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Our law office handles disputes in connection with purchase/sale agreements,
escrows, fraud and real estate broker liability (including constructive fraud).
Real estate sales transactions can result in numerous problems for both seller
and buyer. A seller can fail to perform under the contract and so can the buyer.
But, unless such performance pertains to a condition (e.g. failure to purchase
because buyer couldn't obtain financing which was a condition of purchase),
the party failing to perform may be in breach of contract and liable for damages
to the other party.
If the buyer breaches the contract and a liquidated damage provision is initialed
by the parties and meets certain statutory guidelines, the deposit becomes the
sole damages. If the seller breaches, or the buyer breaches and there is no
effective liquidated damage clause, damages consist of the benefit of the bargain
(i.e. difference between the contract price and market price of property) and
other items. A breach however is not caused just by a party failing to perform;
the other party has to make certain that he has done everything or substantially
everything required on his part to be performed, or as to the payment of the
price (by buyer) or deposit of deed (by seller), offered to perform on condition
that the other party perform. An exception would be when prior to complete performance
by one party that party orally or in writing announces that he will not perform.
Then the other party the has an immediate claim for breach of contract against
the party making such statement without the claimant party having to first complete
his performance or making an offer to perform.
Fraud by the seller in a real estate sales contract can allow the buyer damages
or alternatively the right to rescind. Fraud by the seller must consist of an
express misrepresentation, or an active concealment of or failure to disclose
a material defect. In the first case the fraud must result from intentional
or negligent conduct and in the last two instances must arise from intentional
conduct. In the case of an express intentional misrepresentation the seller
must know of its falsity or have no knowledge of whether the representation
is true or false. In the case of a negligent express misrepresentation the seller
would believe that the representation conveys the truth but the belief is not
well founded. Active concealment and failure to disclose must be deliberate,
that is the seller had knowledge of the defect. As to non-disclosure the defect
must be latent, which is not obvious to the buyer. Examples of fraud ---exaggeration
of income of income producing property, failure to disclose leakage problem
and painting over area in ceiling where water drips from leak.
Do
I Need a Lawyer?
An article by the New York State Bar Association.
Closing
Costs
Learn about closing costs associated with the purchase or sale of real estate.
Real
Estate Transaction Disputes
Our office handles disputes in connection with purchase/sale agreements, escrows,
fraud and real estate broker liability (including constructive fraud).
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