I've been a Texas realtor. If this happened to one of my clients, I'd recommend they sue the builder, over the house. The next buyers won't be able to get a title insurance policy with ongoing litigation over the property. A good lawyer could keep this house from closing, for anyone, for a year or more. Even a deceptive trade case. Maybe they don't have a case, but litigating would tie the property up for a long time. Ask me how I know. I've had a client get tied up in junk litigation, when selling a house, that couldn't close for over a year. You don't want a piece of real estate, you intend to sell, involved in litigation.
I did something similar recently. It's a long story but the basic premise was that I needed an easement established and the property owner wasn't responding, purposely ignoring me and doing a lot of other things to make my life miserable. The key to my victory was that they wanted to sell their land. My attorney filed something in court which put their property in litigation and suddenly they couldn't sell and had to play ball. Believe me, I would rather work things out like a reasonable person but sometimes certain people only respond to legal battles.
@@ryanroberts1104 - That builder may have gained $300k today, but they will have lost considerably more in bad press. I'm sure someone at the builder saw short-term gains but had no idea that this would get international attention. It is possible that this event will cause them to close their doors.
These contracts are crazy. When I sold my last house, the realtor had a clause that said their commission was owed when we accepted an offer. This would mean that if the sale fell through after we accepted the offer, we will owed them the commission without having sold the house. I told them no, you get your commission when we close and the monies are exchanged. I told them to remove the clause or I would go with someone else. Buying and selling houses is a nightmare.
I suspect the licencing board where I live would have had a realtor's licence if they tried that (not that I haven't seen stupid contract shinnenegans). What an asshole.
Thats how a contract should work. You review it before signing and negotiate items you don't agree to. Fail to come to terms, don't sign. Instead people sign a contract, cry about it when something thing they don't like happens. 🙄
@@mph5896 in the real world you try and negotiate and they say no take it or leave it, you go somewhere else and you find every builder / car salesmen, etc etc have the same 1 sided contract
This is scummy and usually this happens when a contractor/Builder either doesn’t have the capital to start construction or they need a quick buck…so they will take a contract and use the upfront cash (10-20%) to start building the home while behind the buyers back is pushing the home through a realtor hoping for a higher offer than the one the original buyer agreed to pay. The best way to avoid this happening to you is to buy the land first then hire a builder to build your home on that land.
When I bought my new construction house, I hired a lawyer to go over all the contracts, which isn't common in my state. Good thing I did. Lawyer found that clause and also it stated that we, the buyer, were required to pay the NJ SELLER fees! We didn't agree to either and the seller took them out of our contract and then we agreed. Lawyer went to closing with us too. Best $500 we ever spent! The lawyer saved us almost $8000 just in the seller fees. He also caught some things in the HOA contract that were unacceptable and had them removed too. According to the HOA contract we needed their permission to change any trees or plants in our front yard, but the way it was worded it made them responsible for the upkeep of our lawn, mowing, fertilizing, etc etc. So, the HOA didn't want that responsibility so it was removed. Builder planted cheap silver maples in our front yard which their root systems usually ruin your lawn, pipes etc, so that was the first thing we did is remove them. We probably would have never caught everything the lawyer did. I will never buy a new home without a lawyer now!
You... you bought into an HOA..? WILLINGLY? Oh, boy. Welp, good luck! Hopefully, your HOA doesn't screw you over, like so many seem to do every single day.
@@calanon534 there's only 26 houses in my development and once all of the homes were sold, we, the residents, took it over. It was $90 a month through the developer, now since we took over its only $30 q month. We basically just need it to insure the drainage areas and pipes. We all voted that's all the rules we have now, just the $30 a month which includes our insurance and pays the company who mails out the bills and collects the money. Every year, for the last 11 years we have a surplus which we use to throw a block party. So it's very laid back and costs minimally. So far, so good! Once we took over we all got rid of the developer's rules.
@@julietteoscaralphanovember2223 Still. There's no guarantee it won't all go to poopsville because of some asshole in the future. I'm of the camp that thinks HOA's should be outlawed nationally. However, I'm also of the "You do you, I do me, can't we all just get along" camp, so, I again will wish you luck that you dont' have an HOA nightmare in the future.
@@calanon534 with the prices of homes skyrocketing in my area I'm seriously thinking of selling my home and move to another state. We are retired and don't want to stay in the NE US
It wouldn't help people already going through it, but the real solution would be legislative. Of course, to get legislatures to ban this we'd need to get money out of politics so construction companies can't just bribe them to let it stand.
What happens when materials skyrocket due to an inept government and the contract already had a price locked in. Sorry but the home value went up or you are now going to wait till materials fall to reasonable levels.
@@adamjankowski7679 you’re suggesting the price of materials went up $300,000? Hogwash. Build margin into your quotes or buy the materials when the contract is signed.
One must also question the quality of the house if the builder is so loose with their ethical obligation. In my experience, about half of builders/contractors do substandard work.
@@fakjbf3129 There is a difference between below average and substandard. Average, being statistically 50%, about half of any group will be below average. But standards are the minimum acceptable quality. I'm saying about half of builders, contractors do failing level work.
@@chrism6880 I disagree. If the minimum standard is 50, you say half of all people do 49.99... or less. While I agree with contractors and builders, I don't believe that half of all employees are substandard.
contractors always hire the cheapest subcontractors. so yes most work you see will be substandard work only due to the capitalist tendancy of accepting the cheapest sub-contracting bid. which means the subcontractor must use the cheapest materials, and the cheapest labor to make the cheapest bid and still make a profit.
After the dust settles, I would make sure to get the word out that this contractor pulls stunts like this all in the name of greed and to watch out for him or his company.
Bingo! Someone probably grabbed the paperwork that morning to look it over before closing, realized they might be able to get more on the open market, and then pushed back the closing to confirm this suspicion before cancelling.
This is the same problem which happened with Rambus. They joined a memory consortium (JEDEC) where memory manufacturers discussed and created upcoming memory standards, so everyone could design their future products to interoperate. One of the contractual terms for joining was that you weren't allowed to patent anything being discussed. That way you couldn't submit an idea into the standard, and once it was in the standard and everyone had sunk $billions into manufacturing it, hit everyone with a submarine patent forcing them to pay you royalties. Rambus went ahead and patented the stuff under discussion (DDR). JEDEC sued and eventually won, but the contract didn't specify any penalties when a member violated the terms. So the only thing JEDEC could do was kick Rambus out. OTOH the patents Rambus got were valid, so JEDEC members had to pay Rambus royalties - the very thing that clause in the contract was supposed to prevent. To be an effective contract, any contract has to outline penalties for breaking said contract. And in this case the penalties listed for the builder are zero, making it a one-sided contract which only constrains the buyer. For this reason, I really think we need a law where if a contract does not penalize one side for breaking the contract, then there should be a default penalty equal in size to what the other party would have suffered if they'd broken the contract. In this case the buyer would've lost their deposit if they'd bailed on the sale. So the builder would be forced to pay the ex-buyer an amount equal to the deposit (i.e. the buyer gets their deposit x2 back). Yeah the builder could subvert this by penalizing themselves $1 for breaking the contract. But it's a helluva lot easier to spot a clause saying they can break the contract for $1, than to spot the lack of such a clause.
forewarned is forearmed. i had a sort of reverse situation. a realtor was going to buy my house after his contractor friend had renovated the home. at the very last moment he reneged, wanting to pay $10000 less. i had already figured it was gonna happen, so i called his bluff and got out of our contract (by HIS actions) and ended up selling the house a month later for $50,000 more. every once in a while, the good guy wins. (edit) i should be clear. the realtor was going to buy the house and the contractor was then going to renovate it. the realtor reneged on the sale at the last moment, which i didn't contest, but i trusted/liked the contractor and asked if he would still do the renovation. he agreed. he did $10000 of work on a handshake before i said "don't you need some cash?" he said yeah, it would help". from then on he told me what he spent, materials and time, i reimbursed him, all on his word until he couldn't walk anymore and died a few months later. my son-in- law finished much of the work.
@@_PatrickO me. i paid for every damn cent. what disturbs me is the contractor had cancer and died before he could finish. he was doing a fantastic job. he was a great guy. the realtor, supposedly his friend, was a 1st class asshole. (edit) just to be 100% clear, i paid off the contractor for every penny of work he did before he died. the real estate agent was the asshole. he tried to fuck me and he fucked his "friend", the contractor. who did 75% of the work by himself, by the way.
@@tomr6955 you DON'T know, brother. but i told you what happened, i hope i'm paralyzed from the waist down if i'm not telling the truth. would i want to tell you about how i fucked over some other person? well..... you know what... i guess some people would, but that's not me. interestingly, the real estate agent that tried to fuck me and his 'friend' (the actual contractor) was named tom.
You'd think if the builder pressured them to sell their current home to be in line with the contract there would be some legal ramification for backing out.
There needs to be a law against this. It's one thing for a small adjustment if materials costs increases but this is ridiculous. The builders costs didn't go up just because the price of the new house went up while being built.
If the builder did his job he locked in his prices too when the contract was signed. That's what happens here on my side of the pond and it works fine. There's absolutely no way a price increase is anything other than the builder knowingly screwing you over.
@@r000tbeer There needs to be a law that doesn't allow for this type of contract without restitution. They delayed for long time and even required them to sell their own house before they would continue to work. I think that the builder is in breach since they delayed it until it was opportune for them.
@@opetyr Did you not watch the video, or not pay attention at all? There doesn't need to be a law. READ THE FUCKING CONTRACT. It's literally that simple.
@@r000tbeer The language in most contracts is not easy to read and there are some people out there that would not even realize the consequences if they did read it. My government basically said this is unconscionable so we blacklist this clause. As a way to protect those people. If you think that forcing people to read a contract solves this you overestimate your own ability as well as that of others. Or you just have not seen any substantial contract and are deluded that a lay person could judge those.
I tend to agree. It is correct a contract is a contract. Yet we sign a contract in good faith. We want a house built. The builder fulfills his part by building the house. If I ended up losing everything (homeless wiped out financially) and the builder benefited from my misfourtune then these type of people need to be taught a lesson. .. I think before it gets to this stage probably best to have a lawyer read the contract before signing.. .. Sometimes principles are worth defending.
