2 more $500.00 payments and then May 1st were to have the other $500.00 plus the first month's installment and taxes owed for the year.

Spouse's mom dies. ZERO estate, actually left debt. No job appearing for him, my job no longer exisits, his OVERTIME now gets capped and we realize we CAN'T MAKE THESE PAYMENTS WE AGREED TO.

I have NEVER EVEN BEEN IN THE HOUSE. I DON'T HAVE A KEY TO THIS HOUSE. I called the owner... who is also a broker no less than 6 times and leave messages for him to contact me as does my spouse for 3 days prior to being 10 days past due on the April 1st $500.00 installment. No reply, no call. My spouse finally gets the lawyer on the phone who drew up the papers on the 11th of April and they all meet to talk. The owner / broker wants to know how much $ we can come up with for him to let us off the hook. We say "the original $2500.00 we agreed on as good faith $" He says no. He then says "$10,000 and I'll give you a quit claim." I don't have $10,000.

So, the lawyer and the spouse settle on a $6000.00 figure. I'm talking to 2 other people in the industry, one in Michigan and one in Miami who tell me I am CRAZY if I give this guy another dime. The deed was recorded on Feb 27th, I paid him 2 of 5 $500.00 installments towards the "good faith" deposit and then my financial world fell apart. I attempted to notify him and work something out and in the mean time, NOT ONCE HAVE I HAD ACCESS TO THIS PROPERTY. THERE ARE NO DAMAGES. THE HOME IS IMMACULATE AND EMPTY.

Now, in the last month since we started talking to this guy, I have had 2 people stop and ask me if the home is still for sale. I relayed this to the owner / broker and was told he wasn't interested in talking to them at the advice of the lawyer, because it would show he was letting me out of the contract... so I have no way of letting someone see this home to sell it and come up with the $50,000.00.

WHAT IS GOING ON? IS THIS LEGAL? I was advised to call the Indiana Real Estate Commission because the broker in Michigan said it sounded like fraud to him and that the lawyer and the owner / broker were in "Collusion".

ANY ADVICE?

[ScottGem]

A lot depends here on the terms of the contract. I would agree that you are out the $2500 you agreed to pay as a deposit. But I can't see you being held to the est of the contract unless the contract allows it.

[nightnursein]

The sum of $2500 was to be paid as a DOWN PAYMENT... not as a Non-refundable deposit. It was to be paid in $500 increments. I gave him 2 of these payments before April 1st. By that time, I had determined this wasn't going to work and made every attempt to call him to tell him I was willing to sign a "quit claim" paper so he could have his property back as people were asking about buying it. As I stated, we were never in possession of this property. I never set foot in it much less lived in it.

The purchase price of $50,000.00 was to be paid out over the next 4 years with 7% interest figured in via amoritization tables. This meant my monthly payment of $1197.31 would begin on May 1st of this year after my down payment was paid. On receipt of the $2500.00 and the $1197.31, I would then be given the "possession" and access to the property.

Buyer agrees to pay taxes beginning with the installment payable May 10, 2010, together with all installments of real estate taxes payable and due thereafter and seller agrees to pay all taxes on the real estate due prior to said installment. So, I don't owe any taxes on this property ( am I reading that right?).

Section 4 POSSESSION:
Delivery of Possession: Seller shall deliver to Buyer full and complete possession of real estate on or before May 1st, 2009. All utilities shall be paid by the seller to the date possession is given. ( never happened. Have never had access to this property not 1 day.)

Section 7 ASSIGNMENT OF CONTRACT OR SALE OF INTEREST IN REAL ESTATE:
If all or any part of the real estate, buyer's interest therein or buyer's interest in this contract is sold or assigned without seller's prior written consent, the unpaid purchase price, with accrued, but unpaid interest and all other sums due here under shall be due and payable immediately, at seller's option. No assignment or sale shall operate to relieve any party from liability hereon. (So, he's not interested in showing it to anyone, I have no access to show it and if I did have a buyer, they'd have to have traditional financing to come up with the amount in full.) basically, I'm stuck with this thing.

