 Dear George: A title company refuses to release earnest money to me more than 60 days after I asked for it in writing. The company contends that it needs a release letter signed by both parties. The other party to this residential TREC contract has not made written demand for the money and is ignoring the release letter. From reading Paragraph 18 of the contract, it is clear to me that the title company should release the funds after 15 days and that if they comply with the directions stated in the paragraph then both parties release them from any liability. At this point, I am ready to take the other party to small-claims court and get a court order to persuade the title company to release the funds. However, I would much rather have the title company comply with the contract. What legal recourse can I take against the title company for wrongly withholding funds?
Answer: None that you could win. Yes, it would appear according to Paragraph 18 that the escrow agent at your title company is wrongfully withholding the return of your earnest money, but that is a mistake frequently made by buyers and sellers dealing with failed transactions. The pertinent language in Paragraph 18 states, "If escrow agent does not receive written objection to the demand from the other party within 15 days, escrow agent may disburse the earnest money to the party making demand ... ." It says that the escrow agent "may" disburse the earnest money—not "must" or "shall." It's entirely up to the escrow agent as to whether he disburses the funds. However, also read Paragraph 18D in that same section. You may be able to persuade the other party to sign the release letter rather than risk treble damages. If not, small-claims court may be your best option.
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Dear George: I just learned that the house I purchased in 2004 suffered flood damage in in June 2001. This is the first I've heard of any flooding, as the seller indicated that there was not any previous flooding on his disclosure notice. However, the person who sold me the home only owned it from 2002 to 2004, so it's possible the previous seller failed to disclose the flood damage to him. I really just want to know what was damaged and how it was repaired. My immediate concern is that anything not repaired may cause further damage that necessitate future repairs. When I sell the property, I will disclose there was prior flood damage but will not be able to state any details. This type of vague disclosure is bound to affect my property value, and I'd like to learn more about the flooding. How should I proceed?
Answer: When you sell, disclose what you know. Include information about how you came to discover the existence of flood damage and any documents you have. Contact both previous owners and inform them that you know about the flood damage and that it was not reported by either owner. Perhaps the owner from whom you bought the property did not know about the flood damage or maybe he did. At this point, you don't know. However, the owner from whom you bought the property may be able to provide contact information for the previous owner. Whatever information you learn, make a written record of it and include it in your disclosure when you sell your property.
Dear George: We bought a house in September 2006, but our insurance company would not insure the house due to a damaged roof. The seller paid the deductible to have the roof replaced, and the company then insured the home. We have since discovered that the skylights leak, possibly due to the way the roof was replaced. The insurance company said they are not responsible; our home warranty company won't cover it; and the roofer has gone out of business and is unreachable. Who is responsible for fixing the roof? I really don't think I should be responsible to pay for this, because I am not the one who did the work, nor am I the one who hired the roofer and I had no say as to who was hired.
Answer: Assuming that the seller hired the roofing company to repair the roof because you either would not or could not close the purchase without the proper hazard insurance on the property, the roofing company is the first entity you should look to. Now, if you purchased the home under a written contract and the seller hired a company that did not regularly make roof repairs or knew that the company had a questionable reputation, you might have a case. However, even if you win in court, the seller may not have any money to pay for repairs. What you should do is hire a reputable roofer to make the needed repairs. Whether or not you litigate is a decision you'll have to make. Sometimes, it's less costly to make the repairs and move on with your life.
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