The last home I had built, back in 2015, I insisted on a clause that specifically said, "if you break the contract, I get my deposits back." They were very clear that they wouldn't break the contract. I reminded them about the housing crash of 2008 and said, "you have nothing to worry about if the idea of you breaking the deal is impossible." Fast forward to a month shy of closing and I lost my job. I convinced them that I wouldn't be able to close right away, but if they wanted to walk away, I would be ok with it. They walked, I got my deposits back. My only regret was being too scared to keep the house. I really wanted that house.
Something like that happened to us right before the housing market crashed in the early 2000's. We were disappointed then but in 2009 got a way better home, better location and a lot larger for 50k less! So it ended up being so beneficial to us even though at the time we were disappointed. The area we we lost out on went downhill and is a bad area now while the house we ended up buying has gone up 85k since we bought it.
@@LongWindedUsername my point was to tell story about something relevant that I experienced in my life. And, just maybe someone reads my story and they protect themselves in the way I did the next time they build a house. Having watched the video, I will amend my solution some way. My “fix” exposed myself to what the victims in this video experienced. However, I i think my exposure to the builder stealing my house for greater profits was lower since it was a semi-custom tract home. Property values weren’t increasing fast like in this video.
In the UK, a contract clause is unenforceable "if, contrary to the requirements of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer" In other words, if there's a clause that is too one-sided in favour of the vendor, it's unenforceable.
@@ryanroberts1104 The builder waited until the last minute to cancel and was using the buyers down payment to help fund the project. Otherwise if they didn't need that money they would have cancelled contract months earlier and refunded the deposit then. It probably won't hold up, but the buyer could make a case that they are owed some interest on the money.
Then I don't buy. It's as simple as that. Besides Banks are going to want assurance. Of course I wouldn't buy in a builder community ever. But to say it doesn't work that way is exactly the problem. It does for me. Because I don't have to buy. I may want to. But not that bad.
Question - why did the builder stipulate the buyers had to sell their previous home before they would finish building their home? Surely, what the buyers do with their previous home is nothing to do with the builders.
@@ryanroberts1104 Quote -"Because they didn't bother to PAY..." That doesn't even make sense. The buyers were ready to pay and it was the builder who kept delaying and then finally cancelled. I still don't get what business it was of the builder to force the couple to sell their old home.
@@ryanroberts1104 I did work for multiple builders who would only work with a particular real estate agent who kicked back some commission. Lawyers, home inspectors etc also participated. Builders are mostly crooked.
Yup I knew a older lady that had a rental property she didn't go through courts to get people out she pays local bikers to explain that the people are leaving cost less and the people seem very willing to move fast lmao
Wow! I've never bought real estate without having an attorney review the contract. A couple hundred bucks would have prevented a lot of anguish in this case.
You can do that, the issue is that you're stuck getting the mortgage at the beginning of the process and if you're paying a mortgage, or rent, on the place you're currently living, that can be unaffordable.
@@GeorgeWashingtonLaserMusket That's definitely possible, this is why you'd want an attorney to go through the contract, and to make sure that you've got the cash, and a loan large enough to cover it. You'd also want to be mindful about the terms of the loan, because if the bank can modify the limits or call it, you can also wind up having to give up the property.
@BillyTheKid lol I would hire someone to pour the foundation. But for real you can easily hire a contractor to build a house on your land without the underhanded bs. There are tons of legit contractors but they are expensive around 20-30% over cost of materials and sub contractors. All the liens I know against peoples property are for failure to pay, you have no idea how many rich assholes simply don’t pay their bills thinking they can bully the contractor. They also almost never result in the person losing their house, I legit have never heard of that happening in my area even though I am sure it does happen it just isn’t that common. That being said contractors also do incredibly unethical things as well, it is sorta a hilarious cycle of disappointment.
@@michaelstrang2563 Most of those liens are from when a main contractor doesn't pay his subs. The homeowner gets stuck with the lien because he doesn't want to pay for the work twice.
You must read the entire contract & make them remove the parts you don't agree with. When they say the clause "isn't a big deal" then your response is that "then since it's not a big deal you will remove it."
That clause in the contract giving the builder the right to break the contract without buyer recourse seems to be against public policy. Not being a lawyer, I think that the builder's delaying for one week the closing date, using the excuse to the buyers that the builder still had to lay down carpets, is the lie that will decide this case in court. That closing date is a contractual promise that the buyers probably did not waive in writing. So the builder canceled the contract one day too late, one day after the buyers should have completed the home purchase.
IANAL, but that clause should be removed by a judge with the remaining contract intact as its inclusion would otherwise render the entire contract void. In order for a contract to be valid, there typically needs to be an exchange of benefits. In this case, that clause being exercised merely because the builder thinks it can make more money means that the prospective buyer did not receive any benefit from the contract. We'll have to see how the actual court case goes, but with the funniness with the moved closing date and the forced sale of the house, there's almost certainly some sort of cause of action and the attorney should be able to get an injunction barring the sale of the house to anybody else until the legal issues are resolved. I would expect that any competent judge would rule that the clause isn't enforceable, but the rest of the contract is and the closing must go forward, but it is Texas where the judiciary has a reputation for being procorporate, so who knows.
Every new build contract I have ever seen has clauses about delayed closing dates of the finished property and the notifications required as this is the most common issue with new home builds. So I am sure a clause was in there saying that if they notified them x-days in advance buy email or text or mail of changing the closing date. So I am almost 100% sure they could not use this (unless they were able to absolutely prove fraud).
Having bought houses... The buyers absolutely agreed to move the closing. If is a simple extend amend contact that changes dates in the initial contract, and I've signed multiple while both buying and selling.
@@paraax My wife and I had to delay the official closing on our house by one business day. All the paperwork was signed, but because the seller delayed on getting final closing costs until it was too late for the wire transfer to go through that day (we had confirmation that the transaction had been made but not processed, which was good enough to get the keys transferred), we didn't officially close that day.
Do they still own the land? When I was looking to do this, I was going to buy the land, and then contract a builder to build the house. If they tried this, I would still own the land, and tell them to move their house off my land. These people should just move into the house, and then let the builder try to evict them. Apparently its impossible to evict people these days.
It sounds like they needed a better attorney to review that contract. I hope they get plenty of damages. Kills me how companies use words like convenience and select nearly always to their advantage, never the customer.
They needed to have an attorney review the contract before they signed, not after. Not much of a contract if one party can get out of it without penalty.
@@jamesodell3064 Exactly, before signing anything. Otherwise it sounds sort of like marriage, where one party gets cash and prizes at the other's expense.
@@tsslaporte no necessarily.. these clauses were probably in contracts for years and they were never used (Like Steve said he had never heard of this till this year).. Builders in 2020 did not have a crystal ball telling them what the pandemic would bring. So if you took the contract to a Lawyer in 2020 chances are they would say it was fine as in normal times and economies there would not be an economical reason a builder would activate the clause.
This is a reason to always have your own representative in a real estate purchase. The listing agent is not required to point this clause out to you but to a Realtor it would be a red flag to end all red flags. I'd never let buyers sign that if I could stop them.
Or some people of color to do your dirty work and light the matches after scumbags like this do what they do. I've always got some n words standing by for situations like this. Can't sell a pile of burnt sticks.
@@ryanroberts1104 There are, indeed, listing agents for many new construction houses of this sort... usually direct employees of the builder, if I understand correctly. However, my general vibe of the real estate industry from hearing horror stories is that real estate agents rarely bother to explain contracts to their "clients", assuming they themselves even understand the contracts. Raising concerns that might shoot down a sale isn't conducive to earning commissions, so I wouldn't even be surprised if these people had an agent. Literally, the only thing that makes this specific situation legally interesting was the agreement they had with the developer about them selling their own house first. *_EDIT: Mr. Roberts is correct. Not because the agreement itself was unusual, but because the developer may have broken it._*
It's in almost every builder contract I've seen. It's usually only invoked when you are a customer from hell and the company doesn't want to deal with you anymore.
@@ryanroberts1104 Actually, no, I had just forgotten about the fact that they would have had an outstanding mortgage. Too geared into First Time Homebuyer Mode. I'm used to hearing this story without the previous house involved. Thanks for correcting me. EDIT: Although, the "legally interesting" part doesn't necessarily mean it's "unusual". Just that the developer may not have worded something correctly, or may have overstepped the bounds of the contract. The case hinges on whether that part of the contract was handled properly, which it may not have been. Not enough info to go on in a TH-cam video.
@@ryanroberts1104 Are you an attorney? I'm not, but I have read legal analyses of lots of construction-related lawsuits, including ones related to cancellation for convenience. Courts frequently interpret contracts (or statutes affecting contract disputes) in ways that are non-obvious to the general public. Even if the contract itself is standard, perhaps the developer pushed the limits more than usual in their communications with the buyer. I'm not saying the suit will be successful. It probably won't be, but I'm not sure because I'm not a construction attorney licensed to practice in the state in question, and I don't know all of the facts of the case. I just watched a car lawyer read a news brief about it on TH-cam, like you.
There was a case in my city where it was not a new home but someone wanted to replace their home on their property.. so they hired a company to tear down their existing house and build a new one. Well they tore down the old home (where the family had been living) and then told them that market values had changed and they would have to pay a few hundred thousand more for the building on the new house (which they could not afford!).
I'm having a house built on my land in the near future. I suspect that would make this particular scheme harder to pull on me, but I'll definitely be hiring a good lawyer to deal with the builders when I'm doing this.
Well if it's land that you already own, then there wouldn't actually be a closing. You'd likely have some kind of "Pay as you go" arrangement written up. At least, that's how it worked when my parents built their house about 20 years ago.
This is something that I have been thinking about, too. Buying a nice piece of land and building my dream home a few years later. I just wonder, after hearing this story, if there wouldn't be some sort of coercive effort from the builder to somehow get the title for the land combined with the building so they could pull something like this. I wouldn't be surprised and I certainly wouldn't give up my name on the title without a lawyer's advice.
@@MrsM714 If it's land you already own, and the builder is honest, they wouldn't have any objection to a "Pay as you go" setup as long as it was sensible. But I wouldn't give up my name on the deed regardless.
I think they have a case, because this goes beyond just the wording of the contract. If the contractor pushed them to sell the house and paid additional money to facilitate the build, then this is bad faith. I'll bet they will win this case, and I hope punitive damages will be awarded as well.
@@ryanroberts1104 - Nope. Bad faith. When they prove that the builder kept demanding money and other things be done by the buyer, then pulled this stunt at the last minute is enough to give them a chance in court.
@@ryanroberts1104 We'll see. Perhaps you have no idea what "bad faith" is. Bottom line is that it appears the contraootr knew well ahead of time of their intentions, while pushing the buyer to continue to pay more money and accommodate their needs to get the house built. I think I said that already.
