My land contract was breached..do i have legal recourse??

Question

I entered into a contract on a piece of property. I had a due diligence period for permitting and environmental testing. I had to get several extensions due to multiple environmental problems. Prior to closing I asked the owner to come down on the price due to the extra costs his prior enviro. issues caused me. We were close to an agreement when the final day of the contract arrived when I asked him to sign a 2 week extension but he did not. We continued to negotiate the next week and he then told me that he no longer wanted to do the deal. This is after 2 1/2 years of extensions and $200,000 in engineering costs on my part. I then told him I would honor the original price of the contract and he said he changed his mind and is pulling out. Do i have any recourse? The contract did expire without us closing but i was always under the impression we would come to an agreement and close ASAP. Any thoughts?

to respond..there was a deposit but the most of the money was spent to get permits during due diligence.
The seller continued to discuss price with me after the contract expired and gave me every impression that we would sign an extension and close. The seller backing out was a complete suprise. I now am finding out he is stealing my idea for the land and performing the construction on his own i was going to do.
I am looking into a claim of divergent reliance or specifc performance.
Any thoughts????

Answer 1

I don't' know, was your money a deposit for the land or was this money you paid for costs of checking out the land for purchase? If the money was for purchase, I don't think he has any obligation to you. In a due diligence the perspective buyer has their own team come in. The money for this is not paid by the owner. It's the same as buying a house. If our buying a house and you want it inspected generally the buyer pays for the inspection not the seller. (I'm sure you know this, I'm thinking out loud)... Hmm.. did you use a broker in your deal?

I am not saying this is true, I have been through several Due Diligence's, on both sides buyer and seller. I would consult someone an attorney that specializes in Property law..you have invested this much money you might as well spend another thousand to see what you can do to recoup some of your losses...


EDIT: Just reading your notes there, I think you definitely have something then. I personally would wait until he makes his first move on the property although, you don't want to wait. i would seek legal council immediately. See what their thoughts are, since you do have things "after" the contract was expired, you do have things in writing saying that plans were to close on that specified date. Maybe a judge would see it as a breach of contract on his side. Good luck to you!!!

Answer 2

Your contract was not breached if it simply expired without being completed.

If the contract expired without a closing then that's it, unless there was written language in it as to you getting reimbursed for the engineering costs.

Real Estate law is VERY strict on written contracts. Where a writing exists it is considered by law to constitute the WHOLE of the agreement between the parties. Nothing outside the written language of the contract will be considered by the court except under VERY unusual circumstances, such as your being able to prove actual fraud.

Richard

Answer 3

The contract expired without your closing. As a general rule, he is free not to extend your agreed-upon period. Talk to an attorney, since $200K is on the line...but I am not optimistic.

Not that this helps now, but it might have been beneficial to offer payment for the extension rather than asking for it gratis. You'd have locked in your options for the added time, and potentially saved yourself a lot of grief.