If a buyer is in a contract with a builder and it is found by a licensed inspector that the brick does not meet state standards and the builder refuses to change the brick, who's responsibility is it to name the builder as the defaulting party and order him to pay for expenses incurred? In this case, the buyer signed a release of earnest money then the builder changed the form to reflect the cost of the appraisal be paid out of the earnest money. The buyer refused to pay since they were not in default. Doesn't the defaulting party absorb any expenses already incurred? Correct me if I'm wrong, if the buyer defaults then they lose any earnest money deposited to pay for expenses. So if the builder defaults, don't he have to pay for any expenses. If so, who can make him do that???????? (NOTE: The mortgage broker disclosure does not state the buyer will pay if the builder defaults).
2006-11-20 11:01:13 · 3 answers · asked by TSunrise 1 in Business & Finance ➔ Renting & Real Estate
As a real estate professional I would advise you to seek the council of a good attorney. Your question concerns law and they are the best to advise you on this matter.
2006-11-20 12:35:43 · answer #1 · answered by Me 2 · 0⤊ 0⤋
The mortgage broker disclosure has nothing to do with your contract, only the mortgage. Your contract clearly states the answers to your questions; I know it is probably about 30 pages long, as most new construction contract are. Normally, these disputes are mediated. The fee is split between both parties. If you don't like what the mediator says, then you can go to arbitration. Look in your contract for "Mediation/Arbitration" and see what it says about disputes. If you initialed the Arbitration clause, then you will have to stand by what the Arbitrator says. If it is under $7,000 (in Calif.), then you could always go to small claims. In any of these venues, the people in control of the decisions tend to take the side of the consumer. The builder appears to clearly be wrong. I don't know how he is to get a final certificate of occupancy so you can close your loan and he gets paid without meeting these standards. He can't get his final inspection signed off, he can't sell the house-not to you or anyone else, so he has to make it right.
2006-11-21 00:59:12 · answer #2 · answered by Realty Shark 4 · 0⤊ 0⤋
Many contracts include an agreement to settle disputes via arbitration. Your purchase contract should spell out some of this.
Here is some additional info. Hope this helps.
2006-11-20 19:07:08 · answer #3 · answered by Anonymous · 0⤊ 0⤋