Two weeks ago, my partner (in my title insurance business) closed a complicated transaction. The contract between the sellers (two older wealthy gentlemen) was selling inherited multiple acres of land to a development company. The land was raw ground.
The development business around here is quite brisk, and land values are escalting rapidly.
The contract is about two years old, it has many addendums extending the closing date which was pending for re-zoning of the ground. On one of the addendums, the sellers agreed that numerious shares of water would be included in the sales price, and some of the water could be purchased for $2,500.00 a share if the buyer wanted them.
The last addendum dated sometime in August '06 extended the contract to 12-30-2006. The sellers then decided to delay the closing for tax purposes until Jan 17, '07. They (I suppose the buyers) created an addendum to extend the contract, but never bothered to get it signed.
Well, my partner closed the deal a couple weeks ago, by this time the file had grown into a morass. He misread the language about the water, and charged the buyer for all the shares of water, the buyers had decided they wanted all of them. The closing statement charged the buyer about $185,000 for the water when it should have been $60,000. When the statements were sent out for review, both the buyer and the sellers did not catch the mistake.
Monday, this week, My partner got a call from the buyer saying they were reviewing the contract, and that they were over chargerd for the land and water. The total sales price was over $4,000,000.00. Well my partner was leaving for Hawaii later that day. He called the seller to discuss the problem then left for the islands, promissing me that he thought he could get it worked out over the phone.
Well, and you can guess, (if your still reading this bible) no such luck.
The buyers set a meeting today with the sellers at my office. I was only aware of the deal when the problem was discovered.
At the meeting, the buyers addressed the sellers about getting their money back for the overpaid water. The sellers response was classic. He acknowledged the facts, but said it didn't matter because the contract was void. He said the closng didn't occur on or before the 30th of December. He said the closing statements represented the new contract and more or less said go to he!!.
In Utah escrow matters are under my underwriter, and I will have to place a claim for the buyers.
I am sitting here tonight wondering what the he!! happened to honesty in todays society.
Anyone have any thoughts on what I should do other than call my atty in the morning?
Spud
The development business around here is quite brisk, and land values are escalting rapidly.
The contract is about two years old, it has many addendums extending the closing date which was pending for re-zoning of the ground. On one of the addendums, the sellers agreed that numerious shares of water would be included in the sales price, and some of the water could be purchased for $2,500.00 a share if the buyer wanted them.
The last addendum dated sometime in August '06 extended the contract to 12-30-2006. The sellers then decided to delay the closing for tax purposes until Jan 17, '07. They (I suppose the buyers) created an addendum to extend the contract, but never bothered to get it signed.
Well, my partner closed the deal a couple weeks ago, by this time the file had grown into a morass. He misread the language about the water, and charged the buyer for all the shares of water, the buyers had decided they wanted all of them. The closing statement charged the buyer about $185,000 for the water when it should have been $60,000. When the statements were sent out for review, both the buyer and the sellers did not catch the mistake.
Monday, this week, My partner got a call from the buyer saying they were reviewing the contract, and that they were over chargerd for the land and water. The total sales price was over $4,000,000.00. Well my partner was leaving for Hawaii later that day. He called the seller to discuss the problem then left for the islands, promissing me that he thought he could get it worked out over the phone.
Well, and you can guess, (if your still reading this bible) no such luck.
The buyers set a meeting today with the sellers at my office. I was only aware of the deal when the problem was discovered.
At the meeting, the buyers addressed the sellers about getting their money back for the overpaid water. The sellers response was classic. He acknowledged the facts, but said it didn't matter because the contract was void. He said the closng didn't occur on or before the 30th of December. He said the closing statements represented the new contract and more or less said go to he!!.
In Utah escrow matters are under my underwriter, and I will have to place a claim for the buyers.
I am sitting here tonight wondering what the he!! happened to honesty in todays society.
Anyone have any thoughts on what I should do other than call my atty in the morning?
Spud
