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kathrynepost

refund on deposit due to builder default

3 years ago

Can someone please provide ways their construction lawyer helped get their earnest money/deposit back if the builder breached contract but refuses to pay?

Comments (32)

  • PRO
    3 years ago

    Anyone else's experience may not be applicable to your situation. Talk to your construction attorney..

  • PRO
    3 years ago

    If you can't get a lawyer to work on a contingency fee, kiss your money goodbye now instead of later.

  • PRO
    3 years ago

    I'm not an attorney and I didn't stay at a Holiday Inn Express last night. That said, I suggest you give your state's board for contractors a call and investigate their process for filing a complaint against the contractor. Here in Virginia, the contractor's board can compel contractors to make refunds and can impose penalties up to and including terminating their state contractor's license.

  • 3 years ago

    Charles Ross: Usually PRO avoid mentioning where it’s really hurts, even when giving advice to the innocent. Thanks for your honesty, may God bless your business.

    Joseph: This rule should be written in gold letters.

  • 3 years ago

    Certainly attorneys are expensive, but an attorney on contingency is the most expensive in both time and money. I recommend a consultation with a local attorney, these are usually rather inexpensive. Now, whether you want a construction attorney or a real estate attorney is debatable.


    Some of this will depend on whether you have a custom or production builder. Going to the the state board for contractors will be great if you have a custom (build on your lot) builder, and likely less effective if it is a tract builder (they build the house on their lot and you buy the finished house). Tract builders are essentially a purchase agreement for a home, much like an existing home and are governed by different rules as it is their house until you buy it.

    Tract builders typically have pretty tight contracts, this doesn't mean you can't get out of the contract, but you may have more luck convincing them to release you rather than forcing them release you. Your best bet is to take the contract to an attorney who has been successful against them in the past and let them advise you.

    Good luck

  • PRO
    3 years ago

    An attorney on contingency is gambling with his time/money, not yours. That makes them pick winners.

  • 3 years ago

    How much was the deposit? Do you own the land or is your investment solely the deposit?

  • PRO
    3 years ago

    Assuming you don't own the land but are purchasing a home under construction. In my state this is usually a real estate transaction.


    Call their bluff.


    Send a certified letter requesting full refund of all deposits & cancelation of your agreement to purchase this home upon completion due to flaws that have not been remedied, due to medical risk, etc.


    Got to start somewhere.


    Most builders will want to move on quickly.


    Alternate step is to retain an attorney which I would recommend if your deposit is worth recovery.

  • 3 years ago

    An attorney on contingency is gambling with his time/money, not yours. That makes them pick winners.


    No it doesn't. I understand why you might believe this, but it is well researched and is simply not true. Attorneys who work on contingency tend to take on more clients/cases (not fewer), settle for less money, and make more profit.

    It is just a numbers game. Sue 100 companies for $100,000 and 70 of them will hand you $10,000 to go away. The attorney takes 40% plus expenses and you get $5,000. Which is great if your case was a dog... and terrible if you actually had a chance at winning.

    The poor tax is real. There are not many times where it is cheaper to buy something you can't afford. Whether it is a used car or an attorney, that doesn't really change.


  • 3 years ago

    In the other post I believe OP indicated they paid $168 K so it’s a good chunk of money they want back

  • 3 years ago

    @bry11 were not suing them for any amount. We are asking if they are offering to cancel the contract, that they return our deposit. I understand it’s not that simple but it also is that simple. They were building this spec house before we bid on it. Our money isn’t what funded the their project nor the reason they are building this house. If they want to cancel the contract our deposit should be given back. If they don’t then they shouldn’t have offered to cancel the contract.

  • 3 years ago

    @jeffreygrenz they offered to cancel the contract due to not being willing to properly build the home as agreed upon. However accepting their offer to cancel the transaction comes with holding onto our money. Our builder stated from day 1 that it would be built in a manner which meets certain standards. Regarding the earnest and deposit money, he told our real estate agent this.

