Legal Question in Real Estate Law in Arkansas
Contract termination due to disclosure
My husband and I signed a contract (pd earnest money) to purchase river front property based upon verbal statements by seller concerning non-flooding of property. These statements were made in front of the real estate agent representing buyer and seller. Four days later, a disclosure statement was faxed to us in which the seller circled FLOOD and stated that river front property had been under water. We called the real estate agent and complained and asked for our earnest money to be returned. Recently, the real estate agent called to let us know that he had sat in on a meeting between the seller and an attorney and the seller had refused to return earnest money, we are to be sued for breach of performance contract and expected to pay for property. How is this possible and what are our rights? Has precendence been set in any such case?
2 Answers from Attorneys
Re: Contract termination due to disclosure
Without seeing the documents you signed, it is difficult to advise you on your situation.
However, in general, you can obtain your earnest money back if the real estate that you made an offer on is not in the represented condition.
Additionally, it is unlikely that you can be forced to complete the real estate transaction (or face a breach of contract suit) unless you agreed to purchase the land "as is" and there was no assertion regarding the flooding issues by the seller. In fact, based on what you stated, it seems that the contract could be set aside on the basis of misrepresentation on the part of the seller.
The best advice I can give you is to begin to get everything in writing. Write a letter to the agent who heard the conversation about the property not flooding and lock him/her in on that conversation. It is likely that he/she will be a witness in the event you are sued.
Also, I am not sure if there is one or two agents involved here. If there is only one agent involved (representing the buyer and seller) I would be VERY VERY cautious on taking advice from him. First, he is not a lawyer and he has no place advising you on the contractual documents (e.g. telling you about the meeting he sat in on and implying how it relates to your matter). Secondly, a real estate agent is motivated by the sell (that is how they make money) and I would always advise to NEVER use an agent engaging in dual representation.
I am not sure I provided a lot of help, but maybe I got you on the right track. Seek the services of a qualified attorney in your area to help you out with this. Good luck.
Re: Contract termination due to disclosure
Any attorney would have to look at ALL your real estate documents to give you a valid opinion....
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