I feel like owning the land outright BEFORE hiring a builder would help with situations like this (how can the builder sell the house out from under you if they don't own the land it's on?) but I'm aware that's not how new developments work, and that's where most new home construction takes place.
Contractor said that they “…can’t discuss contract since it would be inappropriate.” Well, does seem the contractor’s an expert in all things inappropriate!
This is the very reason why we need attorney's, Read the fine print, understand what all of the contract states, not just the part that they want to tell you, don't be in a hurry to give your money away
I have worked as a contract manager in the past. I'm glad I have that experience because it is so common for companies to pull crap like that. I look out for things like this all the time. If needed I simply put in my own clauses. Often times they will sign without even reading it and then I have them by the short and curly's.
@@ryanroberts1104 you obviously haven't tried then. When you have the money that they want, they will negotiate with you. And if they sign without reading what you added, then they are just as bound by that contract as you would be if you didn't read it. There have been court cases that have upheld this already. And like I said, I've done this professionally. Perhaps you might want to understand that these contacts are negotiable. They are not take it or leave it when it comes to building or many other things. If you don't understand how to negotiate, then that your folly.
Is the builder named? I didn't catch that detail. Seems like valuable consumer advice. (Once the name of the builder becomes public, I don't see how anyone would be opened up to liability if they report correct factual statements or statements of opinion.) This really is the only recourse against these builders who are basically legal departments and administrators (not necessarily GCs), and who know how to set up an air-tight, one-sided deal.
The family may find out this is a good thing. Home prices are starting to go down. I am seeing homes in north Texas having price drops of 15-45k where I am. Plus they sold their old home at the top of the market.
We bought our first house through a co-op that had been funded by the provincial government, for people that would not be able to get a home by the percentage downpayment system. Our house was purchased just a few months before the housing boom (for $46,000) in our province. Our house is now worth $180,000, before any renovations we added. We heard through the grapevine, so very unreliable, that the seller had tried to go behind our backs to the mortgage holder to have the mortgage null and void, due to some past basement possible leakage if you watered the lawn closer than 4 feet to the house. It got shut down, as we had already fixed the possible issue from experience with friends and we built up a slope away from the house and added an eavestrough that hadn't existed when we bought the house. We lucked out, but a lot of people didn't, and couldn't close their deals because the realtor or owner was aware of the possible boom. Whew..
This can be avoided very very easily, Buy the Land first for your new home then contract a builder, don't let them own the land you are building on. This will prevent them from being able to do this. Yeah this needs to go to court, Civil contracts go so far, I am wondering though if there can be Criminal accountability for this, as this sounds like a scam.
Building a home on your own land will cost a lot more than going through a development. They are buying materials at a discount compared to what you will be getting. There are also contractors that will double dip in payments costing you more as well. Recently while watching a real estate show they talked about this very thing. He estimated that he paid 50% extra for his house through the extra cost of materials and his builder double dipping when contracting out work. He pretty much said that if you are not planning on handling all the subcontracting get ready for a hefty bill.
@@Azsunes Materials have zero to do with land ownership. Developments do not store materials they buy them as owners become available. Its true if they are building an entire development at once but not at 1 house at a time.
I spent 13 years working for general contractors, none of them would have done this. We didn’t advertise, never needed to. Listen to the line “ the builders parent company “ our housing market is being overtaken by huge investment groups.
The family should move in anyway and become squatters. Then drag out eviction in the courts to wear out the builder until they relent. That's been working in other Steve Lehto videos.
Builders are able to do this an get away wit it because Biden an the Democrats don't give a s*** they know it's happening but bottom line they don't give a shot and this is more rampant in certain parts of America but believe me it happens in every single state
Read your contracts everyone! We've all gotten so used to signing without reading and it's biting everyone in the butt (well except for the scummy builders)
My ex employer wanted me to sign a new non-disclosure, anti compete and rights to all ideas while employed contract. I stalled, and when HR contacted me about not receiving my signature, I simply asked if they had used lawyers to draw up the new contract. They said "Of course!", so I said, I need time for my lawyer to review this new employment clause. On my own reading, I've noticed some clauses that cause me concern. How do I know if you haven't put a "first born" or organ donation requirement into this contract? Isn't that a reasonable request? I never signed. I was labeled a "trouble maker" and later became "redundant" and now blacklisted.
I have heard this same story multiple times in the last 2 years. The builders will face no consequences as the demand for construction is far greater than supply.
That's why they need to Name and Shame the builder so that anyone thinking of dealing with them in the future can know what kind of scumbags they're working with. Home prices are in a bubble right now. Once that bubble breaks, having a reputation (online reviews) as a scumbag will make a lot of potential customers look elsewhere. Hopefully, enough to bankrupt the builder.
I've heard of this happening. About 5-8 years ago, there was an article about a builder doing this to an entire neighborhood that he built. Sadly, this is a standard clause in homebuilding contracts. It has and will continue be used in a predatory manner until it is addressed via legislation.
It's a great idea to get the government involved in every private contract ever! I assume you want to sit in a nice Alligator chair while reviewing the agreements of the peasants in a multi-billion-dollar brutalist office building.
"It's a great idea to get the government involved in every private contract ever!" If the government wasn't involved it wouldn't be a contract. The government already restricts "every private contract ever" from having/enforcing some unconscionable clauses. Policy is put in place to run a society sensibly and these builders are causing problems.
@@garyschoolcraft587 Absolutely BS. Contracts can and were enforced by the people writing them, it's the state that doesn't allow them to do so today. The state can't even properly interpret the second amendment, and you want the state to judge the constitutionality of private contracts? No thanks. You're just defending the state's monopoly on violence without proving a good enough reason to why they should even have that power to begin with. Sure, some people will make really STUPID contracts. However, people should be FREE to enter even unconstitutional contracts if they are fully aware that they are signing away their rights. Stupid people will get taken advantage of one way or another, it's just best if they get taken advantage of by individuals with limited enforcement power rather than the state.
@@henlofren7321 Are you going to shoot the home builder then? Is the home builder going to shoot you for giving them too little money? If you are saying “no” to either of those, then you are assuming that you can use the “government” to enforce your contract because you and the home builder can take each other to court.
@@evannibbe9375 I've been scammed by a few businesses before, and I made sure to cause at least proportional harm to them. I wouldn't take it as far as murder unless there were many other victims who also wanted them dead, or if my life was basically over as a result from the scam. If you answer "no" to your questions, you shouldn't even be alive. People will walk all over you and take your stuff as the state loses power.
When we built our current home in Texas, 17 years ago, our lawyer told us that even if it is not in the contract, it is part of the Texas laws that had been updated a couple of years prior. When it came time to put down the earnest money, I was very hesitant and in a meeting with our realtor and builder I raised this question. Our realtor said "Well I don't know who your attorney is but he's got to be wrong". But the builder's sales rep nodded it was in fact true. It's called the "buyer's an asshole loophole". I had to trust that I could pass over that earnest money check, and the builder would actually perform. It worked out for us. But it could have easily been different. The sales rep could literally have taken the check, put it into his desk and then hand me a paper saying, Sorry but we've decided to cancel the contract. And thank you for your $xx,000.
The rule of thumb, if they set a closing date and they want to push the date, tell them No, we have an agreement to close, so we will close and you can do the work after we close!
I’m wondering how contracts like this are legal. It’s literally theft if the people don’t get whatever they put in back. Companies doing this sounds like fraud was made legal.
sounds like state legislators need to step up and make some laws against this kind of thing like they do other industries that do manipulative practices in their business dealings
@@DerykRobosson some people insist their lives would be wonderful if only the government made more laws to protect them. I've never been able to understand the logic, but this is obviously a common thought process.
@@DerykRobosson believe me I'm not for more government but if the government will stand by and allow a person to be taken advantage of and not protect the consumer then why do we even have speed limits why do we have airbags why do car manufacturers need to put seat belts in why do we met and then date seat belts to protect people why have a police department if there isn't a purpose of the government to protect people let's just all carry guns and protect ourselves and then just let everybody be the wild west when it comes to contracts. I think the legislation should be extremely simple and not overly complex it should simply say either both people can back out for any reason and neither party can enforce their will on the other people with any kind of bullying or they're both tied to the contract where the other person has to default it's as simple as that doesn't have to be overreaching doesn't need to be thousands of pages matter of fact you could have one contract law that applies to all business contracts they must be mutually beneficial if anybody can cancel at any time for any reason then both parties must be able to do so
I have never heard of this happening in the UK but this may be due to the Unfair Contract Terms Directive (93/13/EEC) which protects consumers against unfair standard contract terms imposed by traders. Is there nothing similar in the US?
This likely happens very frequently in the Austin Texas area! Several of my friends whom are renting have seen increases of 30% in just a few months just to keep a crap apartment! I can only imagine how the builders of new homes are trying to screw people.
That has nothing to do with this. Prices are going up because of demand. That is independent of builder's carrying out shady practices to make a fast buck.
@@ryanroberts1104 When Corporations and the rich own all the homes, serfs are made! Corporations buying up a necessity is indeed a part of greed. Huge corporations are buying properties across the United States. This skews the fair market value to whatever the masters want! One of my friends rent went from $850 a month to $1350 for the same place! So many did not sign a new lease, that the property decided they would tear down and rebuild new apartments in a city that no one making under $75k a year can afford. Average being $1700+ .
Let that sink in 160 homes under contract. They're looking to make $300,000 off of these people because a convenience clause. How much are they going to make with that 160 homes. I'd say that's fraud of the consumers.
How is this not a case of detrimental reliance? The terms of the contract are obviously unconscionable. It puts way too much risk on one party without consideration. The company also held their money as a deposit and made communications to compel the family to sell their original home.
So in other words, their contracts says "we will build you this house for this price, but if we can sell it for more before closing you'll be shit out of luck"
Pretty much. There was a story about 5-8 years ago about a builder who did this with a newly developed neighborhood. Every home on the street was built under this type of contract and the builder exercised the clause on each one of them without even having new buyers lined up. It was obvious that it was his plan the entire time, but due to the contracts, nothing could be done.
@@ryanroberts1104 The bank finances it, the builder uses the down payment to cover interest, and the promise to mortgage from the buyer to help secure the loan from the bank. It also lowers their exposure to risk in the process. " without any assurance they can actually have the new house" I'm not sure this is actually the case, and a lot of any potential legal case is going to revolve around that.
