Q: After months of searching, my husband and I finally found the perfect house - a beautifully restored nineteenth century Victorian. Three weeks before the closing date, some old wiring started a fire in the walls of the kitchen and the entire house was destroyed. Obviously, we no longer wish to buy the house. When we asked the seller to return our deposit, he refused. Do we have a right to back out of the contract and get our deposit back? (120 Conn. 390)

• Most real estate contracts have a provision relating to the destruction of a home prior to its sale. In some provisions, the contract will state that the buyer has the option to take an assignment of the insurance proceeds and close on the property or can cancel the purchase.

• In most states, including Connecticut, the unintentional destruction of a piece of property in the process of being sold will excuse the buyer from the contract and will obligate the seller to return the buyer's deposit.

Q: Six months ago, I signed a listing agreement with a broker that set his commission at four percent of the final sale price of my house. The broker found an interested buyer, but the sale never materialized. We signed a sales agreement and set a closing date, but I decided not to go through with the deal because I found another buyer who was willing to pay a little bit more. My broker claims that he is still entitled to his commission even though I ended up selling to someone that I found without his help. I don't owe him anything, do I? (31 Conn. App. 608)

• Whether or not you owe your broker anything depends on what your listing agreement said. If the listing agreement said that the broker was entitled to a commission so long as he produced a buyer who was ready, willing, and financially able to purchase the house, he is entitled to his four percent. The fact that you rejected his buyer in favor of one that you found is immaterial.

• The broker is also entitled to his commission as long as the listing agreement conditioned the commission upon the sale of the property (and not exclusively upon the sale of the property to a buyer procured by the broker).

Q: I'm buying a house and have already signed the sales contract. The closing date is only two weeks away and the seller hasn't moved out yet. I'm worried I'm not going to be able to move in on the date that the seller told me I could. What are my rights?

• The best thing to do at this point is to contact the seller to find out what her plans are. If she says she is still planning on moving out on or before the closing date, you may want to arrange to do a pre-closing walk-through of the property during the next couple of days. At the walk-through you can verify that the seller is in some stage of the moving process. If you do a walk-through close to the closing date and find that the seller has not even begun to pack, you and your attorney can take steps to delay the closing date.

• Similar measures should be taken if, upon questioning, the seller admits that she will not be moving out before the original closing date. If the seller's refusal to move out before the closing date causes you to incur significant additional expenses, you may have to take her to court to get her to reimburse you unless you had a prior written agreement with the her that allows you to retain a portion of the purchase price to cover such expenses.

• Some states have laws that automatically force a seller to pay a significant penalty for each day that the seller remains on the property after the closing date.

Q: I was so excited to move into my new house, but the seller moved out and left me a huge mess! I had to hire a team of professional cleaners to shampoo the carpets and get rid of all the trash that the seller left behind. Now he is refusing to reimburse me for this expense, & I feel angry and betrayed. What should I do?

• To determine whether or not you have the right to sue the seller to recover money that you spent cleaning up the house after she moved out, you will need to consult the sales contract as well as a real estate attorney.

• A well-drafted sales contract will typically contain a provision that allows the buyer to retain a portion of the purchase price to cover the cost of cleanup in a situation like this. It is also possible that as a condition of purchase, you or your attorney required the seller to put a substantial amount of money in a special holding account to cover unforeseen expenses like these.

• You might have avoided this problem by doing a pre-closing walk-through of the house. If conducted just a few days before closing, it probably would have given you a good idea of the state in which the seller was planning to leave the house. Knowing this, you and your attorney could have taken proactive steps to resolve the matter.

Q: Last year, I sold my house to a business associate. In the residential property condition disclosure report, I indicated that there were no problems with the foundation, there were no problems with the plumbing system, there was no water damage to the house, and that there were no termite or insect infestation problems. To the best of my knowledge, this was all true at the time I sold the house. Some time after moving in, the buyer discovered a small amount of termite damage in a crawl space under the stairs. Now she is threatening to sue me if I don't pay for the damage to the house. But I never intentionally misled the buyer in any way! I was as surprised as she was to learn of the termite damage. Does she have a case against me? (2006 Conn. Super. LEXIS 1314)

• Obviously, Connecticut and most other states have laws that prohibit sellers from making intentional misrepresentations to potential buyers about the condition of their property. But here with have something a little different. In this case, the seller is insisting that he did not deliberately mislead the buyer in any way and that he had no idea that he was selling a house with a termite problem. Unfortunately, this may not be enough to excuse the seller from liability.

• In some states including Connecticut, a seller must pay for any damage created by an existing unknown defect (such as a termite infestation) if he denies the existence of the defect but fails to disclose information that could or should have been disclosed to the buyer and would have alerted the buyer to the problem. If the seller in this case knew the house had a crawl space but failed to reveal this to the buyer, he will probably be required to compensate the buyer for any damage hidden within the crawl space.

Q: My son wants to build a house, and he found a large piece of wooded property in a neighboring town that seemed like the perfect location. His attorney did a title search and everything checked out. Then, last week, my son was walking the property and discovered that a guest house on one of the neighbor's property appears to be straddling the two properties' boundary line. My son wants out of the deal but the seller is refusing to give back his security deposit and claims that my son has to go through with the purchase because they signed a contract. The contract doesn't say anything about what happens in a case like this. What should my son do?

• A buyer cannot be compelled to purchase a piece of property that is subject to a boundary dispute or any other matter that might require legal action in order to settle. In this case, the seller is trying to force the buyer to purchase property that he cannot fully use and enjoy without first going through the painful process of getting the neighbors to tear down or move their guest house or making some other arrangements for it to remain. The seller has no legal right to do this.

• In Connecticut, if a buyer encounters problems in establishing clear title to the property, he or she can elect not to purchase the property. In this case, the buyer has the right to back out of the agreement and has a right to get his deposit money back.

Disclaimer: The questions and answers contained in this document are intended to give a general and simplified view of real estate law in Connecticut as well as other jurisdictions and should not be relied upon as legal advice. To determine your own legal rights, consult with an attorney.
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