Buyer wants to back out of the contract to buy land
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Buyer wants to back out of the contract to buy land
The buyer and I both signed the contract to sale and him to buy the land, I was required to get a survey and perk test which I did the he ask for a 30 day extinction which I agreed on then 5 days before the close he says he wants out after I have done every thing he ask at my expense. What is the law?
Asked on August 25, 2018 under Real Estate Law, Arkansas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
If there was no contingency in the contract allowing him out at this stage, he is obligated to the contract. He has no legal defense to his contractual obligation for his simply wanting out; he needs a contingency, or to be able to prove that you committed fraud or violated your obligations, to get out of the contract without a penalty.
In the typical contract, if there was a deposit or earnest money, you get to keep the deposit when the buyer refuses to go through with the sale. If there was no deposit, you can sue him for your costs and losses. That would be your survey and perk test costs, and the "carrying costs" for the additional time you have to now hold onto and pay for the land until you reasonably could be expected to sell it. (E.g. you took if off the market when you and he signed the contract; it's been off the market for 3 months; your monthly carrying costs--taxes and anything else you need to pay on the land--is $500/month; therefore, a 3 month loss of marketing the land cost you $1,500, which you could seek.)
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