Yeah, I'd make a 'Good Faith' moral clause in all contracts as part of actual legal evaluation. Whether or not the underlying contract terms were legal, if the contract was executed in good faith, a reasonable interpretation made of the competency of the party evaluating it would stipulate the effective terms. I.e. an average person buying something on contract, and told by the Salesman that it will do XYZ for ABC, and then it does none of that, even if the contract stated something different buried in it, the company would be bound to honor what the Salesman had promised, as otherwise THEY did not execute it in Good Faith. Ideally we would then feed the Salesman to the Crocodiles.
Crummy situation. Bummer they did not have the contract reviewed before signing it. What is the benefit of the builder having a buyer on the hook with a contract? Financing for the builder?
My dad used to be a small scale developer, he'd build one home at a time and manage things himself. Having a buyer on the hook for buying the completed home makes it a lot easier to get financing for the project, as the bank knows that the house will sell within a reasonable time of the expected closing date at or near the agreed upon price. This means that the bank knows that the contractor is going to have the money to pay back the loan. They may be willing to offer better financing options for the developer or financing when they might not otherwise be willing due to saturation of the market or having other developers that they could be loaning money to. It wouldn't surprise me if there was 3rd party interference, prompting the forced sale of the original home and the subsequent termination of the contract.
first it was all the crappy Lenders in 2008 crash. now its corporation's buying the houses so people can't establish Homestead. Pathetic how people want to get rich...
Every contract should be required to have a synopsis that highlights all the major points like this in everyday language that people can understand. They purposefully write them in a way that they know things will be hidden or not able to be understood. Yes, you can have a lawyer read it for you but that doesn't change the fact that they are taking advantage of people intentionally.
It sounds like they were in escrow with a closing date. In some states that would imply a new contract where perhaps that clause in the building contract would no longer apply.
I would think "undue enrichment at someone else's expense " would apply. It worked against me when i bought a house at sheriffs auction for less than the appraised value. In that case the bank had even requested a no minimum bid auction. 9 months later they took the house from me and gave it back to the bank claiming undue enrichment. I was left me hold the bag for the taxes i had paid ($1000) and $4500 in lawyer fees. I won at house at auction, didn't get to keep it and was out $5500.00. We have a wonderful legal system in Preble county Ohio. Crooked as the day is long.
I'm not a lawyer, but I think you would be able to find a judge who's sympathetic with the buyer due to how everything went down. "hey we need to move closing a week" then cancel the next day? That sounds like they already intended to cancel but wanted time to finish paperwork with another buyer. Sure would be a shame if that house suddenly was uninhabitable, karma has a way of making that happen.
Judges don't give a crap about hurt feelings when you sign a contract and doubling down by destroying property that isn't legally yours is just great advice overall.
@@sws212 oh I'm not saying they should cause damage to the home but Texas has some nasty natural events. And yes judges don't care about hurt feelings but like Mr Leto said a judge could find the actions of the builder to be unconscionable as it seems pretty obvious that the builder acted in bad faith.
"That sounds like they already intended to cancel but wanted time to finish paperwork with another buyer. " Yeah, but you are going to need some proof of that....
@@Ka_Gg If the new buyer has an offer accepted prior to this when discovery takes place, that then is proof, or even just phone calls to the builder or realtor about this prior to the date.
Ah yes. "Sell your house or we won't on your new one!". "What, you really wanted to move in? Well to bad, you won't. But I can point you to a nice bridge to sleep under!"
The name of that Contracting Company needs to be made public, and about how they do business. In a world of buyer beware, that can be considered unfair trade practice.
Even if they were allowed to cancel that should not be allowed after effectively forcing the sale of the old house, at that point there is no going back since one side has completed a major obligation.
It sounds like the only "solution" is to make sure everyone knows what happened so that no one will ever work with that builder or its parent company again. What were their names? Spread the word.
@@ryanroberts1104 Yeah, the current seller's market is about to drop like a rock. People refuse to deal with unethical shitheads all the time. The builder OUGHT to be worried about their name getting out in this one.
Whilst I am not legally trained I can see a potential problem for the builder in as much that he requested/demanded, in writing, that the purchasers sell their existing property before he would progress any further with the new build. The purchases complied with this condition/demand therefore by doing so triggered the new build contract by that action.
@@ryanroberts1104 I may be dense but until a contract is tested in court as to its fairness and reasonableness as to a consumers rights it is not a foregone conclusion as to a contracts enforcable legality.
The funny part for me is that the construction schedule was contingent upon the buyer selling their house…. Seems to me the when the buyer put their up up for sale then the closing should have been contingent upon the closing of the new house.
the market is so crazy here n N Texas that there are several builders that have stopped listing the property till they get final occupancy. They then will auction the house and highest bidder has 7 days to close. It is completely nuts right now...
Could the contract terms like that be declared against the public interest. It would be better to strike out that clause and have the builder initial it.
@@ryanroberts1104 Because they want to build you a house. They would claim that "they almost never have to enforce that contract provision" to which you should respond "so let's just strike it out." All terms of a contract are negotiable. If you aren't happy, find another builder.
Thanks for your many excellent videos. Didn't the contractor actually hold a gun to the buyers' heads due to the insistence that the buyer sell their previous home by a certain date? Was that specifically allowed in the contract? It isn't clear from your presentation.
Having been in the building trades before, I would say you are right. But likely due to unpaid tradesmen, because it has been my experience that if they are shady, they are shady with everyone. After threatening to torch a home I worked on in order to get paid what I was owed, I decided that life wasn't for me and went into law enforcement.
Ex coworker of mine was in one of these, where the developer would build you a semi custom house on a lot, and once complete you would take ownership. Part way through the project, he wanted to add some lights to a room, and tried to sweet talk (Or demand) the electrician add in the extra lights. The electrician refused to do it, unless it was in writing, and added to a change of contract. This guy decided to add the lights in himself. When the permit walkthrough took place, the electrician took great care to point out to the inspector the work that was not his. Ex coworker ended up in a breach of contract, and almost lost his investment into the project. He ended up having to shell out $30,000 more to smooth things over, when all he probably had to do is add less then $1000 for the extra lights.
I hope there's an update video on this one!!! That's some dirty shit. I hate when people take advantage of people who don't know any better. These people are just excited to get their house, why the hell should they be expected to assume the seller is gonna screw them? I mean, of course, most everyone watching Steve's videos will be distrusting of any contract, but the average person isn't going to think someone's goal is to screw them over. 😡 Hopefully a judge will step in and see how one sided this shit is and do something. But I suspect that Steve is right, a judge will probably be thinking of his huge case load and say "sorry, bro, you signed it...."
"Never get into a contract where the other party gets benefits from breaking it." - Kevin Samuels
There goes marriage.
Sunset clauses. A large number of off the plan sales get cancelled literal days before finishing
RIP
I've been a Texas realtor. If this happened to one of my clients, I'd recommend they sue the builder, over the house. The next buyers won't be able to get a title insurance policy with ongoing litigation over the property. A good lawyer could keep this house from closing, for anyone, for a year or more. Even a deceptive trade case. Maybe they don't have a case, but litigating would tie the property up for a long time. Ask me how I know. I've had a client get tied up in junk litigation, when selling a house, that couldn't close for over a year. You don't want a piece of real estate, you intend to sell, involved in litigation.
Someone buy this man a beer.
All you can really do is tie the title up in the courts so nobody can buy it until that's resolved
I did something similar recently. It's a long story but the basic premise was that I needed an easement established and the property owner wasn't responding, purposely ignoring me and doing a lot of other things to make my life miserable. The key to my victory was that they wanted to sell their land. My attorney filed something in court which put their property in litigation and suddenly they couldn't sell and had to play ball. Believe me, I would rather work things out like a reasonable person but sometimes certain people only respond to legal battles.
@@ryanroberts1104 - That builder may have gained $300k today, but they will have lost considerably more in bad press. I'm sure someone at the builder saw short-term gains but had no idea that this would get international attention. It is possible that this event will cause them to close their doors.
@@ryanroberts1104 - Do you know the difference between having a home built and buying a house already built?
These contracts are crazy. When I sold my last house, the realtor had a clause that said their commission was owed when we accepted an offer. This would mean that if the sale fell through after we accepted the offer, we will owed them the commission without having sold the house. I told them no, you get your commission when we close and the monies are exchanged. I told them to remove the clause or I would go with someone else. Buying and selling houses is a nightmare.
wow yeah you did good. fuck em
I suspect the licencing board where I live would have had a realtor's licence if they tried that (not that I haven't seen stupid contract shinnenegans).
What an asshole.
When my wife and I bought a house in 1998, we used a lawyer and he went through contract and x'd out every thing that made no sense.
Thats how a contract should work. You review it before signing and negotiate items you don't agree to. Fail to come to terms, don't sign. Instead people sign a contract, cry about it when something thing they don't like happens. 🙄
@@mph5896 in the real world you try and negotiate and they say no take it or leave it, you go somewhere else and you find every builder / car salesmen, etc etc have the same 1 sided contract
This is scummy and usually this happens when a contractor/Builder either doesn’t have the capital to start construction or they need a quick buck…so they will take a contract and use the upfront cash (10-20%) to start building the home while behind the buyers back is pushing the home through a realtor hoping for a higher offer than the one the original buyer agreed to pay. The best way to avoid this happening to you is to buy the land first then hire a builder to build your home on that land.
Not how it works lol 😂
@@thomasmiracle7826 🤨 Explain.
@@thomasmiracle7826
It does.
That is how it works, Thomas, you must be the greedy, unethical, price gouging builder these people were buying the house from.
@@thomasmiracle7826 .. they may still have a right to cancel but if the buyer owns the land then it really complicates matters for the seller.
When I bought my new construction house, I hired a lawyer to go over all the contracts, which isn't common in my state. Good thing I did. Lawyer found that clause and also it stated that we, the buyer, were required to pay the NJ SELLER fees! We didn't agree to either and the seller took them out of our contract and then we agreed. Lawyer went to closing with us too. Best $500 we ever spent! The lawyer saved us almost $8000 just in the seller fees. He also caught some things in the HOA contract that were unacceptable and had them removed too. According to the HOA contract we needed their permission to change any trees or plants in our front yard, but the way it was worded it made them responsible for the upkeep of our lawn, mowing, fertilizing, etc etc. So, the HOA didn't want that responsibility so it was removed. Builder planted cheap silver maples in our front yard which their root systems usually ruin your lawn, pipes etc, so that was the first thing we did is remove them.