Section 8: USE OF REAL ESTATE BY BUYER:
The real estate MAY NOT be leased or occupied by persons other than Buyer without prior written consent of the seller. ( HE ABSOLUTELY REFUSES ) Does NOT want renters in there.

So, I can't sell it, can't rent it and I am moving 197 miles away in 17 days. Then:

Section 8.o4 BUYER's RESPONSIBILITY FOR ACCIDENTS. Buyer assumes all risk and responsibility for injury or damamges to person or property arising from buyer's use and control of the real estate and any improvements thereon. (So if it sits empty... I have to keep insurance on it while vandals break in and strip the copper, have crack parties in the livingroom and if any of the juvenile delinquints get hurt... I'm responsible because I can't live there and I can't let anyone else live there. WHAT?)

BUYER's DEFAULT:
Event of Default: failure to make a payment or being late by ten days. Lease or encumberment of the property other than expressly permitted by contract, Causing by buyer the making of any seizure, attatchment or levy of the real estate, Occurrence of an uninsured loss with respect ot the real estate, bankruptcy proceedings... can't be used to liquidate for debts, Desertion or abandonment of real estate, actual threatened alteration demolition waste or removal of any improvement now or hereafter located on real estate, Failure by buyer for 30 days to observe any covenant of this contract.

SELLER's REMEDIES:
9.041 Seller may declare this contract forfeited and terminated and upon such declaration, all right and title interest of Buyer in and to the real estate shall cease immediately and buyer shall be considered as a teneant holding over without permission and seller shall be entitled to re-enter and take immediate possession of real estate and eject buyer.
(No problem... we offered to sign this and were never living there)
Seller shall have the right to institute legal action and to recover from buyer all of the following:
* possession of the real estate... (no fight here)
* any payment due and unpaid at the time of filing of the action and becoming due and unpaid from that time until possession of real estate is recovered. (We never had possession... we offered to sign the quit claim on April 10th)
* Interest on the unpaid purchase price from the last date to which the interest was paid until judgement or possession is recovered, however, that would not be construed as allowing the seller to to recover any interest which would be included under subsection 9.041 above:
** due and unpaid real estate taxes, assessments, charges and penalties which Buyer is obligated to pay under this contract. ( I don't think I am obligated to any of this)
** Premiums due and unpaid for insurance which Buyer is obligated to pay under this contract ( I was to have insurance on POSSESSION of property)
**The reasonable cost of repair to any physical damage or waste to the real estate other thana the damage caused by ordinary wear and tear and Acts of God or public authorities. (Again... never set foot in house. It's in exactly the SAME pristine condition we got it in.)
** Any other amounts Buyer is obligated to pay under the contract.

9.042 Seller may declare all of the sums secured by this contract to be immediately due and payable. And may institute legal action to recover the same. When all sums are paid to seller, they will give the warranty deed and all taxes and assessments which are the buyer's obligation. ( So, he can still take me to court and force me to buy this house?)

In the event the buyer has substantial equity ($10,500.00) the contract is considered a promissory note. (Well, we have $1000.00 not $10,500.00, thank God)
SELLER'S ADDITIONAL REMEDIES:
***Retain without prejudice to his right to recover any other sums from buyer or to have any other remedy under this contract as an agreed payment for Buyer's use of the real estate prior to the event of the default, all payments made by buyer to seller and all sums received by seller as proceeds of insurance or as other benefits or considerations pursuant to this contract.

ATTACHMENT A

Real Estate and tax Insurance Escrow: Buyer is responsible for the cost of real estate taxes commencing with the installment dua and payable in May 2010. Furthermore, buyer is responsible for homeowner's insurance from the date of closing. Commencing with the first payment Buyer is required to make under the contract and each payment thereafter, Buyer shall pay seller monthly estimated Pro-rated monthly amount seller is required to pay for real estate taxes and insurance.

