Selling lots and lot reservations

What is the name of your state? minnesota

We are selling a few lots and accepted lot reservations last fall. The person in question signed a lot reservation and put $1000 down . The reservation stated that it was valid for 60 days after the fainal plat was approved. Plat was approved on Feb 15. As of Apr. 16, we had not heard from them. We had informed our agent in Feb. that we would cancel and relist any lots that did not sign a purchase agreement when the reservation expired. On Apr. 23 we recived a PA from the reservation holder. We rejected it and they are now sueing us for the lot. They say that since we did not inform them in writing that the plat had been approved that the reservation is still valid. The plat was approved by the county and recorded publicly. All the other reservations came in on time except this one. Our agent says he told their agent of the deadline.

Are we right?

You are doing this by owner, evidentally? And without an attorney advising you?

If you never delivered anything to them, either a title commitment establishing the new legal description, a certified copy of the recorded plat, a copy of the recording sheet, then how can they KNOW that the plat is now of record? Many counties have a rather significant "gap" in recordings being posted into the record. In my county, a document recorded TODAY would not show up as posted into the record for 6 weeks. I do not know what your county recording gap might be but it is unlikely that your verbal comment about approval is sufficient notice. Approval is NOT recording, the plat is not official until placed of record, regardless of having been approved. And "approved" in some places is the FIRST step in the process of sending the plat around for all the necessary signatures. It is not uncommon for it to take a week or so in some municipalities to obtain the signatures once the board appproves the plat. If a mayor signature is needed, the plat may not be ready to record for a good two weeks, if mayor is unavailable. The buyers have no evidence the recording occured until you provide it.

Verbal agreements are meaningless in RE. You needed to act by written notice.

Yes we have an attorney. I just like to hear other opinions. The lot reservation states that we will hold the lot at the stated price for 60 days from plat approval. The plat is signed by the county commisioner with language that says, to paraphrase: "I hereby approve this plat" and dated it 2/15/05. Our agent verbally told their agent when the plat was filed and again when it was nearing the deadline. All other lot reservation holders made the deadline with out trouble. These people, we have learned had formal purchase agreements on at least one other property . We were told by their agent that they would sign on two different occaisions, but they never did(It seems they were still working on the other lot they had a PA on) We gave them several days grace after that and with no word from them, canceled the lot hold.

I understand that verbal agreements are meaningless, but informing a person of an event(plat approval) is not an agreement.