We probably would have never caught everything the lawyer did. I will never buy a new home without a lawyer now!
You... you bought into an HOA..? WILLINGLY? Oh, boy. Welp, good luck! Hopefully, your HOA doesn't screw you over, like so many seem to do every single day.
@@calanon534 there's only 26 houses in my development and once all of the homes were sold, we, the residents, took it over. It was $90 a month through the developer, now since we took over its only $30 q month. We basically just need it to insure the drainage areas and pipes. We all voted that's all the rules we have now, just the $30 a month which includes our insurance and pays the company who mails out the bills and collects the money. Every year, for the last 11 years we have a surplus which we use to throw a block party. So it's very laid back and costs minimally. So far, so good! Once we took over we all got rid of the developer's rules.
@@julietteoscaralphanovember2223 Still. There's no guarantee it won't all go to poopsville because of some asshole in the future. I'm of the camp that thinks HOA's should be outlawed nationally. However, I'm also of the "You do you, I do me, can't we all just get along" camp, so, I again will wish you luck that you dont' have an HOA nightmare in the future.
@@calanon534 with the prices of homes skyrocketing in my area I'm seriously thinking of selling my home and move to another state. We are retired and don't want to stay in the NE US
@@calanon534 In some areas, it's nearly impossible to buy a house that isn't in an HOA
I’m a retired carpenter, I can testify to the fact that the majority of home builders are scumbags.
All of them are, some are just Lawful Neutral scumbags.
Let's make a list of them... LoL
Courts should reject unconscionable clauses. These kind of clauses should be inherently illegal.
Yes but how long will it take while the family is in need of housing?
They do, the issue is that unconscionable is pretty extreme and a lot harder to get done that people typically think.
It wouldn't help people already going through it, but the real solution would be legislative. Of course, to get legislatures to ban this we'd need to get money out of politics so construction companies can't just bribe them to let it stand.
What happens when materials skyrocket due to an inept government and the contract already had a price locked in. Sorry but the home value went up or you are now going to wait till materials fall to reasonable levels.
@@adamjankowski7679 you’re suggesting the price of materials went up $300,000? Hogwash. Build margin into your quotes or buy the materials when the contract is signed.
One must also question the quality of the house if the builder is so loose with their ethical obligation.
In my experience, about half of builders/contractors do substandard work.
@@fakjbf3129 There is a difference between below average and substandard.
Average, being statistically 50%, about half of any group will be below average.
But standards are the minimum acceptable quality.
I'm saying about half of builders, contractors do failing level work.
Normally average refers to mean, but median...
But I think over 50% of people in all industries suck at their job
@@chrism6880 I disagree.
If the minimum standard is 50, you say half of all people do 49.99... or less.
While I agree with contractors and builders, I don't believe that half of all employees are substandard.
contractors always hire the cheapest subcontractors. so yes most work you see will be substandard work only due to the capitalist tendancy of accepting the cheapest sub-contracting bid.
which means the subcontractor must use the cheapest materials, and the cheapest labor to make the cheapest bid and still make a profit.
@@jimster1111 I have seen much European quality building much better but at significantly higher price.
After the dust settles, I would make sure to get the word out that this contractor pulls stunts like this all in the name of greed and to watch out for him or his company.
@@M167A1 don't try that. IT's greed plain and simple.
Yea I hope they loose business over this.
See if there is a way to pull all their permit applications and contact all of their potential clients.
@@morganmcintire2853 I hope they go belly-up over this.
@@ericsmith8373 That would be ideal.
The lack of ETHICS in this day and age is beyond appalling.
Contracts like that should be declared illegal because they are so unfair. The builder purposely moved the closing date to invoke that clause.
Bingo! Someone probably grabbed the paperwork that morning to look it over before closing, realized they might be able to get more on the open market, and then pushed back the closing to confirm this suspicion before cancelling.
Yup. Clean hands is a thing.
This is the same problem which happened with Rambus. They joined a memory consortium (JEDEC) where memory manufacturers discussed and created upcoming memory standards, so everyone could design their future products to interoperate. One of the contractual terms for joining was that you weren't allowed to patent anything being discussed. That way you couldn't submit an idea into the standard, and once it was in the standard and everyone had sunk $billions into manufacturing it, hit everyone with a submarine patent forcing them to pay you royalties. Rambus went ahead and patented the stuff under discussion (DDR). JEDEC sued and eventually won, but the contract didn't specify any penalties when a member violated the terms. So the only thing JEDEC could do was kick Rambus out. OTOH the patents Rambus got were valid, so JEDEC members had to pay Rambus royalties - the very thing that clause in the contract was supposed to prevent.
To be an effective contract, any contract has to outline penalties for breaking said contract. And in this case the penalties listed for the builder are zero, making it a one-sided contract which only constrains the buyer. For this reason, I really think we need a law where if a contract does not penalize one side for breaking the contract, then there should be a default penalty equal in size to what the other party would have suffered if they'd broken the contract. In this case the buyer would've lost their deposit if they'd bailed on the sale. So the builder would be forced to pay the ex-buyer an amount equal to the deposit (i.e. the buyer gets their deposit x2 back). Yeah the builder could subvert this by penalizing themselves $1 for breaking the contract. But it's a helluva lot easier to spot a clause saying they can break the contract for $1, than to spot the lack of such a clause.
You provide an excellent case example and superb remedy. In addition, your remedy should be applied to the one-sided contract known today as marriage.
forewarned is forearmed. i had a sort of reverse situation. a realtor was going to buy my house after his contractor friend had renovated the home. at the very last moment he reneged, wanting to pay $10000 less. i had already figured it was gonna happen, so i called his bluff and got out of our contract (by HIS actions) and ended up selling the house a month later for $50,000 more. every once in a while, the good guy wins.
(edit) i should be clear. the realtor was going to buy the house and the contractor was then going to renovate it. the realtor reneged on the sale at the last moment, which i didn't contest, but i trusted/liked the contractor and asked if he would still do the renovation. he agreed. he did $10000 of work on a handshake before i said "don't you need some cash?" he said yeah, it would help". from then on he told me what he spent, materials and time, i reimbursed him, all on his word until he couldn't walk anymore and died a few months later. my son-in- law finished much of the work.
Who paid for the renovation costs?
How are we certain you were the good guy?
@@_PatrickO me. i paid for every damn cent. what disturbs me is the contractor had cancer and died before he could finish. he was doing a fantastic job. he was a great guy. the realtor, supposedly his friend, was a 1st class asshole. (edit) just to be 100% clear, i paid off the contractor for every penny of work he did before he died. the real estate agent was the asshole. he tried to fuck me and he fucked his "friend", the contractor. who did 75% of the work by himself, by the way.
@@tomr6955 you DON'T know, brother. but i told you what happened, i hope i'm paralyzed from the waist down if i'm not telling the truth.
would i want to tell you about how i fucked over some other person? well..... you know what... i guess some people would, but that's not me. interestingly, the real estate agent that tried to fuck me and his 'friend' (the actual contractor) was named tom.
@@tomr6955 we don't for sure, but he wasn't the one reneging according to his story. So he wouldn't be the one to start the action.
You'd think if the builder pressured them to sell their current home to be in line with the contract there would be some legal ramification for backing out.
Never allow yourself to be rushed through a contract. Sometimes that is done just so you don't have time to get it reviewed.
There needs to be a law against this. It's one thing for a small adjustment if materials costs increases but this is ridiculous. The builders costs didn't go up just because the price of the new house went up while being built.
If the builder did his job he locked in his prices too when the contract was signed. That's what happens here on my side of the pond and it works fine. There's absolutely no way a price increase is anything other than the builder knowingly screwing you over.
There needs to be a law that requires people to read the damn contract.
@@r000tbeer There needs to be a law that doesn't allow for this type of contract without restitution. They delayed for long time and even required them to sell their own house before they would continue to work. I think that the builder is in breach since they delayed it until it was opportune for them.
@@opetyr Did you not watch the video, or not pay attention at all? There doesn't need to be a law.
READ THE FUCKING CONTRACT. It's literally that simple.
@@r000tbeer The language in most contracts is not easy to read and there are some people out there that would not even realize the consequences if they did read it.
My government basically said this is unconscionable so we blacklist this clause. As a way to protect those people.
If you think that forcing people to read a contract solves this you overestimate your own ability as well as that of others. Or you just have not seen any substantial contract and are deluded that a lay person could judge those.
If this happened to me, either the builder would sell me the house at the price we agreed, or I would be going to jail.
I tend to agree.
It is correct a contract is a contract.
Yet we sign a contract in good faith.
We want a house built.
The builder fulfills his part by building the house.
If I ended up losing everything (homeless wiped out financially) and the builder benefited from my misfourtune then these type of people need to be taught a lesson.
..
I think before it gets to this stage probably best to have a lawyer read the contract before signing..
..
Sometimes principles are worth defending.
The last home I had built, back in 2015, I insisted on a clause that specifically said, "if you break the contract, I get my deposits back." They were very clear that they wouldn't break the contract. I reminded them about the housing crash of 2008 and said, "you have nothing to worry about if the idea of you breaking the deal is impossible."
Fast forward to a month shy of closing and I lost my job. I convinced them that I wouldn't be able to close right away, but if they wanted to walk away, I would be ok with it. They walked, I got my deposits back. My only regret was being too scared to keep the house. I really wanted that house.
Something like that happened to us right before the housing market crashed in the early 2000's. We were disappointed then but in 2009 got a way better home, better location and a lot larger for 50k less! So it ended up being so beneficial to us even though at the time we were disappointed. The area we we lost out on went downhill and is a bad area now while the house we ended up buying has gone up 85k since we bought it.
What's your point? These people got their deposit back too. That cause is extremely common, and it's beside the point.
@@LongWindedUsername my point was to tell story about something relevant that I experienced in my life.
And, just maybe someone reads my story and they protect themselves in the way I did the next time they build a house.
Having watched the video, I will amend my solution some way. My “fix” exposed myself to what the victims in this video experienced. However, I i think my exposure to the builder stealing my house for greater profits was lower since it was a semi-custom tract home. Property values weren’t increasing fast like in this video.
In the UK, a contract clause is unenforceable "if, contrary to the requirements of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer"
In other words, if there's a clause that is too one-sided in favour of the vendor, it's unenforceable.
I want the return of down-payment. plus interest and appreciation if they can do that. And videos like this should name names!
Because they are using the customers money as an investment!
