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Thread: Can seller's lawyer nullify the contract after signing because unpaid taxes?

  1. #1
    WaikikiJack is offline Junior Member
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    Exclamation Can seller's lawyer nullify the contract after signing because unpaid taxes?

    Case Study:

    The buyer entered into a real estate purchase contract with seller. The both parties signed the contract recently.

    Can the seller's lawyer nullify the contract due to the total amount of unpaid taxes and tax sales is larger than the contract agreed amount?

    By contract law, Once the real estate purchase contract is signed by both parties, Each party are entitled to enforce it.

    The pre-exist tax or tax sales associated to the selling property should be already considered before accepting the offer. Once the offer is accepted and signed, The seller can not nullify without proper reason or mutual agreement. Is there any mistake on seller's lawyer? Do you think seller's lawyer should be responsible for this mistake?

    Please advise.

    Thank you for reading.
  2. #2
    Proserpina is offline Senior Member
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    Quote Originally Posted by WaikikiJack View Post
    Case Study:

    The buyer entered into a real estate purchase contract with seller. The both parties signed the contract recently.

    Can the seller's lawyer nullify the contract due to the total amount of unpaid taxes and tax sales is larger than the contract agreed amount?

    By contract law, Once the real estate purchase contract is signed by both parties, Each party are entitled to enforce it.

    The pre-exist tax or tax sales associated to the selling property should be already considered before accepting the offer. Once the offer is accepted and signed, The seller can not nullify without proper reason or mutual agreement. Is there any mistake on seller's lawyer? Do you think seller's lawyer should be responsible for this mistake?

    Please advise.

    Thank you for reading.

    You're probably going to find that most volunteers don't do hypotheticals, case studies or homework.
  3. #3
    tranquility is offline Senior Member
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    When does the Peerless leave port?
  4. #4
    Stevef is offline Senior Member
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    Quote Originally Posted by tranquility View Post
    When does the Peerless leave port?
    Right behind the Wagon Mound 1
  5. #5
    tranquility is offline Senior Member
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    I don't really remember much of the Wagon Mound, except there were 2 and neither had a wagon or a mound in them. Peerless, on the other hand, might give the OP some guidance on the problem. (Depending on what is happening. I'm still not sure.)
  6. #6
    WaikikiJack is offline Junior Member
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    Real case --- not home work. We are encoutering this problem and need advice.

    Quote Originally Posted by WaikikiJack View Post
    Case Study:

    The buyer entered into a real estate purchase contract with seller. The both parties signed the contract recently.
    ....

    Is there any mistake on seller's lawyer? Do you think seller's lawyer should be responsible for this mistake?

    Please advise.

    Thank you for reading.
    This is a real case happen in my life. I am the buyer and need advice. Thank you.
  7. #7
    OHRoadwarrior is offline Senior Member
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    IMO both are insignificant parts of the contract. Unpaid taxes can be adjusted for the seller to pay. Sales tax is a mathematical error based on a constant and is subject to correction. You need to read your specific contract, for waivers/outs. State law will dictate. You should consult a lawyer as a threat of court action might be needed to compel the seller.
  8. #8
    Zigner is offline Senior Member
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    I suggest you take all of your documentation to a local real-estate attorney for review.
  9. #9
    WaikikiJack is offline Junior Member
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    Red face

    Quote Originally Posted by OHRoadwarrior View Post
    IMO both are insignificant parts of the contract. Unpaid taxes can be adjusted for the seller to pay. Sales tax is a mathematical error based on a constant and is subject to correction. You need to read your specific contract, for waivers/outs. State law will dictate. You should consult a lawyer as a threat of court action might be needed to compel the seller.
    The contract offering price is $10,000.
    The actual tax owed to 3rd party in tax sale is around $12,000 (2008,2009,2010,2011 property taxes plus penalty). This do not include the agent's commission. This lawyer is asking to increase another 7,000 in order to balance the worksheet. My question is --- do we have the right to enforce this contract without adding additional $7000 dollars on the closing table? Is there any mistake from the seller's lawyer? He should have not sign the contract at the beginning,right?
  10. #10
    tranquility is offline Senior Member
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    No one knows until you litigate the issue. You can get a good guidance from seeing a local attorney who can review the facts and see what issues arise. Maybe it is the seller's problem, or maybe it is the buyer's--but I do know that people were not thinking about all this tax lien on the property and the equitable result is difficult to see other than putting the parties back where they were before the liens were discovered. But, if the contact envisioned the tax liens or the state requires disclosure/due diligence on the matter, who knows?
    WaikikiJack likes this.
  11. #11
    nextwife is offline Senior Member
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    THere may not be sufficient funds to close, pay off required closing expenses and pay off back taxes. If the sellers do not have funds to make up the shortfall, and you are unwilling to do so, it likely cannot close.
  12. #12
    HomeGuru is offline Senior Member
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    Quote Originally Posted by WaikikiJack View Post
    The contract offering price is $10,000.
    The actual tax owed to 3rd party in tax sale is around $12,000 (2008,2009,2010,2011 property taxes plus penalty). This do not include the agent's commission. This lawyer is asking to increase another 7,000 in order to balance the worksheet. My question is --- do we have the right to enforce this contract without adding additional $7000 dollars on the closing table? Is there any mistake from the seller's lawyer? He should have not sign the contract at the beginning,right?
    **A: off hand I would say yes, but it depends upon the terms and conditions in the contract.
  13. #13
    tranquility is offline Senior Member
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    For there to be a contract, there must be a meeting of the minds. If one thinks this is a sale for land and the other thinks it is for land (free and clear), there may not be a contract.

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