The LaPlante Family Revocable Trust owned
residential property for several years, where John and Lori LaPlante lived. In the
Spring of 2018 it was listed for sale, due to Lori LaPlante’s debilitating allergies
to the birch and oak trees on the property.
Chad and Kelly Short toured the property
in May 2018 and offered $690,000 to buy it on the same day. Negotiations did
not alter the price, but did firm up the earnest money deposit and a repair
allowance.
In June 2018 the parties executed a
contract, which included this sentence: “This agreement is subject to Sellers
finding suitable housing no later than July 14, 2018.” A few days after the
contract was signed Sellers sent an email to Buyer apologizing that Sellers
wanted to cancel the contract.
In that email Sellers explained they
no longer needed to move from the property because Lori’s allergy symptoms had
abated as a result of successful medical injections.
Chad and Kelly, believing that
Sellers’ attempt to cancel the contract was an indication that Sellers had
received a better offer, filed a lawsuit requesting that the court enter an
order forcing the Sellers to convey the property to the Buyers. The trial court
concluded that the contract was not enforceable, as there was “. . . no meeting
of the minds . . .”
Judgment was entered for the Sellers.
Buyers appealed.
The appellate court first determined
that Sellers’ performance was contingent upon Sellers’ procurement of suitable housing
by the stated date. In law it is known as a condition precedent.
The non-occurrence of the
contingency renders the contract unenforceable. The provision is not ambiguous,
nor is the provision subject to more than one reasonable interpretation. Instead,
Sellers had the right to procure replacement housing as a condition to closing.
Sellers did not do so; the contract
tanked.
As well, Sellers did not breach the
contract by suspending their search for new housing. They tried. They failed.
We’re done.
Judgment was affirmed for the
LaPlante Family Revocable Trust. See Short v. LaPlante, Case 2020-0113,
Supreme Court of New Hampshire, August 27, 2021: https://www.leagle.com/decision/innhco20210308232.
Lessons / Questions
/ Observations:
- Lesson:
One can sense Buyers’ frustration. Those who drafted this provision are
not identified in the Opinion. Because this provision leaves much to be
desired, perhaps Buyers had recourse against whoever wrote Sellers’
condition, if that person represented the Buyers.
- Observation:
This provision could have been improved without much effort. An obligation
of Sellers to use diligent efforts to find another home coupled with a
weekly email reporting requirement to verify Sellers’ diligence would have
been helpful. And, the insertion of a liquidated damages provision in
favor of Buyers might have motivated Sellers to search a bit more for a
suitable replacement candidate.
- Conclusion:
I believe most real estate transactions in New Hampshire involve real
estate attorneys. But that’s the title, financing, and closing components.
A real estate attorney’s preparation of a better provision might have avoided
a lawsuit, either by compelling Sellers to look diligently for a new home
or clearly providing that Sellers were not obligated to do so.
Stuart A. Lautin, Esq.*
* Board Certified, Commercial (1989) and Residential (1988) Real Estate Law, Texas Board of Legal Specialization
Licensed in the States of Texas and New York
Reprinted with the permission of North Texas Commercial Association of REALTORS®, Inc.
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