Liability for failure to purchase
August 1, 2013 9:47 AM Subscribe
If I, as condo board president, meet with a buyer who is in contract and answer the buyer's questions honestly, am I liable and open to a lawsuit from the owner if the buyer decides to cancel?
I own an apt in a condo complex in Brooklyn, NY. The people that built the building (sponsors) still own a unit in the building. They have a buyer that is supposed to close this week. The buyer contacted me and wants to ask questions about the building and some leaks they found that caused dry wall damage in the apartment and some of the common areas. If I meet them and answer all of their questions honestly (the building does have some problems but we are working on them, however the Sponsors were lazy, cheap and careless in the construction of the building) am I open to a lawsuit from the sponsors if the buyers decide not to close because of things I said?
I own an apt in a condo complex in Brooklyn, NY. The people that built the building (sponsors) still own a unit in the building. They have a buyer that is supposed to close this week. The buyer contacted me and wants to ask questions about the building and some leaks they found that caused dry wall damage in the apartment and some of the common areas. If I meet them and answer all of their questions honestly (the building does have some problems but we are working on them, however the Sponsors were lazy, cheap and careless in the construction of the building) am I open to a lawsuit from the sponsors if the buyers decide not to close because of things I said?
An equally important question would be would you be liable to the buyer if you don't disclose? I am not a lawyer and I would actually get one in this case.
I would either not meet the buyer or if I did, I would answer honestly without the editorializing such as the sponsors are lazy and cheap. Stick to the facts. Yes, there have been some leaks. Yes they are being addressed.
posted by JohnnyGunn at 10:24 AM on August 1, 2013 [1 favorite]
I would either not meet the buyer or if I did, I would answer honestly without the editorializing such as the sponsors are lazy and cheap. Stick to the facts. Yes, there have been some leaks. Yes they are being addressed.
posted by JohnnyGunn at 10:24 AM on August 1, 2013 [1 favorite]
Yeah, if this is not a hypothetical, ask a real lawyer in your jurisdiction.
posted by mibo at 10:24 AM on August 1, 2013
posted by mibo at 10:24 AM on August 1, 2013
I would consult a lawyer. The lawyer that handled your closing should be able to answer this in a NY minute (sorry, couldn't resist).
posted by bedhead at 10:24 AM on August 1, 2013
posted by bedhead at 10:24 AM on August 1, 2013
IANAL so take this advice with a grain of salt.
All purchase contracts I have ever seen have a non-disclosure clause. For example if the buyer states the house has never had termites. #1 When in fact the house had termites several years ago, was treated and now doesn't have termites. The sale can be cancelled because of the untruthfulness of the seller.
From what I understand of the disclosure laws. If the purchaser asks you a question about the roof leak and you answer untruthfully, you can be sued at a later date for failure to disclose. If the purchaser asks a question about the roof leak and you reply with the facts (leave out your own opinion of the lazy, cheap, carelessness) and the purchaser decides not to continue with the sale based on your factual answers, you can not be held liable.
posted by JujuB at 10:29 AM on August 1, 2013
All purchase contracts I have ever seen have a non-disclosure clause. For example if the buyer states the house has never had termites. #1 When in fact the house had termites several years ago, was treated and now doesn't have termites. The sale can be cancelled because of the untruthfulness of the seller.
From what I understand of the disclosure laws. If the purchaser asks you a question about the roof leak and you answer untruthfully, you can be sued at a later date for failure to disclose. If the purchaser asks a question about the roof leak and you reply with the facts (leave out your own opinion of the lazy, cheap, carelessness) and the purchaser decides not to continue with the sale based on your factual answers, you can not be held liable.
posted by JujuB at 10:29 AM on August 1, 2013
Lawyer, lawyer, lawyer.
The sellers should have disclosed, but don't open your mouth without having consulted a lawyer.
posted by Ruthless Bunny at 10:30 AM on August 1, 2013 [1 favorite]
The sellers should have disclosed, but don't open your mouth without having consulted a lawyer.
posted by Ruthless Bunny at 10:30 AM on August 1, 2013 [1 favorite]
Your condo association should already be working with a lawyer on the sale, and he/she should be handling this.
posted by mkultra at 10:32 AM on August 1, 2013
posted by mkultra at 10:32 AM on August 1, 2013
You really need to speak with an attorney about this. Or simply decline to answer the prospective buyer's questions.
posted by dfriedman at 10:32 AM on August 1, 2013
posted by dfriedman at 10:32 AM on August 1, 2013
Just had a thought, what about the "Due Dilligence" peroid? The buyer has a certain amount of time to gather just this type of info.