@@ryanroberts1104 The builder waited until the last minute to cancel and was using the buyers down payment to help fund the project. Otherwise if they didn't need that money they would have cancelled contract months earlier and refunded the deposit then. It probably won't hold up, but the buyer could make a case that they are owed some interest on the money.
Then I don't buy. It's as simple as that. Besides Banks are going to want assurance. Of course I wouldn't buy in a builder community ever.
But to say it doesn't work that way is exactly the problem. It does for me. Because I don't have to buy. I may want to. But not that bad.
Question - why did the builder stipulate the buyers had to sell their previous home before they would finish building their home? Surely, what the buyers do with their previous home is nothing to do with the builders.
They may have not qualified for the new home if they still were making payments on the old home.
check who the real estate agent representing the sale and the purchase--- bet they make 2 commissions
@@ryanroberts1104 Quote -"Because they didn't bother to PAY..."
That doesn't even make sense. The buyers were ready to pay and it was the builder who kept delaying and then finally cancelled.
I still don't get what business it was of the builder to force the couple to sell their old home.
@@ryanroberts1104 I did work for multiple builders who would only work with a particular real estate agent who kicked back some commission. Lawyers, home inspectors etc also participated. Builders are mostly crooked.
@@ryanroberts1104 your construction industry knowledge comes from watching This Old House. Grow up dummy.
I think some knee caps need to be tested on some of these shady buisness practices
"Oh, gimme a break!"
"Sure, where do want it?"
Harding and Gillooly style?
Yup I knew a older lady that had a rental property she didn't go through courts to get people out she pays local bikers to explain that the people are leaving cost less and the people seem very willing to move fast lmao
@@youtubehatesfreedom1870 Also, $500 & a couple cases of beer is a lot cheaper & much faster than going though an attorney & court system
@@jamessimms415 yes it is I know she'd done it atleast 2 or 3 times old girl was no one to mess with she was a biker chic in late 60's and 70's
Wow! I've never bought real estate without having an attorney review the contract. A couple hundred bucks would have prevented a lot of anguish in this case.
I have a strict personal policy against wishing misfortune on others, but this company is really tempting me.
Not me I hope that they go broke and never build another house not even a dog or bird house.
It would really be something if a bunch of their builds got continually vandalized.
Oh, I got over that attitude a long time ago in life... Some people really do just suck, and deserve whatever bad Karma comes their way.
@@starhawke380 I am karma
@@jonm9538 The most vulnerable stage of construction is when the roof is on before the walls go up. You could not build a better bonfire ;)
If I ever built a home I would want to own the lot before construction began.
* lien
You can do that, the issue is that you're stuck getting the mortgage at the beginning of the process and if you're paying a mortgage, or rent, on the place you're currently living, that can be unaffordable.
@@GeorgeWashingtonLaserMusket That's definitely possible, this is why you'd want an attorney to go through the contract, and to make sure that you've got the cash, and a loan large enough to cover it. You'd also want to be mindful about the terms of the loan, because if the bank can modify the limits or call it, you can also wind up having to give up the property.
@BillyTheKid lol I would hire someone to pour the foundation. But for real you can easily hire a contractor to build a house on your land without the underhanded bs. There are tons of legit contractors but they are expensive around 20-30% over cost of materials and sub contractors. All the liens I know against peoples property are for failure to pay, you have no idea how many rich assholes simply don’t pay their bills thinking they can bully the contractor. They also almost never result in the person losing their house, I legit have never heard of that happening in my area even though I am sure it does happen it just isn’t that common. That being said contractors also do incredibly unethical things as well, it is sorta a hilarious cycle of disappointment.
@@michaelstrang2563 Most of those liens are from when a main contractor doesn't pay his subs. The homeowner gets stuck with the lien because he doesn't want to pay for the work twice.
You must read the entire contract & make them remove the parts you don't agree with. When they say the clause "isn't a big deal" then your response is that "then since it's not a big deal you will remove it."
@@ryanroberts1104 But a scummy builder gets to scam the customers and breach contracts?
That clause in the contract giving the builder the right to break the contract without buyer recourse seems to be against public policy. Not being a lawyer, I think that the builder's delaying for one week the closing date, using the excuse to the buyers that the builder still had to lay down carpets, is the lie that will decide this case in court. That closing date is a contractual promise that the buyers probably did not waive in writing. So the builder canceled the contract one day too late, one day after the buyers should have completed the home purchase.
Good point.
IANAL, but that clause should be removed by a judge with the remaining contract intact as its inclusion would otherwise render the entire contract void. In order for a contract to be valid, there typically needs to be an exchange of benefits. In this case, that clause being exercised merely because the builder thinks it can make more money means that the prospective buyer did not receive any benefit from the contract.
We'll have to see how the actual court case goes, but with the funniness with the moved closing date and the forced sale of the house, there's almost certainly some sort of cause of action and the attorney should be able to get an injunction barring the sale of the house to anybody else until the legal issues are resolved.
I would expect that any competent judge would rule that the clause isn't enforceable, but the rest of the contract is and the closing must go forward, but it is Texas where the judiciary has a reputation for being procorporate, so who knows.
Every new build contract I have ever seen has clauses about delayed closing dates of the finished property and the notifications required as this is the most common issue with new home builds. So I am sure a clause was in there saying that if they notified them x-days in advance buy email or text or mail of changing the closing date. So I am almost 100% sure they could not use this (unless they were able to absolutely prove fraud).
Having bought houses... The buyers absolutely agreed to move the closing. If is a simple extend amend contact that changes dates in the initial contract, and I've signed multiple while both buying and selling.
@@paraax My wife and I had to delay the official closing on our house by one business day. All the paperwork was signed, but because the seller delayed on getting final closing costs until it was too late for the wire transfer to go through that day (we had confirmation that the transaction had been made but not processed, which was good enough to get the keys transferred), we didn't officially close that day.
I wouldn't be surprised these builders start coming up missing!
Do they still own the land? When I was looking to do this, I was going to buy the land, and then contract a builder to build the house. If they tried this, I would still own the land, and tell them to move their house off my land.
These people should just move into the house, and then let the builder try to evict them. Apparently its impossible to evict people these days.
They never did own the land!
It sounds like they needed a better attorney to review that contract. I hope they get plenty of damages. Kills me how companies use words like convenience and select nearly always to their advantage, never the customer.
Crazy to think 30min and ~$800 would have nipped this in the bud.
They needed to have an attorney review the contract before they signed, not after.
Not much of a contract if one party can get out of it without penalty.
@@jamesodell3064 Exactly, before signing anything. Otherwise it sounds sort of like marriage, where one party gets cash and prizes at the other's expense.
@@tsslaporte no necessarily.. these clauses were probably in contracts for years and they were never used (Like Steve said he had never heard of this till this year).. Builders in 2020 did not have a crystal ball telling them what the pandemic would bring. So if you took the contract to a Lawyer in 2020 chances are they would say it was fine as in normal times and economies there would not be an economical reason a builder would activate the clause.
@@torbar9603 find a better attorney lol, mine wouldn't leave any clauses like that in there.
This is a reason to always have your own representative in a real estate purchase. The listing agent is not required to point this clause out to you but to a Realtor it would be a red flag to end all red flags. I'd never let buyers sign that if I could stop them.
Or some people of color to do your dirty work and light the matches after scumbags like this do what they do. I've always got some n words standing by for situations like this. Can't sell a pile of burnt sticks.
@@ryanroberts1104 There are, indeed, listing agents for many new construction houses of this sort... usually direct employees of the builder, if I understand correctly.
However, my general vibe of the real estate industry from hearing horror stories is that real estate agents rarely bother to explain contracts to their "clients", assuming they themselves even understand the contracts. Raising concerns that might shoot down a sale isn't conducive to earning commissions, so I wouldn't even be surprised if these people had an agent.
Literally, the only thing that makes this specific situation legally interesting was the agreement they had with the developer about them selling their own house first. *_EDIT: Mr. Roberts is correct. Not because the agreement itself was unusual, but because the developer may have broken it._*
It's in almost every builder contract I've seen. It's usually only invoked when you are a customer from hell and the company doesn't want to deal with you anymore.
@@ryanroberts1104 Actually, no, I had just forgotten about the fact that they would have had an outstanding mortgage. Too geared into First Time Homebuyer Mode. I'm used to hearing this story without the previous house involved. Thanks for correcting me.
EDIT: Although, the "legally interesting" part doesn't necessarily mean it's "unusual". Just that the developer may not have worded something correctly, or may have overstepped the bounds of the contract. The case hinges on whether that part of the contract was handled properly, which it may not have been. Not enough info to go on in a TH-cam video.
@@ryanroberts1104 Are you an attorney? I'm not, but I have read legal analyses of lots of construction-related lawsuits, including ones related to cancellation for convenience. Courts frequently interpret contracts (or statutes affecting contract disputes) in ways that are non-obvious to the general public. Even if the contract itself is standard, perhaps the developer pushed the limits more than usual in their communications with the buyer. I'm not saying the suit will be successful. It probably won't be, but I'm not sure because I'm not a construction attorney licensed to practice in the state in question, and I don't know all of the facts of the case. I just watched a car lawyer read a news brief about it on TH-cam, like you.
There was a case in my city where it was not a new home but someone wanted to replace their home on their property.. so they hired a company to tear down their existing house and build a new one. Well they tore down the old home (where the family had been living) and then told them that market values had changed and they would have to pay a few hundred thousand more for the building on the new house (which they could not afford!).
I'm having a house built on my land in the near future. I suspect that would make this particular scheme harder to pull on me, but I'll definitely be hiring a good lawyer to deal with the builders when I'm doing this.
Well if it's land that you already own, then there wouldn't actually be a closing. You'd likely have some kind of "Pay as you go" arrangement written up. At least, that's how it worked when my parents built their house about 20 years ago.
This is something that I have been thinking about, too. Buying a nice piece of land and building my dream home a few years later. I just wonder, after hearing this story, if there wouldn't be some sort of coercive effort from the builder to somehow get the title for the land combined with the building so they could pull something like this. I wouldn't be surprised and I certainly wouldn't give up my name on the title without a lawyer's advice.
@@MrsM714 If it's land you already own, and the builder is honest, they wouldn't have any objection to a "Pay as you go" setup as long as it was sensible. But I wouldn't give up my name on the deed regardless.
I think they have a case, because this goes beyond just the wording of the contract. If the contractor pushed them to sell the house and paid additional money to facilitate the build, then this is bad faith. I'll bet they will win this case, and I hope punitive damages will be awarded as well.
