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I had a purchase agreement for a house conditioned upon closing by a certain date. I was unable to close by that date and the purchase agreement was extended. During that time, the Seller agreed to let me occupy the property if I paid a $7,500 deposit to be credited toward the sales price of the house.
Now, after 2 months, an approval letter and setting a closing date, the lender has fallen through.
The Seller is livid. I am expecting to be served an Eviction Notice at any time. What are the laws concerning eviction in Louisiana in this circumstance.
Any help is appreciated.
It would depend somewhat upon how the agreement was written up.
In general, it is not a true eviction if you did not sign an actual rental contract. If you just signed an agreement to allow you to stay there until funding the loan, that is not the same and I don;t believe would give you the rights you have under a rental agreement. More than likely, they can show up at any time and demand you vacate immediately. Also, the 7500 may or may not be refundable depending upon how it was written up. Be very careful. If you try to extend or fight this, there mat be some negative consequences, particularly with the deposit. Seeing how you are the one in breach of contract I would try to work it out as best as quickly as possible and if there is not chance to buy the house, I would get out of there immediately.
The $7,500 is a lost cause, it was not refundable.
I just don't want them to show up and kick me out without any notice. I have already started looking for a new place, but nobody has anything to rent until the beginning of the year. I have been in constant contact with the Seller and he knows everything that has been going on during the loan process. The Seller even spoke to the loan consultant and was assured the loan would close before the deal went South.
I am a nervous wreck. It is not just me, I have a 5 year old to think about too.
If the lender is really at fault - making a committment to the loan and then backing out for no good reason - then the seller's rage is misdirected. He shouldn't be mad at you for circumstances beyond your control. Surely he must know that you were always acting in good faith, particularly since you gave him a fairly substantial deposit that probably represents several months' worth of mortgage payments.
What exactly was the reason that the lender gave for backing out on your deal? If it does not seem legitimate, then you might be able to seek compensation for your losses.
In the end, a lender is never required to follow through and fund a loan until you have closed and all parties have signed. Also, the lender would have probably recommended against moving into the home until closing even if an agreement had taken place specifically due to this situation. A loan commitment is always subject to both new revlations, and/or new policies or guidelines. Although the lender obviously screwed this up, I doubt their is any liability in it unless you have documents from the lender saying that you could go ahead and take posession of the property (which I am sure do not exist). In the end, it sucks, but that is the reality of this market. The banks are backing out on people, coming up with last minute changes, etc while leaving people in the lurch waiting to figure out their lives. In the end, that is why a house purchase should never be rushed or done to a deadline.
I say that having just recently bought a house and done the exact thing this person did...I moved in 2 weeks prior to close. It all worked out for us, but it was very stressful waiting for the final paperwork. I was not overly concerned as we were well within FHA guidelines and also qualified (and had a full file submitted to UW with an approval) for a different loan program.
@Anonymous wrote:It would depend somewhat upon how the agreement was written up.
In general, it is not a true eviction if you did not sign an actual rental contract. If you just signed an agreement to allow you to stay there until funding the loan, that is not the same and I don;t believe would give you the rights you have under a rental agreement. More than likely, they can show up at any time and demand you vacate immediately. Also, the 7500 may or may not be refundable depending upon how it was written up. Be very careful. If you try to extend or fight this, there mat be some negative consequences, particularly with the deposit. Seeing how you are the one in breach of contract I would try to work it out as best as quickly as possible and if there is not chance to buy the house, I would get out of there immediately.
If the agreement to move in was a signed agreement there would be some protection. If it was just an under the table "sgreement" to move in prior to the already mentioned purchase agreement, or it was actually an addendum on the closing papaerwork, once it falls out of escrow there is no framework to stay. You are not a tenant in those situations, but a buyer with an agreement to take possesion of the property early. Tenant laws would not apply I don't believe. Even more so since I saw no listing of him paying rent, just the deposit. Although it is in way rent, the deposit was taken when the contract was defualted upon. In the end, no matter what, you are best to just try to work it out amicably with the seller.
@Anonymous wrote:If the agreement to move in was a signed agreement there would be some protection. If it was just an under the table "sgreement" to move in prior to the already mentioned purchase agreement, or it was actually an addendum on the closing papaerwork, once it falls out of escrow there is no framework to stay. You are not a tenant in those situations, but a buyer with an agreement to take possesion of the property early. Tenant laws would not apply I don't believe. Even more so since I saw no listing of him paying rent, just the deposit. Although it is in way rent, the deposit was taken when the contract was defualted upon. In the end, no matter what, you are best to just try to work it out amicably with the seller.
Thanks everyone for all the great advice. I have been dealing with the Seller's attorney and seem to have worked thing our with them. I will be able to stay in the house until the end of the year and sign a 6-Month lease until I can obtain financing. I forwarded all communication with the Lender to the Seller to make sure that he knew that I was not stringing him along and that it was the Lender and not me.
I think the fact that the market is so slow helped me. There is no way that they can get a buyer for the property in this market in less than 8 months.