Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 6 years ago on . Most recent reply

User Stats

14
Posts
4
Votes
Rhys Royales
  • Investor
  • Frederick, MD
4
Votes |
14
Posts

Can an End Buyer put a lien for "Executed Labor"?

Rhys Royales
  • Investor
  • Frederick, MD
Posted

I have assigned a contract in Maryland to an end buyer for a property owned by a foreign family that needs to get an ITIN and FIRPTA from the IRS. I have expressed upfront to the end buyer that the closing process could take months since application for ITIN and FIRPTA could take weeks. There was a delay on the seller's end to start the application of the ITIN and FIRPTA because the end buyer wanted to renegotiate the price of the property. On top of that, the previous government shutdown delayed the process as well. As we come nearer to the closing deadline, I requested a contract deadline extension from the seller which they willingly agreed/approved. Upon letting the end buyer know that the closing deadline has been extended in case the ITIN and FIRPTA won't get on time, the end buyer threatened that they have been patient long enough and will require either:

1) addendum to include an allowance for an extension of a per diem charge of $100 past the agreed upon 12 week date.

or if I do not agree with this,

2) they intend to place a lien for the "executed labor" that has already been completed.

Key notes are: 1) No one allowed the end buyer to do any work on the property and; 2) I just checked the property this week and there are no significant changes or improvements on it.

Most Popular Reply

User Stats

2,465
Posts
3,857
Votes
Patricia Steiner
  • Real Estate Broker
  • Hyde Park Tampa, FL
3,857
Votes |
2,465
Posts
Patricia Steiner
  • Real Estate Broker
  • Hyde Park Tampa, FL
Replied

Ask the end buyers how they would like to proceed.  The options are:

1.  Accept the contract extension.

2.  Decline the extension and walk.

That's it. 

Advise that any work they performed at the property was unauthorized by the seller and they have no legal right to enter the property, alter it in any form, or lien it.  The seller will vigorously protect his ownership interest in the property through closing. The addendum they requested is outside the scope of the transaction.

The delay is unfortunate but it is what it is and closings are delay all the time for a host of reasons.  I recommend responding as though you're willing to find another end buyer if that's what it comes to - because if you don't, this one will think they control the transaction.  And, they so don't.  

Loading replies...