Mortgage Contingency - Lawyer Mistakes --HELP PLEASE!!!

[wrl03]

I have a contract of sale for the sale of my condo. My lawyer made mistakes on the contract and failed to enter a mortgage contingency "comittment date" and entered the wrong amount that the buyer had to obtain a mortgage for. The offer from the buyer was for a 70% mortgage. The contract was written to show a 90% mortgage which raised the bar even more for the buyer to obtain a mortgage. All of this was done after extensive discussions between myself and my lawyer prior to contract signing. I signed the contract after asking my lawyer if these major items were in the contract.

After the contract was signed, I was told by my lawyer that the buyer recieved a mortgage and wanted to close early because interest rate lock would expire. To complicate the matter, I moved from my condo to accomodate the request by the buyer's attorney to close early and incurred additional expenses to do so (temporary housing and storage unit). I was advised by my lawyer to do this since the contract was firm based on the other lawyers scheduling of a closing date.

The buyer has now backed out of the deal (after originally stating that they recieved a mortgage, but never producing a written commitment letter). my lawyer was told teh buyer woudl be able to get a mortgage but it was a few days away. The buyer then stated after 3weeks of silence (no return calls from buyer's attorney) that they could not get a mortgage.


I feel that due to the buyer's actions, it is justified to keep a portion of the downpayment to recover my losses. However, I fear that contract can not be enforced due to my lawyer's mistakes. I have little confidence in his abilities and am in dire need of advice.

Do I have any chance in recovering my costs through holding the downpayment? any other options either through "lawyer malpractice" or other? Any advice would be greatly appreciated.

 

[calalily]

The contract should state whether the downpayment is forfeited (all or partial) if buyer backs out. If it does not say that it is forfeited then you cannot keep it. You signed it, so your lawyer is only partly responsible for the mistakes. Never sign anything unless you read it thoroughly. You read everything for exactly the reasons as to what happened to you..ie the mistakes. You would have caught the mistakes if read. If the contract was not what was agreed upon by you and the buyer, then the buyer can back out and should not be penalized. Live and learn and use a different lawyer in the future.

 

[wrl03]

I think you are partially right having actually lived through this debacle.

Also, is a verbal agreement binding? I was given advice by my lawyer that it was safe to move out (and even bid on a new home) based only on a verbal commitment from the buyer that they had recieved their mortgage (and satisfied teh mortgage commitment clause in teh contract). Is this verbal committment binding as my lawyer suggested it was by advising me it was safe to move?

i questioned this advice early on and having been through this wish I trusted my instinct. However, that is what I trusted my lawyer for. He is supposed to know the law.