New home and contract

[Alex02]

What is the name of your state? CA

Hi, my folks just recently bought a house that will be done in a couple months. The contract says our house is lot 55, 999 X street.

Now, we went to go see how the contruction is going (theres about 80 houses being made) and we look for lot 55. We eventually find it on Y street. We signed for a house near the back of the neighborhood and we find out that lot 55 is smack dab in FRONT of the neighborhood which we DONT want and DIDNT agree on. When we signed, the seller showed us where our house would be on a lot map which was in the BACK. I dont know whats going on and we have been paying very high interests for 3 months and dont want to settle for something we didnt want. It is a big deal to us.

I left a message on her machine this afternoon and im wondering if you can give me some advice or options. I know you cannot see the contract but there is a clear mistake. The contract says our house is on X street and when we went to go visit our empty lot we find it is on Y street. If this was some kinda of error and our house is actually on Y street, what can be done?

Basically looking for some general rights before matters get thicker

[HomeGuru]

Originally posted by Alex02
What is the name of your state? CA

Hi, my folks just recently bought a house that will be done in a couple months. The contract says our house is lot 55, 999 X street.

Now, we went to go see how the contruction is going (theres about 80 houses being made) and we look for lot 55. We eventually find it on Y street. We signed for a house near the back of the neighborhood and we find out that lot 55 is smack dab in FRONT of the neighborhood which we DONT want and DIDNT agree on. When we signed, the seller showed us where our house would be on a lot map which was in the BACK. I dont know whats going on and we have been paying very high interests for 3 months and dont want to settle for something we didnt want. It is a big deal to us.

I left a message on her machine this afternoon and im wondering if you can give me some advice or options. I know you cannot see the contract but there is a clear mistake. The contract says our house is on X street and when we went to go visit our empty lot we find it is on Y street. If this was some kinda of error and our house is actually on Y street, what can be done?

Basically looking for some general rights before matters get thicker

**A: take your contract documents and meet with the sales office principal broker. If that does not clear things up, meet with a real estate attorney.

[nextwife]

Was this being purchased turnkey or is this a construction loan/ mortgage?

If this is a construction loan/mortgage, the legal description on their mortgage and the lot purchased would be different than that of the home being built. I have seen builders (although rarely) mess up and build on the wrong sudivision lot, but this is usually caught when the foundation survey is done. The foundation survey is generally reviewed by whichever title provider is doing the draws, at first draw. IF this is how their construction is being handled (in our market 90% of all financed construction is done this way), they need to go to the title insurer and lender and advise them the builder has built on a different lot than the one they purchased/financed. The lender will then likely get involved because they will not be pleased that their construction funds are going toward a property other than the one they financed for your folks.

If this is turnkey, then HGs suggestion is a good place to start. If they have entered into a contract to buy a house being built on lot X in block Z, but the builder put ther house they wanted on Lot X in block Y, they are likely not obligated to buy it. Depends upon their contract. An attorney should be consulted. But Block Y IS a different parcel than Block Z and not what they agreed to buy, based upon your post.

[HomeGuru]

Originally posted by nextwife
Was this being purchased turnkey or is this a construction loan/ mortgage?

If this is a construction loan/mortgage, the legal description on their mortgage and the lot purchased would be different than that of the home being built. I have seen builders (although rarely) mess up and build on the wrong sudivision lot, but this is usually caught when the foundation survey is done. The foundation survey is generally reviewed by whichever title provider is doing the draws, at first draw. IF this is how their construction is being handled (in our market 90% of all financed construction is done this way), they need to go to the title insurer and lender and advise them the builder has built on a different lot than the one they purchased/financed. The lender will then likely get involved because they will not be pleased that their construction funds are going toward a property other than the one they financed for your folks.

If this is turnkey, then HGs suggestion is a good place to start. If they have entered into a contract to buy a house being built on lot X in block Z, but the builder put ther house they wanted on Lot X in block Y, they are likely not obligated to buy it. Depends upon their contract. An attorney should be consulted. But Block Y IS a different parcel than Block Z and not what they agreed to buy, based upon your post.

**A: it would not matter if the loan was a construction loan or permanent mortgage as the legal description of the land would be the same as that of the land and home since the home would be sitting on the same described property.

[nextwife]

The resolution process might be different if they have already been deeded the land, and the house was being built elsewhere (and, the way it's done here, the house being built could be on land owned by someone other than the builder if the legal is wrong), vs the process of reserving the lot and being deeded the land upon completion. In the typical process here, one is deeded the lot and then the structure is built under a construction loan. In either case, the legal is wrong.

[HomeGuru]

Originally posted by nextwife
The resolution process might be different if they have already been deeded the land, and the house was being built elsewhere (and, the way it's done here, the house being built could be on land owned by someone other than the builder if the legal is wrong), vs the process of reserving the lot and being deeded the land upon completion. In the typical process here, one is deeded the lot and then the structure is built under a construction loan. In either case, the legal is wrong.

**A: it is not relevant what the process is or what entity holds title to the property at the time of sale. The legal description of the land that was sold should remain the same.

[nextwife]

The legal of the lot they bought (are buying) is Lot 55, X street. The house was built on Y street instead. If the house is turnkey, and the vacant lots remain the property of the builder until each home is completed and closed, the problem is resolved between buyer/lender and the builder developer because it is the builder that is owner of each lot involved.

If the house is being built using a purchased lot using a construction loan, and the structure has been (partially) built on Y street instead of the lot they own on X street and the lot their lender has a mortgage on, it is a much bigger mess. The lot may be owned by a different private owner, and have a mortgage to an entirely different lender against it. Additionally, different title insurers may have written the owners policies on each lot, depending on which lender financed it and who they use. Determining who is handling the construction draws and reviewing the foundation survey is very relevant as to claims responsibilty.

In either case, the builder put the house on the wrong lot, and it is a problem. If the builder put the house on someone elses lot, it's even worse and resolution will be more involved.

[HomeGuru]

Anything new writer?

[Alex02]

Well she returned the call and let me know that she is looking into the issue and will call me as soon as she figures it out. Thats basically what she said.. Ill just play the waiting game.

[HomeGuru]

Don't wait. Meet with the principal broker in 7 days.