Restraining Order on a House? Is it a thing?.an hour before close

[Nick Romano]

Finally found my first multi family in the Boston suburb area....I think...This is more a story than a question.  I wan't going to post it here but I figured I may as well!  Maybe people  learn from it or shed some light on the situation.  Here goes:

So I've done all my research, and after about a year finally found an awesome multifamily!  I got the financing, put in the time, effort and money (appraisal, inspection, etc), insurance and all the above.  I knew the seller was going through a divorce and I was under the impression she had a court order to sell all her (four) properties.  About an hour before closing I got this email from my attorney:

"Nick,I just received and email form the seller’s attorney’s office stating that there is a problem with this closing. Seller hasn’t been served yet, but a Temporary Restraining Order was issued yesterday regarding sale of this property.

The seller’s attorney will be calling Jeff and once Jeff speaks with him we will call you. In the meantime, please hold off on going to the registry as this may not close today. Please let your broker know as well.

Thank you, Karen"

So needless to say we didn't close!  Has anyone ever heard of such a thing?  An hour before closing?

What I found out:  The seller is in fact going through a divorce, and she does have a court order to sell all her property.  However, there is a contractor that supposedly feels he is "owed" a portion of the proceeds of the sale (according to seller).  The seller is going to court on Thursday and we're re-scheduled to close this coming Friday....provided everything is solved in court.  

My Opinion:  I assume this is some sort of mechanic lean they put on the property?  But would this be described as a "restraining order"?  I'm trying to tell the seller that we should close on the property and the proceeds should go into an escrow account where she can then sort out how the contractor and herself can distribute the money/profits.  Is this a good solution?  Any other solutions?

Let me know what you guys think...this is an interesting one.

Thanks so much!

[Daniel O.]

@Nick Romano, the communication you had was from the seller's attorney, so presumably the term Temporary Restraining Order was used correctly. If such an order has been issued, then the seller has no choice but to abide by it until such time as a judge lifts it. What you propose makes sense in the world of common sense, but she would still be in violation of the judge's order if she moved forward and sold the house. The order is not on the house per se, it is an order directing her to take no action with respect to the house. 

Most likely it will all get sorted out pretty quickly. But do keep us posted as you learn things or the situation resolves.  Good Luck!!