Any Advice for House purchase in Bronx, New York gone amuck?

[Complicated]

What is the name of your state? Bronx, New York

This matter is for my parents. They used a real estate to find a two family house in the Bronx, NY to purchase. The house that they found was resided by the Seller and one tenant on Section 8 rental assistance. The binder contained two additional stipulations that were written in: 1) The Seller would remove all housing code violations. 2) The house would be vacated of tenants.

The Seller signed the binder and the house went under contract. In the contract, the two stipulations were written down AND an additional notation was also written. The sale would be completed entirely by cash (check), no mortgage. Paying out the house was possible by cash because they had sold their own home and were currently living with relatives.

The Seller's Attorney notified Our Attorney that it would take about SIX months in order to complete the removal of the housing code violations and vacating of the tenant. A 10% down payment was given to the Seller to hold in an escrow account.

Fast forward to yesterday. Our Attorney calls and says that the Seller's Attorney has, by phone, verbally stated that the tenant could not be evicted and that the down payment would be refunded. The house was to be repossessed by the bank and auctioned.

Yesterday my parents immediately demanded to visit Our Attorney who stated that she was too busy. My parents pressed her and finally she gave in and set an appointment for that evening.

This is when my parents discovered that the Seller's Attorney had mailed back the check along with a letter with the postmark of JULY 27TH 2007. Our own lawyer had taken over TWO weeks to notify me of the situation. My parents also discovered something else. The letter that the Seller's Attorney sent does NOT mention anything about unsuccessful eviction of the tenant. Instead, it simply states that the agreement of the sale of the house is canceled because my parents failed to provided the Seller's Attorney with a copy of a paper from a bank stating that they would provide an adequate mortgage.

This set off some alarm bells and strange vibes. Recall from above that it was written in the contract that this would be an ALL CASH transaction. Absolutely no mortgage was necessary as the funds were already available even before signing of the contract.

My parents pressed Our Attorney about recourse in terms of lawsuits but Our Attorney basically shrugged them off stating that the contract was still NOT YET VOID because we have not yet responded. This put my parents in a dazed confusion. Our Attorney stated that she would send the deposit check BACK to the Seller's Attorney and enclose a letter stating that the contract would be valid as the mortgage was not necessary.

So basically at this point, the Seller's Attorney says that the contract is canceled. Our Attorney says the contract is NOT canceled.

My parents' theory about why this is possibly occurring is that the Seller realized that the house was sold for too low of a price and is now trying to figure out a way to back out of the contract. My parents considered contacting the Real Estate office but realized that if the house were to be put back on the market, the Real Estate office could make more commission off of the higher selling price. Thus, the Real Estate office would probably not be on their side.

My parents have made copies of ALL documents including a copy of the deposit check. I have advised them to start looking for other lawyers as the one they have doesn't seem very competent.

What should my parents do? Is there any recourse in terms of lawsuits if the deal does not fall through? Can anyone suggest a good lawyer in NYC who could possibly help solve this matter better than the one we already have?

[You Are Guilty]

It would be impossible to comment without reviewing all the paperwork in detail, but if there was no mortgage contingency written into the contract, the seller cannot cancel it on that basis. (However, they can argue that the acceptance of the returned deposit check waived your folks' rights to argue that point). If there was a mortgage contingency written into the contract when none was needed/wanted, then you can try filing a complaint against your attorney here: http://www.courts.state.ny.us/courts/ad1/attorney_discipline.shtml but don't expect too much to come of it.

On the other hand, if your attorney is actively negligent (as opposed to slightly slow - 2 weeks is not a long time in the summer when most people take their vacation), then you would have more luck with the link above.

At a minimum, your parents are probably best served by taking all the paperwork to another lawyer for a review to see where they stand - among others, things to look out for are: presence of a mortgage contingency; "time is of the essence" clause; specific wording of clause stating house would be delivered tenant-free; any liquidated damage clauses; any "specific performance" clauses; and any arbitration clauses.

To find a lawyer, click the burnt umber "find a lawyer" button on the right side of your screen, or try the Bronx County Bar Association - $30 for 30 minute consultation (they operate out of the Supreme Court up on Grand Concourse by Yankee Stadium):
http://www.bronxbar.com/referralservices.htm

Good luck.