  • 3 years ago
    last modified: 3 years ago

    I have read much of all of your threads, and I do feel sympathy for your situation. You have received a ton of good advice. I have a threefold recommendation for you:

    1. You and your family need to come to a full realization and acceptance of the fact that you are not going to get out of this situation without losing some money. This is an emotional thing, and I know from experience how feelings of being treated unfairly and regrets and what-if's can take over your thought processes. But the fact will remain, that you will pay/lose some amount of money. Either you lose some "interest" on the deposit that the builder retains while trying to find a new buyer for the home, or your builder "cheats" you, or some amount for attorneys fees, some amount for the super-special mold remediation specialists you've hired, and/or some combination of all of those.

    2. Once you come to this realization, you ought to put on your business mindset and try to minimize those expenses while keeping your son/family happy. You can only control what you can control.

    3. My final thought is that in your situation, I would consult with an attorney, but only to help you negotiate your way out of the contract. That's all you can do, given the fact that your family and the builder have differing viewpoints, understandings, and now disagreements, with a seemingly mutual desire to part ways. The relationship cannot be salvaged at this point, given the loss of confidence and disappointment on your side. A few hundred dollars to have a consultation or two with experienced construction attorneys who have a mindset to help you get out of the contract will do you a world of good.

  • 3 years ago

    Katie Hunter - With all due respect... You have an attorney, who has presumably read your contract, seen relevant communications, is familiar with the laws in your state, etc... What exactly do you expect to learn here and why did you start two threads to do it?


    If you want to feel like you are in the right... go ahead and feel that way. However, there is a fairly substantial chasm between being right and having $168,000. There is no insight that this community can offer you that will rival that of the attorney as s/he just has more information. No one said anything about you suing anyone. We are having a side discussion about the fee structure of attorneys and their outcomes.

  • 3 years ago
    last modified: 3 years ago

    As I said, "One of the most significant benefits is that contingency fees can shift the risk from the individual to the attorney."

    No, that is not what you said. You actually said, "An attorney on contingency is gambling with his time/money, not yours. That makes them pick winners."

    They are absolutely gambling with your money. The OP is trying to get $168,000 back from a builder, that is not the attorney's money. If that attorney were to take the case on contingency, they would keep at least a third and more likely 40%. Contingency cases settle faster and for less money, which is fine if you are chasing a windfall from a former employer, but not if you are trying to negotiate the return of a six figure deposit.

    Of course, contingency arrangements move the risk to the attorney, I don't think anyone would say otherwise. They also significantly shift the rewards to the attorney. An attorney being risk averse is only beneficial if you are unlikely to win your case.

    This is your whole spiel all the time... It seems you believe that attorneys always take advantage of people and charge too much money. Which is something that contractors also regularly do. The reality is that most attorneys do actually advocate for their clients and don't advise them to sue people when it is not in their best interest. Which is the only benefit that you believe contingency fee arrangements have.

    BTW: Your source is marketing material from a firm that makes its hay suing employers for discrimination. Try looking for a study of results and fees rather than a firm's marketing material.

  • 3 years ago
    last modified: 3 years ago

    I don’t believe there has been any discussion on whether the contract contains an arbitration clause, which is a fairly common practice in many jurisdictions. That may provide the avenue of dispute resolution as well as who pays attorney fees in this case, which is why it is essential to consult with an attorney to understand your rights and remedies in a particular scenario. Any discussion here without that level of detail is pure speculation.

  • 3 years ago

    The OP has consulted with an attorney. They have two threads that are similar and they mention in the other one that they have an attorney.

  • 3 years ago

    Yes, that was sort of my point. This is a conversation that needs to be had with an individual’s attorney, not a message board where anything said here needs to be taken with a grain of salt (and probably a shot of tequila). We are all just speculating. You need to be clear with your attorney, who should work with you to help you define a ”win” in the context of your specific case facts and set reasonable expectations. Somehow this turned into a string about attorney fees, contingency fees, etc.

