What, if any, liability does Fannie Mae have for cancelling a sales contract?
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What, if any, liability does Fannie Mae have for cancelling a sales contract?
We attempted to purchase a house from Fannie Mae with cash. Followed there guidelines for bidding, agreed to there finial offer, submitted earnest money. However, after our offer accepted and our check cashed, the sale was then cancelled. What liability do they have by contracting with something they could not deliver? In normal business, we have suffered a loss. We had a contract and there was not a contingency for what occurred. Should they be liable for our loss? Inspection fees, contractors’ time, our time?
Asked on March 23, 2011 under Real Estate Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
The answer to this question is based on why the sale was cancelled. If it was something that Fannie Mae did--for example, say that for some reason (whether negligence or deliberate), they sold the house to someone else and so couldn't sell it to you. In that case, they would very possibly be liable to you for your costs, though you'd have to sue to get the money (if they dont' voluntarily pay). However, suppose the sale was cancelled for some reason beyond their control--for example, the house burned down, so there was nothing to sell; or someone else came out of the woodwork with a legal claim to the house and Fannie had no way to previously know of it. If Fannie was not at fault, or if you were at fault (e.g. the sale was cancelled because you failed to meet some condition or requirement), then they would most likely not be liable.
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