Technically, the buyer is locked into buying unless his "Due Dilligence" period runs up until the closing date (mine was 10 days after contract.)
posted by Ruthless Bunny at 10:33 AM on August 1, 2013
Technically, the buyer is locked into buying unless his "Due Dilligence" period runs up until the closing date (mine was 10 days after contract.)
posted by Ruthless Bunny at 10:33 AM on August 1, 2013
assuming that you already talked to the buyers, I wouldn't pay a lawyer since it is only a hypothetical problem at this point. (the buyers may proceed, they may not say why they dropped out, the sponsor may not care to sue)
IANAL but rule of thumb anyone can sue you for any reason. it is possible that the condo insurance could cover your defense if you were acting in your role as condo president. (you would have to demonstrate that) However, it is does come a suit your best defense is if your information was accurate and factual (not opinion). So "there is a leak and plan to fix it" is factual and accurate. There is also a continuum in expressing your honest opinion.
"it takes several weeks to get a response to xyz" is a fact.
"they are slow to respond to problems" ("slow" is a judgement - moving a little into opinion)
" it feels like they don't really care" opinion, (negative opinion, but at least you are owning that it is your feeling)
"sponsor is lazy, cheap and careless" (sounds like a hostile attack - thin - hoping you didn't actually use those words)
Closer you stick the facts, the safer you are. (did I say IANAL?)
posted by metahawk at 10:41 AM on August 1, 2013
IANAL but rule of thumb anyone can sue you for any reason. it is possible that the condo insurance could cover your defense if you were acting in your role as condo president. (you would have to demonstrate that) However, it is does come a suit your best defense is if your information was accurate and factual (not opinion). So "there is a leak and plan to fix it" is factual and accurate. There is also a continuum in expressing your honest opinion.
"it takes several weeks to get a response to xyz" is a fact.
"they are slow to respond to problems" ("slow" is a judgement - moving a little into opinion)
" it feels like they don't really care" opinion, (negative opinion, but at least you are owning that it is your feeling)
"sponsor is lazy, cheap and careless" (sounds like a hostile attack - thin - hoping you didn't actually use those words)
Closer you stick the facts, the safer you are. (did I say IANAL?)
posted by metahawk at 10:41 AM on August 1, 2013
Response by poster: yeah i did not use any inflammatory or denigratory language in my initial (accidental) discussion with them. I was coming home, they were here, we talked. They have now followed up and want to talk again, which is when I started thinking maybe I should talk to a lawyer first.
posted by spicynuts at 10:48 AM on August 1, 2013
posted by spicynuts at 10:48 AM on August 1, 2013
(I am not a lawyer and this is not legal advice.) Yes, definitely speak to a lawyer. Consultation is relatively inexpensive; litigation can be tremendously expensive.
posted by Handstand Devil at 11:47 AM on August 1, 2013
posted by Handstand Devil at 11:47 AM on August 1, 2013
your condo board has an attorney that you use for occasional board business, right? give them a call.
posted by fingersandtoes at 12:11 PM on August 1, 2013 [2 favorites]
posted by fingersandtoes at 12:11 PM on August 1, 2013 [2 favorites]
Another voice in agreement with the above: this is tricky enough that you want to talk to a lawyer to advise the board about the particulars of your building and these buyers' questions vs. your duty to the current owners, as pertains to whatever disclosures you may or may not be required to make regarding the particular unit in question, plus the common areas. This is fact specific stuff, and a bit slippery even if not super-complex. My sense is that it's worth paying for an hour or two of advice here. FWIW, I live in a condo building that draws prospective owners with similar concerns, and I have always referred them to the HOA.
posted by snuffleupagus at 9:05 PM on August 1, 2013
posted by snuffleupagus at 9:05 PM on August 1, 2013
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posted by theora55 at 10:23 AM on August 1, 2013