@@ryanroberts1104 - Nope. Bad faith. When they prove that the builder kept demanding money and other things be done by the buyer, then pulled this stunt at the last minute is enough to give them a chance in court.
@@ryanroberts1104 We'll see. Perhaps you have no idea what "bad faith" is. Bottom line is that it appears the contraootr knew well ahead of time of their intentions, while pushing the buyer to continue to pay more money and accommodate their needs to get the house built. I think I said that already.
I'm glad I haven't been backed into a corner like this in life yet. I'd be very likely to destroy my and their life.
I feel like owning the land outright BEFORE hiring a builder would help with situations like this (how can the builder sell the house out from under you if they don't own the land it's on?) but I'm aware that's not how new developments work, and that's where most new home construction takes place.
Contractor said that they “…can’t discuss contract since it would be inappropriate.” Well, does seem the contractor’s an expert in all things inappropriate!
That was a very pithy comment. Love it.
@@b_uppy
Giving me homework! “Hmm okay, pithy, pithy, pithy…?”
@@sombojoe
Well you're in a pithy mood. (Now you definitely have to look up pithy, lol.) 😅😅😅😅
BTW 'pithy' is different from 'pi**y'...
The fact that the clause was even in there says the builder was always crooked, even if they never exercised that clause before.
Sadly, it's a standard clause. I remember reading about a builder using that clause with an entire neighborhood of newly built homes.
This is the very reason why we need attorney's, Read the fine print, understand what all of the contract states, not just the part that they want to tell you, don't be in a hurry to give your money away
I have worked as a contract manager in the past. I'm glad I have that experience because it is so common for companies to pull crap like that. I look out for things like this all the time. If needed I simply put in my own clauses. Often times they will sign without even reading it and then I have them by the short and curly's.
@@ryanroberts1104 you obviously haven't tried then. When you have the money that they want, they will negotiate with you. And if they sign without reading what you added, then they are just as bound by that contract as you would be if you didn't read it. There have been court cases that have upheld this already. And like I said, I've done this professionally. Perhaps you might want to understand that these contacts are negotiable. They are not take it or leave it when it comes to building or many other things. If you don't understand how to negotiate, then that your folly.
@@ryanroberts1104 I have 3 contracts that have been signed that prove you straight out wrong.
Is the builder named? I didn't catch that detail. Seems like valuable consumer advice. (Once the name of the builder becomes public, I don't see how anyone would be opened up to liability if they report correct factual statements or statements of opinion.) This really is the only recourse against these builders who are basically legal departments and administrators (not necessarily GCs), and who know how to set up an air-tight, one-sided deal.
I hope the public/society take note of these builders and never commission them to build a structure ever again!
The family may find out this is a good thing. Home prices are starting to go down. I am seeing homes in north Texas having price drops of 15-45k where I am. Plus they sold their old home at the top of the market.
We bought our first house through a co-op that had been funded by the provincial government, for people that would not be able to get a home by the percentage downpayment system. Our house was purchased just a few months before the housing boom (for $46,000) in our province. Our house is now worth $180,000, before any renovations we added. We heard through the grapevine, so very unreliable, that the seller had tried to go behind our backs to the mortgage holder to have the mortgage null and void, due to some past basement possible leakage if you watered the lawn closer than 4 feet to the house. It got shut down, as we had already fixed the possible issue from experience with friends and we built up a slope away from the house and added an eavestrough that hadn't existed when we bought the house. We lucked out, but a lot of people didn't, and couldn't close their deals because the realtor or owner was aware of the possible boom. Whew..
This can be avoided very very easily, Buy the Land first for your new home then contract a builder, don't let them own the land you are building on. This will prevent them from being able to do this.
Yeah this needs to go to court, Civil contracts go so far, I am wondering though if there can be Criminal accountability for this, as this sounds like a scam.
It’s easy to have tens of thousands of dollars to buy the land first? Lol
@@dcast777 If you can get a $600k mortgage, you can get a $650k mortgage to buy the land first.
@@dcast777
If you cannot afford to buy the land, how do you expect to pay for a house on top of it‽
Building a home on your own land will cost a lot more than going through a development. They are buying materials at a discount compared to what you will be getting. There are also contractors that will double dip in payments costing you more as well. Recently while watching a real estate show they talked about this very thing. He estimated that he paid 50% extra for his house through the extra cost of materials and his builder double dipping when contracting out work.
He pretty much said that if you are not planning on handling all the subcontracting get ready for a hefty bill.
@@Azsunes Materials have zero to do with land ownership. Developments do not store materials they buy them as owners become available. Its true if they are building an entire development at once but not at 1 house at a time.
I spent 13 years working for general contractors, none of them would have done this. We didn’t advertise, never needed to. Listen to the line “ the builders parent company “ our housing market is being overtaken by huge investment groups.
These clauses should be 100% illegal.
The family should move in anyway and become squatters. Then drag out eviction in the courts to wear out the builder until they relent. That's been working in other Steve Lehto videos.
Builders are able to do this an get away wit it because Biden an the Democrats don't give a s*** they know it's happening but bottom line they don't give a shot and this is more rampant in certain parts of America but believe me it happens in every single state
Nice I like it.
Read your contracts everyone! We've all gotten so used to signing without reading and it's biting everyone in the butt (well except for the scummy builders)
I recall a Dilbert comic strip where he signed a software agreement that obligated him to be an organ donor.
My ex employer wanted me to sign a new non-disclosure, anti compete and rights to all ideas while employed contract. I stalled, and when HR contacted me about not receiving my signature, I simply asked if they had used lawyers to draw up the new contract. They said "Of course!", so I said, I need time for my lawyer to review this new employment clause. On my own reading, I've noticed some clauses that cause me concern. How do I know if you haven't put a "first born" or organ donation requirement into this contract? Isn't that a reasonable request? I never signed. I was labeled a "trouble maker" and later became "redundant" and now blacklisted.
I have heard this same story multiple times in the last 2 years. The builders will face no consequences as the demand for construction is far greater than supply.
That's why they need to Name and Shame the builder so that anyone thinking of dealing with them in the future can know what kind of scumbags they're working with. Home prices are in a bubble right now. Once that bubble breaks, having a reputation (online reviews) as a scumbag will make a lot of potential customers look elsewhere. Hopefully, enough to bankrupt the builder.
I've heard of this happening. About 5-8 years ago, there was an article about a builder doing this to an entire neighborhood that he built.
Sadly, this is a standard clause in homebuilding contracts. It has and will continue be used in a predatory manner until it is addressed via legislation.
It's a great idea to get the government involved in every private contract ever! I assume you want to sit in a nice Alligator chair while reviewing the agreements of the peasants in a multi-billion-dollar brutalist office building.
"It's a great idea to get the government involved in every private contract ever!"
If the government wasn't involved it wouldn't be a contract. The government already restricts "every private contract ever" from having/enforcing some unconscionable clauses. Policy is put in place to run a society sensibly and these builders are causing problems.
@@garyschoolcraft587
Absolutely BS. Contracts can and were enforced by the people writing them, it's the state that doesn't allow them to do so today. The state can't even properly interpret the second amendment, and you want the state to judge the constitutionality of private contracts? No thanks.
You're just defending the state's monopoly on violence without proving a good enough reason to why they should even have that power to begin with. Sure, some people will make really STUPID contracts. However, people should be FREE to enter even unconstitutional contracts if they are fully aware that they are signing away their rights.
Stupid people will get taken advantage of one way or another, it's just best if they get taken advantage of by individuals with limited enforcement power rather than the state.
@@henlofren7321 Are you going to shoot the home builder then? Is the home builder going to shoot you for giving them too little money?
If you are saying “no” to either of those, then you are assuming that you can use the “government” to enforce your contract because you and the home builder can take each other to court.
@@evannibbe9375
I've been scammed by a few businesses before, and I made sure to cause at least proportional harm to them. I wouldn't take it as far as murder unless there were many other victims who also wanted them dead, or if my life was basically over as a result from the scam.
If you answer "no" to your questions, you shouldn't even be alive. People will walk all over you and take your stuff as the state loses power.
When we built our current home in Texas, 17 years ago, our lawyer told us that even if it is not in the contract, it is part of the Texas laws that had been updated a couple of years prior. When it came time to put down the earnest money, I was very hesitant and in a meeting with our realtor and builder I raised this question. Our realtor said "Well I don't know who your attorney is but he's got to be wrong". But the builder's sales rep nodded it was in fact true. It's called the "buyer's an asshole loophole". I had to trust that I could pass over that earnest money check, and the builder would actually perform. It worked out for us. But it could have easily been different. The sales rep could literally have taken the check, put it into his desk and then hand me a paper saying, Sorry but we've decided to cancel the contract. And thank you for your $xx,000.
This is where I would have no issue if some one took vigilante justice against the builder.
Some nasty muggers out there..
just saying..
The rule of thumb, if they set a closing date and they want to push the date, tell them No, we have an agreement to close, so we will close and you can do the work after we close!
These kind of transactions/contracts need to be regulated with protections for consumers guaranteed.
In America, we're entitled to as much justice as we can afford.
This is why I would always try to build on property I already own... this is advice from my parents.
I’m wondering how contracts like this are legal. It’s literally theft if the people don’t get whatever they put in back. Companies doing this sounds like fraud was made legal.
sounds like state legislators need to step up and make some laws against this kind of thing like they do other industries that do manipulative practices in their business dealings
Why would someone choose more government intervention into their contracts and lives?
@@DerykRobosson some people insist their lives would be wonderful if only the government made more laws to protect them. I've never been able to understand the logic, but this is obviously a common thought process.
@@DerykRobosson believe me I'm not for more government but if the government will stand by and allow a person to be taken advantage of and not protect the consumer then why do we even have speed limits why do we have airbags why do car manufacturers need to put seat belts in why do we met and then date seat belts to protect people why have a police department if there isn't a purpose of the government to protect people let's just all carry guns and protect ourselves and then just let everybody be the wild west when it comes to contracts. I think the legislation should be extremely simple and not overly complex it should simply say either both people can back out for any reason and neither party can enforce their will on the other people with any kind of bullying or they're both tied to the contract where the other person has to default it's as simple as that doesn't have to be overreaching doesn't need to be thousands of pages matter of fact you could have one contract law that applies to all business contracts they must be mutually beneficial if anybody can cancel at any time for any reason then both parties must be able to do so
@@hewhohasnoidentity4377 why would people not appeal the the authority in charge of enforcing laws? or is it you think anarchy is better?
