Buyers Closing Attorney Withholding Money After Closing?

Question

We wrapped up closing 3 days ago on an apartment we where selling, and today we learned the buyers closed on Wednesday as well, but they have not recorded, and the buyers' attorney is holding money because the buyers think they should get more money for rents/security deposit.

Anyone know the legal ramifications around that in Virginia, or limitations, on holding disbursement?

Jay Hinrichs · Answer

Account Closed what you Don't understand is the deal is NOT done until its recorded. the Lawyer is a closing attorney and is neutral and has to take orders from both sides if one side says hey don't record I want to renegotiate then he or she is obligated to follow that order..Any one who recommends taking a lawyer to court absolutely does not understand the legal profession or real estate transactions.. Recommend you talk to a closing attorney about this before you give this kind of advice.. I love it though Sue the Bastard knew jerk reaction to a situation that just needs a little more negotiation's.I have personally stopped escrows in this exact situation money in everyone signed but not recorded or dispersed.. one call with my instructions to stop it is all it took... if the lawyer or closing attorney did not head that and went ahead and recorded then you have cause for action.but anyone who knows anything about the legal system knows court battles take years and a lot of money.. these guys will work it out...

Jay Hinrichs · Answer

Levi T. your advice is not going to get this guy anywhere ... your not really understanding how these closing process really work.

Jay Hinrichs · Answer

Account Closed there are all kinds.... in our area we have a very big Russian community. and they are fierce negotiators and one of their favorite tactics is to on the day of closing when everyone has their moving trucks and life plans put together.. they want to renegotiate and take some amount of money off can be small 2 to 5k or more. So you live and learn when I have a Russian buyer I up my NON refundable EM by double and make it released to me after contingency period if they are not willing to go for that I wont sell it to them.. so you really never know.. in this business. its an expeirnce thing and after 42 years and oh I don't know how many thousands of transactions I have seen most everything that can happen in an escrow.. NOT everything of course I learn new stuff all the time.

Jay Hinrichs · Answer

Levi T. got it same thing goes though you don't hand over the keys to the castle until you have your dough.. you are learning this one now.and you are also learning that signing docs does not mean anything if the money does not follow.good luck with it.. and you will get over it... good luckAnd yes with commercial you want to think the buyers are more professional for sure.but its not over till the fat lady sings and you have wired funds into escrow.

Jay Hinrichs · Answer

Levi T. Who is THEY? the title company. ? if no funds are wired in then the attorney can't close and record. just because you signed you could have a sale fail here.. AND NEVER hand over keys or let them collect rent before you have your money in HAND.. When we have someone move into one of our new constructions before their loan is ready ( to accommodate them not having to live in a hotel) we then have them release EM and sign rental agreement. but even that's a risk because if they holed up it could take 90 days to get them out. as you probably know suing someone is very time consuming and expensive.. would it not be best to just resell. I suspect it will go one of two ways.1. they ( buyer ) is dragging feet and money shows up so that title company can then record and dispurse and this is Moot.2. they never send money and you have a sale fail and you move on.. and you learned to never let someone have keys and control of rent prior to money in your jeans.

Levi T. · Answer

As in, the other party in general, including their closing attorney. This is not some little one unit house to hand over the keys, this is a apartment complex with over a dozen people all moving along in the transaction, including incoming and outgoing Property Managers, Agents, Tenants, etc.Normally buyers are much more professional at this level. You can collect damages for breach of contract, failing to close, etc. We would resell, but we would also go collect on damages, per diem, etc.

Levi T. · Answer

The holiday weekend pushed things out.. Interestingly, they still have not recorded as of this writing, tho they have been informed they have till 11am today to do so and provide proof of funds being wired.I have been working closely with my title company on this. Under Virginia law, they have 2 days to record, otherwise they can face damages. Since we have all documents signed, and nothing recorded or funded at this time, they are clearly going to have some legal issues if they don't make it happen today.They claim they have not recorded yet as they wanted to insure things where as advertised... Frankly that does not matter and does not give grounds for withholding, as they have been collecting rents, have the keys, etc.Hopefully they come to their senses before the clock strikes noon, otherwise I will be dialing up my attorney and taking them to court.

Levi T. · Answer

They have already signed, thus they "closed". The attorney just has not recorded it and has not disbursed the funds. Guess I'll be calling my attorney come Tuesday to go rack some knuckles.

Matt Lefebvre · Answer

@Levi Thornton, unless your contract clearly states that the closing attorney is to hold back money, that should NOT be happening. If the buyers feel like they should get more money, they can do one of three things:1) re-negotiate with you to amend your original contract2) walk away from the closing table and refuse to sign (basically bringing the deal to a halt)3) suck it up and sign.I can't imagine a closing attorney would hold money back for any reason, unless he had it in writing and signatures from both parties that money was to be held back... that seems beyond me. Unless its in a contract, it would be wise to get yourself an attorney and have them send them a nice letter to the closing attorney's office.