  • PRO
    3 years ago
    last modified: 3 years ago

    You would do well to read that contract and post the exact contract terms that the builder has failed to meet. The house will meet building industry standards, so you cannot suddenly create your own more arbitrary standards that the home did not meet. Changing windows, or a the kind of sod used, or other things is not going to fall under that, as this is not a custom build. Even if it were, the builder reserves the right to make multiple "similar materials" expediency or availability changes, as you will see if you read a custom build contract.

    Attempting to bypass the written contract IS grounds for the contract being broken. You are the one attempting to do that by attempting to change it after the fact.

    This is not a property that you own, and he does not work for you. He is producing a widget, that you agreed to buy. Like a new car. It is a real estate sales transaction, just like buying any existing home. It is not a contract to build a custom home. There are things you can ask for when buying a home, but the seller has the right to say No, we are sticking to the contract that you signed. You should look up the term "specific performance", as that relates to contracts where someone has buyer's remorse.

    BTW, there is no need for 3 threads on the same issue. Opinion shopping is bad forum etiquette. Your other 2 threads, in addition to this one. All with an almost unanimous opinion about your situation.

    https://www.houzz.com/discussions/6385972/breach-of-contract#n=2

    https://www.houzz.com/discussions/6386209/breach-of-contract#n=72

  • 3 years ago
    last modified: 3 years ago

    @DeWayne said, "You would do well to read that contract and post the exact contract terms that the builder has failed to meet."

    I can do this. The builder has proposed a settlement on the issue of mold remediation but is unwilling to stand behind a reasonable guarantee that the mold remediation will be successful.

    The house will meet building industry standards, so you cannot suddenly create your own more arbitrary standards that the home did not meet.

    Yes you absolutely can and any attorney worth his salt is going to argue by allowing the testing and proposing a solution the builder has admitted the home is not up to a reasonable standard. You can't propose a solution to a problem and then pretend the problem doesn't exist. That solution doesn't need to meet industry standards and parties regularly negotiate above industry standards.

    Attempting to bypass the written contract IS grounds for the contract being broken.

    No it is not. That is patently ridiculous and proof that you should just stop typing. It is likely that the only way the OP can breach the contract at this point is to not close on the home or miss some type of progress payment or selection deadline.

    The builder could claim an anticipatory repudiation of the contract but likely only if the OP notifies the builder that they are going to refuse to pay. You can attempt to bypass the written contract every minute of every day and it still be in effect. That regularly happens in commercial contracts and builders regularly bypass terms in their own contracts. Such as not following change order procedures.

  • 3 years ago

    The only reason I started 2 was bc I hadn’t selected “building a home” on my first post and couldn’t go back and edit it from my phone. I was not opinion shopping. Again, this arrogance on this “free” site is mind blowing. Forums are for opinions. Opinion shopping may be the most ridiculous comment I have read thus far.

  • 3 years ago

    Honestly Katie at this point maybe the forum isn’t for you. Yes there is lame advice here too but it’s free and you get what you pay for. Nothing replaces the advice of those in real life who will support you through this. You aren’t going to change this forum.

  • 3 years ago

    As is with anything online - you have to weed through the chaff to get to the wheat. (and develop a thick skin for the folks that derive pleasure from making people feel badly about themselves or their situation)

  • 3 years ago

    Because mold concerns from a site visit 2 months ago, followed by an email addressing the concerns to which they said they reached to their lumber yard to express concern and THEN the follow up email from the builder said that he himself “thoroughly inspected the entire framework” and “confirmed that the markings were green lumber yard paint”. Due to this false statement made in attempt to induce us to take action (cancel our contract which we did not) I built my “case” that they were guilty of negligent misrepresentation and that I was able to prove that through emails and documentation. As of today, we accepted their offer of returning our entire earnest money and deposit + our money spent on upgrades within 5 business days. To all of the Houzz commenters believe they wanted to get rid of us and think we were the problem; believe what you want. I know that is not what happened and that they dug themselves a pretty dangerous hole banking on us terminating the contract and being legally entitled to keep our money. I know that they failed in doing so because their attempts to spin the truth and coax us into canceling weren’t successful and they had no other choice. I almost want to thank all of the rude people here who forced me to keep fighting. It worked.

