Seller is Backing Out Despite Executed Agreement of Sale — File Notice of Interest???

[beekrock]

What is the name of your state? PA

My brother has a real estate wholesaling company. He has a house under contract (fully executed purchase agreement), but the seller is now saying they’re not going to sell it to him. I don’t think he’s wanting to go through the hoops/expense of hiring an attorney & filing suit for a lis pendens, but would the filing of a Notice of Interest be a good enough alternative here? If so, is there a particular form for it that we’d be able to file ourselves?

 

[quincy]

What is the name of your state? PA

My brother has a real estate wholesaling company. He has a house under contract (fully executed purchase agreement), but the seller is now saying they’re not going to sell it to him. I don’t think he’s wanting to go through the hoops/expense of hiring an attorney & filing suit for a lis pendens, but would the filing of a Notice of Interest be a good enough alternative here? If so, is there a particular form for it that we’d be able to file ourselves?

Are you an attorney? If not, it will be up to your brother to consult with an attorney in his area to determine his best course of action. There should be a provision in the purchase agreement that addresses the penalties if either party breaches the terms of the purchase agreement.

 

[Taxing Matters]

What is the name of your state? PA

My brother has a real estate wholesaling company. He has a house under contract (fully executed purchase agreement), but the seller is now saying they’re not going to sell it to him. I don’t think he’s wanting to go through the hoops/expense of hiring an attorney & filing suit for a lis pendens, but would the filing of a Notice of Interest be a good enough alternative here? If so, is there a particular form for it that we’d be able to file ourselves?

This is not a "we" situation. There isn't anything you can do for him. Moreover, if the contract is with his company and that company is a corporation, LLC, etc., then the company would have to have an attorney to pursue this for him unless he himself is an attorney. That's one of the downsides of operating as a corporation or LLC. Even if the business is a sole proprietor, I strongly recommend he see an attorney. A lis pendens will cloud the title and generally deter other people from buying it. A notice of interest won't have that same effect. If he wants to pursue this property, he'll likely need to sue the buyer for specific performance and file the lis pendens. If he does not want to pay for that then the profit he expects from this deal can't be all that large. If there is a lot to be gained here, then it's worth him getting an attorney. And, as I indicated, if it's a corporation, LLC, etc., he'll have to have one to pursue this.

 

[quincy]

Specific performance, as a note, can be approved by a court if actual damages would be insufficient or are otherwise impractical - but it is possible that the purchase agreement itself limits the remedies available. How the contract addresses a default/breach is what your brother should check first.

 

[adjusterjack]

My brother has a real estate wholesaling company.

Well, I don't have a real estate wholesaling company and my practical advice (not legal advice) is to let this one go and look toward the next deal.

Unless he's willing to spend many thousands on litigation, the seller can just thumb his nose and walk away from the contract.

 

[quincy]

I agree it could just be best to get any deposit money back and move on, assuming that not too much time or additional money has been invested in this particular piece of property and that no promises have been made already to others as it relates to this property that could complicate matters.

Whatever the case, it doesn’t sound like the brother wants to spend any money on a lawyer. If the brother is asking non-lawyer Beekrock for legal guidance, that is a pretty good indication that the brother probably should not try to enforce the agreement on his own (if, as Taxing Matters points out, his company could actually act without an attorney).