12.04 TERMS FOR PAYING DOWN PAYMENT:
Seller acknowledges receipt of $500.00 towards the down payment leaving the balance of $2000.00. The remaining balance will be paid in $500.00 installments as follows:
1. March 15th, 2009 - $500.00
2. April 1st, 2009 - $500.00
3. April 15th , 2009 - $500.00
4. May 1st, 2009 - $500.00
The May 1st payment of $500.00 will be in addition to the regular monthly payment of $1197.31 plus the escrow monies in the amount of $139.00 ( taxes & insurance) for a total of $ 1836.31.

SO... IN YOUR ESTEEMED OPINION... am I screwed? Or am I being screwed? The seller and the lawyer want $6000.00 to accept a quit claim and "agreement to forfeiture and resolution of outstanding issues" and want me to pay the lawyer who is refusing to accept my quit claim another $ 1104.00 for legal fees. They want this by the 22nd, or are threatening to take me to court and sue me for entire amount. I have had, as I said other brokers tell me this whole situation sounds hinky and that I should have the Indiana Real Estate Commission look into this broker and lawyer.

Well... any ideas? Thanks for your patience. Wendy:o

[ScottGem]

That looks like a pretty standard contract. I stand by my original answer. I believe he can hold you to the down payment, but not the balance of the contract. Since you never took possession and since you informed him prior to taking possession that you would not be able to. I don't believe you can be held to the balance of the contract. At the most, you might be held to the first months payment if you gave less than 30 days notice.

I would offer to pay the balance of the $2500 as settlement and release of any further obligations. If he refuses, get an attorney and tell him to take you to court.

I would place the balance of the down payment pluse one month's payment aside in case you lose.

[nightnursein]

Thanks Scott. I have had a lawyer look at this as well and he is saying that I owe him nada, other than the $ he already has. I appreciate your input.

Wendy:D

[ScottGem]

Your attorney may be right, but I'm not so sure.

Generally, a down payment is paid in a lump sum The fact that yours was paid over time may not end that it was owed when the contract was signed. That's what I'm basing my feeling that a court will rule you owe the $2500.

But we are still back to your telling the seller that you won't be paying anything and to sue you if he doesn't like it.

[nightnursein]

I'll let you know what happens. To my reading of the contract, I notified him ASAP and agreed to give him this back over a month ago and he started with a $10,000.00 figure to let me out of it... based on WHAT, exactly, I don't know and has lied and misconstrued the contract to make it appear that I owe him for things I don't think I am responsible for. The downpayment... if he was stupid enough to not mention that it was "good faith $" or imply that that figure was his free and clear no matter what happens... we will see what a judge says. I defaulted on a contract before we even had the down payment. You can't keep what you don't have and to continue to pay him was to comply with the terms of the contract and once that $2500.00 was paid, I then would have to legally take possession of the house. I didn't want to do that. I am unable to do that. The fact that the lawyer and the seller are so eager to get me to sign an agreement for $6000.00 tells me something is hinky and that they think I'm stupid and can't read. You know, in THIS economy, peoples lives DO change in an INSTANT and you can be homeless in a heartbeat. I think I will take my chances in court. And with the real estate commission. There's NO DAMAGES here. He's out NADA. The $6000.00 thing is crap and intimidation / extortion tactics. We will see what the seller's employer, the real estate agency he marketed this property under thinks of having an official complaint lodged against them. As a realtor, with me being the buyer, he certainly wasn't looking out for MY BEST INTERESTS in this last bit he cooked up with the lawyer. That's a violation of ethics right there. And as a consumer, I believe this is a form of predatory lending based on erroneous information the lawyer may be telling the seller. He's NOT entitled to the $ he's asking for under the contract and to threaten to foreclose when you damn good and well you have no grounds amounts to smoke and mirrors, hoping we are stupid and will gladly pay $6000 to avoid being sued for $50,000. Except I don't OWE you $6000.00. And if you are doing this to ME then as a broker, I'll BET you are cooking up some other crap with other people. Why should the Attorney General not be interested in that?

[nightnursein]

I'm hoping he will be smart and accept the quit claim, sign a release of financial responsibility and be glad I'm leaving the state. I wouldn't want the Real Estate commission auditing my records over $6000.00. Would you?:rolleyes: