Comments by "SmallSpoonBrigade" (@SmallSpoonBrigade) on "Builder Legally Cancels Home Sale Six Days Before Closing" video.

  1. They do, the issue is that unconscionable is pretty extreme and a lot harder to get done that people typically think.
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  2. IANAL, but that clause should be removed by a judge with the remaining contract intact as its inclusion would otherwise render the entire contract void. In order for a contract to be valid, there typically needs to be an exchange of benefits. In this case, that clause being exercised merely because the builder thinks it can make more money means that the prospective buyer did not receive any benefit from the contract. We'll have to see how the actual court case goes, but with the funniness with the moved closing date and the forced sale of the house, there's almost certainly some sort of cause of action and the attorney should be able to get an injunction barring the sale of the house to anybody else until the legal issues are resolved. I would expect that any competent judge would rule that the clause isn't enforceable, but the rest of the contract is and the closing must go forward, but it is Texas where the judiciary has a reputation for being procorporate, so who knows.
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  3. My dad used to be a small scale developer, he'd build one home at a time and manage things himself. Having a buyer on the hook for buying the completed home makes it a lot easier to get financing for the project, as the bank knows that the house will sell within a reasonable time of the expected closing date at or near the agreed upon price. This means that the bank knows that the contractor is going to have the money to pay back the loan. They may be willing to offer better financing options for the developer or financing when they might not otherwise be willing due to saturation of the market or having other developers that they could be loaning money to. It wouldn't surprise me if there was 3rd party interference, prompting the forced sale of the original home and the subsequent termination of the contract.
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  4. You can do that, the issue is that you're stuck getting the mortgage at the beginning of the process and if you're paying a mortgage, or rent, on the place you're currently living, that can be unaffordable.
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  5.  @GeorgeWashingtonLaserMusket  That's definitely possible, this is why you'd want an attorney to go through the contract, and to make sure that you've got the cash, and a loan large enough to cover it. You'd also want to be mindful about the terms of the loan, because if the bank can modify the limits or call it, you can also wind up having to give up the property.
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  6. If I were the attorney for the buyer, I'd be looking very closely at why the contract went south after the original closing date. They knew that the housing market had heated up, and probably before the forced sale of the previous residence. So, they could have cancelled it prior to the closing date, I'd want to know why they cancelled after the closing date, because if there's any 3rd party involved, that 3rd party could well be on the hook for the consequences, and damages, of the contract breaking up, even if the builder's waivers are ruled enforceable. That being said, don't sign a contract where you're not comfortable with clauses being exercised without specific triggers you have control over, and preferably, not if there are clauses that you wouldn't be comfortable with in general. And definitely get an attorney to go through things any time the amount of money starts to become uncomfortably large, especially for property.
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  7.  @-yeme-  Yes, but the state already says that you can't have contracts that benefit just one party. It's part of why you can't legally sign yourself into indentured servitude or sign a contract to give somebody your car at some future time. Both situations would give all the benefit to one side. And in terms of indentured servitude, that would also violate that person's constitutional rights as well.
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  8. This is good legal advice, it's a bad idea to count on getting a judge to overturn the terms of a contract. There may not be sufficient grounds to do so, or you may simply find a judge that is less likely to do so and the appellate court might say no. In either case, you're out of pocket thousands of dollars just to get that no. That being said, given the facts of the case, those waivers shouldn't be sufficient to get the builder off the hook. Forcing the sale of their previous home, moving the closing date and canceling is far more than simply the builder's convenience, at least to most normal people. Without forcing the sale, the builder probably would be able to cancel the contract, but I'd be very curious myself about what prompted the closing date to be pushed back and there may well be a 3rd party that could be sued for interfering with the contract who isn't covered by the liability waivers with the prospective buyer. Because if they just thought they'd be able to get more money in the abstract, they probably would have canceled the contract prior to the contracted closing date. If they pushed the date back and then cancelled after the original closing date, that implies that there may have been some negotiations or shopping around of the property going on. Obviously, there are other possible reasons, but I'm sure a good attorney would be getting papers to cover whatever communications were going on with respect to the property.
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  9. Does this mean that the buyer can cancel at any time as well? Because if you can't also back out as well, that's likely unenforceable. You can't normally have terms that are benefitting only one party.
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  10. IANAL, but courts tend to defer to what's on the paper alone, without considerations for external factors as there's no way of knowing about that. But, given the circumstances involved here, the missed closing date and the cancellation made after forcing the sale of the previous house and days before the new closing date; I'd wager that there's grounds to suspect 3rd party interference. The market has not changed that much in just those few weeks to warrant the builder expecting significantly more money for exercising that clause. Going through discovery based on those weird behaviors by the builder might well reveal 3rd part interference that would not be covered by the contract. The screwed over buyers might well not be able to sue the builder, but if there was a 3rd party interfering, that party does not have a waiver with the buyer, and would be potentially liable for any damages that occured if they did indeed induce the builder to terminate the contract. Obviously, we wouldn't know whether or not that's the case, but given how important it was for the builder to have this family close and then at the last minute to feel equally strongly that they not move in, after changing the closing date, something may be going on that isn't covered in the contract.
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  11.  @LC-uh8if  Fair point, although I'd point out that unless judges are going along with it, it doesn't much matter as it's not material.
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