Expert: Lisa Webber - 8/23/2008

Question
QUESTION: My parents signed a contract to move into a house the guy call them and came to their house i was there he went over the contract cross things out they all three signed the contract and the man took 800.00 for security deposits now 8 days later he call them and told them that his partner is backing out so now they cant move my question is if my parents sign the contract and so did he the realtor and i signed as a witness and he accepted 800.00 can he back out now they already told their present landlord that they are moving isn't this against the law were not the type to sue but i am really upset the guy sat in front of us showed them and i the place and told them it was a done deal and then call back 8 days later im thinking court please give us advice?

ANSWER: Was the contract to purchase the home?  Legally once you are in a contract of sale you can't just "back out".  There will be contingencies in place in the contract to protect the buyer; for example if they cannot get a loan or satisfactory home inspection they don't have to purchase the home.

On the sellers side, they legally can't just change their mind and it sounds like that is what they did.  

There are a couple of variables that I don't know.  Is the home in the name of both people, the one that signed the contract as well as the "partner"?  If the house is in both names and only one person has signed the contract, then it is not fully executed as both owners have to sign the contract.  

If both owners signed the contract and accepted the earnest money, then yes, they are obligated to sell the house and can't just change their minds.  Do you have the right to sue them for performance?  Maybe.  Some contracts are worded so that you are bound to go through arbitration or mediation.  You'll want to read over the contract and consult with a real estate attorney.

As you are considering a lawsuit, you have to ask yourself if it's worth it.  It will take awhile to get through the court system and you'll need to hire an attorney.  I'm assuming your parents gave 30 days notice.  You won't get through the court system that quickly.  The other thing to consider is a judge may or may not uphold the contract.  I'm not a lawyer so I cannot give you legal advice, but if you would like more information about this option, I would advise you to consult with a real estate attorney.  

You used the term "security deposit".  Are your parents planning on renting the house?  If so, you'd want to consult a real estate attorney in that case as I am not familiar with tenant/landlord law as it concerns a lease agreement broken by the prospective landlord.  If this is a rental situation, it would probably not be a good idea to force the issue if they have changed their mind as you want your parents to have a good relationship with their future landlord.

I understand you are angry about the situation as it is totally unfair to your parents.  In the long term, if I were in your position, I would look for other options that would be suitable for your parents.  I'm not sure what area of the country you are in, but here in Maryland, there are many properties available for sale as well as many rental properties and there seems to be several good choices available in each area for the buyers and renters that we work with.  It would save you a lot of time and money to pursue other options for them rather than try to fight these guys in court.  

If this is a rental situation, you can find a Realtor that helps people find rental homes and they will take your parents around to the available homes in the area that are in the multiple list system and help them find another home.  In most cases people can move into a rental home in about a week after finding the one they would like so if your parents have given their 30 days notice and they are 8 days in, they still have plenty of time to find another home.

That's just some food for thought for you.  Yes, technically you can sue, but you'll want to ask yourself if it's really worth the money and aggravation to maybe or maybe not get the outcome that you desire.

I hope this helps as you're helping your parents get through this situation.  Good luck to you!

---------- FOLLOW-UP ----------

QUESTION: My parents were going to rent the house until they could come up with a down payment and the guy knew that because the house wasnt saling so the guy pursued them he lied and he doesnt feel sorry for that please help us out

Answer
This is a situation that is out of the expertise of a Real Estate Agent as we are not permitted to practice law.  I'm not legally able to give you advise as far as law is concerned.

In this situation you'll want to consult a real estate attorney to see what your options are.  A real estate attorney is well-versed in real estate law and can read over your contract and advise you on what step(s) to take next.  A real estate attorney can also represent you in court against the prospective landlord/seller.  

Good luck to you!