Yeah! There should be a law that forces people to read! lol
I have never heard of this happening in the UK but this may be due to the Unfair Contract Terms Directive (93/13/EEC) which protects consumers against unfair standard contract terms imposed by traders. Is there nothing similar in the US?
This likely happens very frequently in the Austin Texas area! Several of my friends whom are renting have seen increases of 30% in just a few months just to keep a crap apartment! I can only imagine how the builders of new homes are trying to screw people.
That has nothing to do with this. Prices are going up because of demand. That is independent of builder's carrying out shady practices to make a fast buck.
@@ryanroberts1104 When Corporations and the rich own all the homes, serfs are made! Corporations buying up a necessity is indeed a part of greed. Huge corporations are buying properties across the United States. This skews the fair market value to whatever the masters want! One of my friends rent went from $850 a month to $1350 for the same place! So many did not sign a new lease, that the property decided they would tear down and rebuild new apartments in a city that no one making under $75k a year can afford. Average being $1700+ .
Let that sink in 160 homes under contract.
They're looking to make $300,000 off of these people because a convenience clause.
How much are they going to make with that 160 homes.
I'd say that's fraud of the consumers.
Words travel fast in a small town. I hope this builder never gets another job.
Builder did this to a friend of mine. Literally less than a week before closing. They wanted $50k more from him.
I'm surprised that no one is looking to make things like this illegal especially in this time of day with how the economy is like atm
How is this not a case of detrimental reliance? The terms of the contract are obviously unconscionable. It puts way too much risk on one party without consideration. The company also held their money as a deposit and made communications to compel the family to sell their original home.
So in other words, their contracts says "we will build you this house for this price, but if we can sell it for more before closing you'll be shit out of luck"
Pretty much. There was a story about 5-8 years ago about a builder who did this with a newly developed neighborhood. Every home on the street was built under this type of contract and the builder exercised the clause on each one of them without even having new buyers lined up. It was obvious that it was his plan the entire time, but due to the contracts, nothing could be done.
Correction: and we use your money to do so!
@@ryanroberts1104 The bank finances it, the builder uses the down payment to cover interest, and the promise to mortgage from the buyer to help secure the loan from the bank. It also lowers their exposure to risk in the process.
" without any assurance they can actually have the new house" I'm not sure this is actually the case, and a lot of any potential legal case is going to revolve around that.
Yeah, I'd make a 'Good Faith' moral clause in all contracts as part of actual legal evaluation.
Whether or not the underlying contract terms were legal, if the contract was executed in good faith, a reasonable interpretation made of the competency of the party evaluating it would stipulate the effective terms. I.e. an average person buying something on contract, and told by the Salesman that it will do XYZ for ABC, and then it does none of that, even if the contract stated something different buried in it, the company would be bound to honor what the Salesman had promised, as otherwise THEY did not execute it in Good Faith.
Ideally we would then feed the Salesman to the Crocodiles.
Crummy situation. Bummer they did not have the contract reviewed before signing it.
What is the benefit of the builder having a buyer on the hook with a contract? Financing for the builder?
Yes.
My dad used to be a small scale developer, he'd build one home at a time and manage things himself. Having a buyer on the hook for buying the completed home makes it a lot easier to get financing for the project, as the bank knows that the house will sell within a reasonable time of the expected closing date at or near the agreed upon price. This means that the bank knows that the contractor is going to have the money to pay back the loan. They may be willing to offer better financing options for the developer or financing when they might not otherwise be willing due to saturation of the market or having other developers that they could be loaning money to.
It wouldn't surprise me if there was 3rd party interference, prompting the forced sale of the original home and the subsequent termination of the contract.
The family --or members of it--should move in tonight and squat, claiming it as their own and let the builder evict them.
first it was all the crappy Lenders in 2008 crash. now its corporation's buying the houses so people can't establish Homestead. Pathetic how people want to get rich...
Every contract should be required to have a synopsis that highlights all the major points like this in everyday language that people can understand. They purposefully write them in a way that they know things will be hidden or not able to be understood. Yes, you can have a lawyer read it for you but that doesn't change the fact that they are taking advantage of people intentionally.
It sounds like they were in escrow with a closing date. In some states that would imply a new contract where perhaps that clause in the building contract would no longer apply.
I would think "undue enrichment at someone else's expense " would apply. It worked against me when i bought a house at sheriffs auction for less than the appraised value. In that case the bank had even requested a no minimum bid auction. 9 months later they took the house from me and gave it back to the bank claiming undue enrichment. I was left me hold the bag for the taxes i had paid ($1000) and $4500 in lawyer fees. I won at house at auction, didn't get to keep it and was out $5500.00. We have a wonderful legal system in Preble county Ohio. Crooked as the day is long.
Tell the family to hang tight, prices in the Texas area are looking to fall 30 to 40% in value. Don’t worry help is on The Way
I'm not a lawyer, but I think you would be able to find a judge who's sympathetic with the buyer due to how everything went down. "hey we need to move closing a week" then cancel the next day? That sounds like they already intended to cancel but wanted time to finish paperwork with another buyer.
Sure would be a shame if that house suddenly was uninhabitable, karma has a way of making that happen.
Sympathy has nothing to do with it and yes your not a lawyer.
Judges don't give a crap about hurt feelings when you sign a contract and doubling down by destroying property that isn't legally yours is just great advice overall.
@@sws212 oh I'm not saying they should cause damage to the home but Texas has some nasty natural events. And yes judges don't care about hurt feelings but like Mr Leto said a judge could find the actions of the builder to be unconscionable as it seems pretty obvious that the builder acted in bad faith.
"That sounds like they already intended to cancel but wanted time to finish paperwork with another buyer. "
Yeah, but you are going to need some proof of that....
@@Ka_Gg If the new buyer has an offer accepted prior to this when discovery takes place, that then is proof, or even just phone calls to the builder or realtor about this prior to the date.
Ah yes. "Sell your house or we won't on your new one!".
"What, you really wanted to move in? Well to bad, you won't. But I can point you to a nice bridge to sleep under!"
Somebody needs to do something about this but I don't know who.
The name of that Contracting Company needs to be made public, and about how they do business. In a world of buyer beware, that can be considered unfair trade practice.
That's how someone could lose his life for "Convenience"
Even if they were allowed to cancel that should not be allowed after effectively forcing the sale of the old house, at that point there is no going back since one side has completed a major obligation.
It sounds like the only "solution" is to make sure everyone knows what happened so that no one will ever work with that builder or its parent company again. What were their names? Spread the word.
@@ryanroberts1104 Yeah, the current seller's market is about to drop like a rock.
People refuse to deal with unethical shitheads all the time. The builder OUGHT to be worried about their name getting out in this one.
As they say Buyer Beware but this builder has generated so much negative publicity they'll regret this decision.
Ben playing peek a boo over the top of the ZAGS FAN plate, Steve's RHS
This has happened in Toronto recently, where the builder is cancelling deposits and/or demanding more money for their house.
I'm beginning to think the delays were intentional.
Sounds like the builder's lawyer needs to be disbarred.
And the builder needs to be driven out of the business *permanently.*
Real estate is so hot in DFW I can see companies trying to take advantage of desperate people.
Whilst I am not legally trained I can see a potential problem for the builder in as much that he requested/demanded, in writing, that the purchasers sell their existing property before he would progress any further with the new build. The purchases complied with this condition/demand therefore by doing so triggered the new build contract by that action.
@@ryanroberts1104 I may be dense but until a contract is tested in court as to its fairness and reasonableness as to a consumers rights it is not a foregone conclusion as to a contracts enforcable legality.
The funny part for me is that the construction schedule was contingent upon the buyer selling their house…. Seems to me the when the buyer put their up up for sale then the closing should have been contingent upon the closing of the new house.
the market is so crazy here n N Texas that there are several builders that have stopped listing the property till they get final occupancy. They then will auction the house and highest bidder has 7 days to close. It is completely nuts right now...
Could the contract terms like that be declared against the public interest.
It would be better to strike out that clause and have the builder initial it.
@@ryanroberts1104 Because they want to build you a house. They would claim that "they almost never have to enforce that contract provision" to which you should respond "so let's just strike it out." All terms of a contract are negotiable. If you aren't happy, find another builder.
I might argue that the builder saying the buyer had to sell their previous house first, created a reliance that they could not then back out of.
Got to read those construction contracts! Easy way to prevent this is to build on YOUR property.
I'm sure there are plenty of ways to get screwed, building on your own property, if you don't READ the contract. Subject for a future video.
It'd be a real shame is this house mysteriously burned down.
Thanks for your many excellent videos. Didn't the contractor actually hold a gun to the buyers' heads due to the insistence that the buyer sell their previous home by a certain date? Was that specifically allowed in the contract? It isn't clear from your presentation.
Sure sounded like it and that is part of the lawsuit he said
Hopefully that builder gets caught out by the rising interest rates and housing price crash before they are able to sell the house.
If that ever happens to some people I know, there may be a strange and unexplained all-consuming conflagration at the building site soon afterwards…..
Having been in the building trades before, I would say you are right. But likely due to unpaid tradesmen, because it has been my experience that if they are shady, they are shady with everyone. After threatening to torch a home I worked on in order to get paid what I was owed, I decided that life wasn't for me and went into law enforcement.
Ex coworker of mine was in one of these, where the developer would build you a semi custom house on a lot, and once complete you would take ownership. Part way through the project, he wanted to add some lights to a room, and tried to sweet talk (Or demand) the electrician add in the extra lights. The electrician refused to do it, unless it was in writing, and added to a change of contract. This guy decided to add the lights in himself. When the permit walkthrough took place, the electrician took great care to point out to the inspector the work that was not his. Ex coworker ended up in a breach of contract, and almost lost his investment into the project. He ended up having to shell out $30,000 more to smooth things over, when all he probably had to do is add less then $1000 for the extra lights.
I hope there's an update video on this one!!! That's some dirty shit. I hate when people take advantage of people who don't know any better. These people are just excited to get their house, why the hell should they be expected to assume the seller is gonna screw them? I mean, of course, most everyone watching Steve's videos will be distrusting of any contract, but the average person isn't going to think someone's goal is to screw them over. 😡 Hopefully a judge will step in and see how one sided this shit is and do something. But I suspect that Steve is right, a judge will probably be thinking of his huge case load and say "sorry, bro, you signed it...."