What is the name of your state? TN
I have already posted my situation in a previous post. Basically I am in a contract for the purchase of property and the construction of a residence on the property with a psychotic developer. I paid $3600 earnest money on March 7. The seller was supposed to pay for everything and we were supposed to have the balance of the purchase at closing. On March 16th the seller contacted us and tried to convince us to get a construction loan. After discussing with the bank, we decided against it due to the additional costs and increased risk, plus the seller was unwilling to do an addendum to the original contract. I then contacted the seller and said that I decided against the construction loan and want to go with the original contract which states she builds it and I pay for it once it's complete.
This enraged her. She began making outrageous threats. She was threatening to charge us 16% interest and double the closing costs. She also stated that we now had less than 24 hours after the house was complete to have the remainder of her money or she would turn us over to the a Credit Bureau. I asked her why she was making threats towards us. She kept going on about ruining our credit. She asked "why are you doing this?". I told her that we weren't doing anything wrong, we just could not take the risk of the construction loan without an addendum. She continued making the same threats and said when she gets done with our credit we would never be able to buy another house. I kept trying to reason with her, but she did not want to talk and kept making threats. Finally, she hung up on me. This conversation both surprised and scared us. Why was she making these threats when we didn't do anything wrong?
On April 7th she sent a fax to my workplace that was supposedly a "progress report" which contained more threats to charge us 16% interest and ruin our credit. In it she stated that she has the green light to proceed with construction (which was supposed to start no later than March 17th). She also stated that we would have no input on the colors, fixtures, cabinets, etc. This would be chosen by her even though we had previously mutually agreed to those items. She stated that the house would be built as close to the road as possible which she knew we also did not want. She said that we weren't allowed on the property to inspect the materials, quality of work being done, etc until construction was over and it would be considered tresspassing if we did. She basically stated she would do the opposite of everything we had agreed to. Also, we don't know which plans she is going with because there has been so many proposed changes to the original plans (making the house smaller) that we never approved. She then gave us a deadline to reply if we wanted to get out of the contract, and if so, we would discuss the terms. These terms which she laid out in a fax sent today was basically to pay her $28,000 by April 11th and she would sign a release.
We believe she never had an intention to build the house without our construction loan because she does not have the finances (she had a foreclosure in 1999). The fax was just to spite us and get us to back out of the contract (place us in default) because we did not want to go with the construction loan and therefore she could not proceed with the construction. No construction on the land has begun, so she has defaulted according to the contract. Also, when we called the contractor and asked when construction would begin he would not give us a date, but stated that she told him to go ahead and pull the permit. The whole time she stated that she was waiting on the ground to dry before construction began, but she never even had the permit which further suggests that everything was contingent on our construction loan. Basically, we do not want to have to deal with this scrupulous developer, who makes threats to ruin us when we have not done anything wrong. What are our options? If we took her to small claims court for breach of contract would we have a case since she has defaulted? We have talked to 3 different lawyers but there only advice was to send her a fax with a rescind contract agreement in there and put the ball in her court. I have done that and she has rejected stating that the only way she is going to let us out is to pay her $28,000 dollars. I want out, and I don't want to go through with the deal even if she begins construction. If I decide to just back out, will I just lose the earnest money or could there be additional costs? She can't force us to go through with the deal, can she?
Sorry the post is so long, but I want to be as detailed as possible. Thanks alot for your time
I have already posted my situation in a previous post. Basically I am in a contract for the purchase of property and the construction of a residence on the property with a psychotic developer. I paid $3600 earnest money on March 7. The seller was supposed to pay for everything and we were supposed to have the balance of the purchase at closing. On March 16th the seller contacted us and tried to convince us to get a construction loan. After discussing with the bank, we decided against it due to the additional costs and increased risk, plus the seller was unwilling to do an addendum to the original contract. I then contacted the seller and said that I decided against the construction loan and want to go with the original contract which states she builds it and I pay for it once it's complete.
This enraged her. She began making outrageous threats. She was threatening to charge us 16% interest and double the closing costs. She also stated that we now had less than 24 hours after the house was complete to have the remainder of her money or she would turn us over to the a Credit Bureau. I asked her why she was making threats towards us. She kept going on about ruining our credit. She asked "why are you doing this?". I told her that we weren't doing anything wrong, we just could not take the risk of the construction loan without an addendum. She continued making the same threats and said when she gets done with our credit we would never be able to buy another house. I kept trying to reason with her, but she did not want to talk and kept making threats. Finally, she hung up on me. This conversation both surprised and scared us. Why was she making these threats when we didn't do anything wrong?
On April 7th she sent a fax to my workplace that was supposedly a "progress report" which contained more threats to charge us 16% interest and ruin our credit. In it she stated that she has the green light to proceed with construction (which was supposed to start no later than March 17th). She also stated that we would have no input on the colors, fixtures, cabinets, etc. This would be chosen by her even though we had previously mutually agreed to those items. She stated that the house would be built as close to the road as possible which she knew we also did not want. She said that we weren't allowed on the property to inspect the materials, quality of work being done, etc until construction was over and it would be considered tresspassing if we did. She basically stated she would do the opposite of everything we had agreed to. Also, we don't know which plans she is going with because there has been so many proposed changes to the original plans (making the house smaller) that we never approved. She then gave us a deadline to reply if we wanted to get out of the contract, and if so, we would discuss the terms. These terms which she laid out in a fax sent today was basically to pay her $28,000 by April 11th and she would sign a release.
We believe she never had an intention to build the house without our construction loan because she does not have the finances (she had a foreclosure in 1999). The fax was just to spite us and get us to back out of the contract (place us in default) because we did not want to go with the construction loan and therefore she could not proceed with the construction. No construction on the land has begun, so she has defaulted according to the contract. Also, when we called the contractor and asked when construction would begin he would not give us a date, but stated that she told him to go ahead and pull the permit. The whole time she stated that she was waiting on the ground to dry before construction began, but she never even had the permit which further suggests that everything was contingent on our construction loan. Basically, we do not want to have to deal with this scrupulous developer, who makes threats to ruin us when we have not done anything wrong. What are our options? If we took her to small claims court for breach of contract would we have a case since she has defaulted? We have talked to 3 different lawyers but there only advice was to send her a fax with a rescind contract agreement in there and put the ball in her court. I have done that and she has rejected stating that the only way she is going to let us out is to pay her $28,000 dollars. I want out, and I don't want to go through with the deal even if she begins construction. If I decide to just back out, will I just lose the earnest money or could there be additional costs? She can't force us to go through with the deal, can she?
Sorry the post is so long, but I want to be as detailed as possible. Thanks alot for your time