  • 3 years ago

    I’m glad you are getting your money back! I’m sure you will be anxious until the money is in the bank, but then what a relief that will be. I just hope they don’t merely mask the problem and turn around and sell to someone unsuspecting.

  • 3 years ago

    @Katie Hunter - I am truly glad things worked out for you. However, you have consistently been inconsiderate in your posts and so your spiel about rude posters seems a bit out of place.


    First, you were asked to stop with the wall of text and you chose to simply ignore that. What exactly do you have against a hard return? Were you assaulted by your keyboard's [Return] key? Breaking up your text makes it easier for other people to read and it is absolutely considered rude to not do so. Which is fine, you maybe didn't know... however, even after this was pointed out you chose to continue.


    Furthermore, you posted three threads on this topic in three different sections instead of cross-posting. When people post the same thing on multiple threads they always get the threads mixed and seem to assume that every poster is reading every response. One of your posts is on a forum I don't subscribe to and haven't seen at all, another had Verbo/Lomo/Hu... and his anti-consumer rants, but this one was far less rude than that one. Aside from my asking what your wanted from us and some sketchy but well meaning legal analysis, everyone on this thread was trying to give you good advice. Yet you posted about people being rude here and haven't there.


    Finally, you seemed to only respond to the adversarial comments. People have asked for more information and you refused to respond but if someone challenged you they had no trouble getting a response. Again, if you just needed the stress release of a good fight... great. However, if you find yourself in need of assistance on your next home... it would be beneficial if you started one thread and threw in a couple of hard returns in that post for good measure.


    Good luck.

  • 3 years ago

    @chicagoans I know! I do feel bad knowing they likely won’t do anything about it, even though they are still claiming they are going to. If they’re relisting it today or this week, obviously they aren’t.

    I just hope the new buyers aren’t sensitive to mold, however a lot of people gravitate towards new construction for the sole reason of it not having mold and being their safest option. I do hope they do as good of a job as they can afford to and maybe would file claims or make demands from their limber yard at the time as opposed to fighting them after the fact, like they are doing now.

  • 3 years ago

    “I was never ruined but twice: once when I lost a lawsuit, and once when I won.” - Voltaire.

  • PRO
    3 years ago

    " It makes your kind comment disingenuous."


    Katie:


    I argue with bry911 quite a bit and we both seem to enjoy it. He's a lot of things, but "disingenuous" is not one of them.

  • 3 years ago

    @joseph I am simply saying that statement saying @bry11 was truly happy but then followed up by lengthy remarks about my lack of correct posting format and my overall intentions devalued his statement about being truly happy things worked out.

    I guess I expected too much from my posts, not realizing people would take time to all I didn’t deserve or their theories on mold. I anticipated the differing opinions on mold, which is why I prefaced it in my post about not wanting to have a mold debate. I guess I also should have stated that I am not looking for a flood of commenters telling me how I am SOL and it’s my problem and it’s on me and I’ll never be satisfied.

    @bry11 you did provide some good advice but you also peppered it with a lot of insults. Regarding me not answering people’s questions, I looked back and I did answer questions. The funny thing is most didn’t ask questions just make assumptions and gave their negative opinions on something they didn’t bother to clarify. Had someone asked:

    -did the builders ever in writing state there would be no mold in the home
    -are the builders denying there is a mold problem
    -have the builders in writing or verbally claimed or promise to correct the issue

    I did appreciate your comment about how to state a response to them about holding them to passing the post inspection, however it was sandwiched between a lot of unnecessary remarks which concluded with a recap of all that I did wrong. If I misinterpreted your tone, I apologize.