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Dear Mr. Feichthaler,
We contracted to purchase a home that was not yet complete. The contract provided we close 10 days after the house was ready, shown by the certificate of occupancy. Due to the uncertainty on time, we told our lender to be ready to close once the CO was issued. The Certificate of Occupancy was issued on Feb. 3, but we didn't know until the 10th. The builder said we had to close by the 13th, or we would lose our deposit and not be able to buy the home. Our lender could not complete their appraisal in time, so we couldn't close on the 13th. Now, the builder will not answer our calls or emails, and we still want to buy it. What can we do?
-- John and Dorothy R.
John and Dorothy,
This is a situation I am hearing more and more. First, builders are having challenges finishing homes when expected due to lack of labor and materials. In the meantime, prices have soared over the past year, which has led some sellers to attempt to get out of contracts so they can sell for a higher price. This brings me to the number one priority for anyone signing a contract — are you protected from something like this?
Although the standard contract provides for some protections if financing doesn't come through, they are very specific, and designed to allow the buyer to exit the contract, not to extend the time. There are different contracts used, so there may be additional items that can assist in this situation. Generally, though, without better wording on the closing date, the contract likely did require you to close by the 13th. More protective wording would have stated that the time "started ticking" when you were actually provided notice of the certificate of occupancy, and would also have given more than 10 days. Banks, like many service providers, are overwhelmed and understaffed. We always want to ensure the contract doesn't create an unnecessary hardship. The clause you had in this contract was not designed to protect your interests.
Keep in mind, every situation is unique, and you may have rights pursuant to the contract that could allow you to enforce it, or at least obtain your deposit back. In the meantime, if they ask you to sign a cancellation and release, I would recommend you seek legal counsel to determine your specific legal rights before doing so.
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney .com, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.