Getting paid and remedy ?

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celtic

celtic

Senior Member
Location
NJ
Here's the story...RE sale, closing on 7/11/05. Property has multiple code violations that will not pass NJ's CO requirements.
While talking to the HO, he wondered "Can I pay you after the closing?" I skirted the question and gave a "non-answer". My concern is that after the closing, when he no longer owns this property - and has yet to locate a new home - what are my recourses and remedies if he should fail to pay? Would accepting a post dated check be satisfactory? Would it be better to have the payment cut directly from the proceeds and forwarded to me via the closing atty(s)?
This an unusual situation for me to be in.
 
Re: Getting paid and remedy ?

How much money are we talking about? If it's a lot I would have the Attorney cut you a check at the closing with the amount deducted from the sellers profit on the sale. Or have the money put into an escrow account. A post dated check could be a worthless piece of paper and without a property to attach a lien to you get caught up in a legal abyss. Now if the amount is small maybe you could cut the guy some slack and wait until after the sale.
 
Re: Getting paid and remedy ?

I'd go for the post-dated check for one simple reason. In my state it's a felony to write a bad check for more than 200 bucks. That looms pretty heavy over the person writing the check.
 
Re: Getting paid and remedy ?

Originally posted by infinity:
How much money are we talking about? If it's a lot I would have the Attorney cut you a check at the closing with the amount deducted from the sellers profit on the sale. Or have the money put into an escrow account.
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Not a lot ~ $2300 total. I am meeting with one of the REAs later, she will have the atty info available for me.

Originally posted by infinity:

A post dated check could be a worthless piece of paper and without a property to attach a lien to you get caught up in a legal abyss.
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Not the answer I was looking for. I figured the post-dated check would help, as there is/will be no property to attach a lein to.


Originally posted by infinity:
Now if the amount is small maybe you could cut the guy some slack and wait until after the sale.
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I could do this...I am not overly concerned about not getting paid - but I prefer to not play banker.

Thanks for input infinity
 
Re: Getting paid and remedy ?

Originally posted by mdshunk:
I'd go for the post-dated check for one simple reason. In my state it's a felony ...
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That was my thought process (I do not know the dollar value to felony ratio here in NJ).

The payment is 50/50...so a Spalding in the amount of $1150 could be a problem for the HO.

I do not feel the HO will be a problem, but I do not see the need for me to be banker.

Thanks md
 
Re: Getting paid and remedy ?

I'd go for the post-dated check for one simple reason. In my state it's a felony to write a bad check for more than 200 bucks. That looms pretty heavy over the person writing the check.
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Felony or not what Celtic is trying to avoid is any complications at all. I agree that having that potential charge hanging over your head should make you avoid the possibility. But if for some reason you don't get paid, the time, effort and money involved to get back $1150 might not be cost effective. If you could easily eliminate any potential problems than you should. The definition of easily may be the hard part.
 
Re: Getting paid and remedy ?

I think if I had a choice,I would show up at the closing with my hand out.I have had a couple of people bounce checks and to me they didn't seem scared about repercussions and since this guy will be floating around with no residence "whats that about" it could be a risk.It would be nice if the guy wrote a postdated check and everything went fine.I like to find the good in people but I know some people out there would not hesitate for a minute to try to beat you out of two grand.
 
Re: Getting paid and remedy ?

Spoke to the REA...final payment will be made at closing table with funds directly from owner's proceeds (aka, a check at the table for me).

Thanks guys.
 
Re: Getting paid and remedy ?

Unless it's truly an emergency job, when someone comes up with post dated checks I get very leery as to the ability to pay. Add the fact that this person will be moving to location unknown, I think this is risky business.

For something like this I would charge a minimum 50% down before ANY work begins. The other option I would have would be the realtor's attorney writes up something that I get paid at closing, with interest of course.
 
Re: Getting paid and remedy ?

Originally posted by stud696981:


For something like this I would charge a minimum 50% down before ANY work begins. The other option I would have would be the realtor's attorney writes up something that I get paid at closing, with interest of course.
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The terms are 50% at signing...50% on or before 7/11/05 (the date of closing). I did NOT write the terms as "On or before the closing date of 7/11/05" (or similar language). If the closing is delayed for some reason, it shouldn't hold up my payment (unless, of course, I am the reason for the delay).
As far as interest goes...for 3/4 days it's neglible. The job will take 27 man-hours - including the inspection (I know the inspect. and can arrange the inspect. time to free up the rest of my day). I really don't feel like doing the math on $1100 @ xx% per diem for a couple days.

The REA has assured me that payment will made at the table...FWIW, this particular REA is MY REA and we have done close to a million in RE transactions in the past two years( I dabble in RE investing) - we have worked together for the past 8 years. I do trust her....and just came home from one of her kid's graduation parties.
:)
 
Re: Getting paid and remedy ?

Originally posted by celtic:
Originally posted by stud696981:
[qb]
The REA has assured me that payment will made at the table...FWIW, this particular REA is MY REA and we have done close to a million in RE transactions in the past two years( I dabble in RE investing) - we have worked together for the past 8 years. I do trust her....and just came home from one of her kid's graduation parties.
:)
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on the face of it, it seems like you are well covered. however, i am troubled by what appears to be the serious conflict of interest the attorney has engaged in.
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Re: Getting paid and remedy ?

In the future--payment due at closing. The attorney or Title Comapny will list the check on the closing statement. You can also have the attorney escrow the funds, to be paid at time of completion.
This is something we do often. No problems.
 
Re: Getting paid and remedy ?

Originally posted by petersonra:
i am troubled by what appears to be the serious conflict of interest the attorney has engaged in.
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:confused: :confused:
How so? I do not see the conflict?
 
Re: Getting paid and remedy ?

Originally posted by celtic:
Originally posted by petersonra:
i am troubled by what appears to be the serious conflict of interest the attorney has engaged in.
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:confused: :confused:
How so? I do not see the conflict?
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It appears this attorney is giving advice to both parties of a transaction. That is highly unethical for an attorney. Her response should have been for you to seek advice elsewhere since she is already engaged in this matter.

It may seem like a minor thing at this point (and it probably is), but if something goes awry she will be representing the guy that paid her to work on the matter and not you.
 
Re: Getting paid and remedy ?

Originally posted by petersonra:
It appears this attorney is giving advice to both parties of a transaction.
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CLARIFICATION:
REA = Real Estate Agent
atty = attorney

as in:
I am meeting with one of the REAs later, she will have the atty info available for me.
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This REA(my REA) is NOT a party to the transaction, she is an agent in the office that is representing the seller - but she is not the listing agent or involved in any way...another REA is "making the sale".

I do NOT believe I ever stated that.

I DO see your point, petersonra.

FWIW, my REA's husband is an EC. Using him would be a conflict.
 
Re: Getting paid and remedy ?

One word of caution.While check at closing will normally be fine ,do not forget that some deals fall thru even in the last 24 hours.Should this happen then there will be no check.A lien must be filed within so many days to protect you.So if the work and closing all fall within maybe a week then no problem.If sale goes south then so does the chance of owner paying you.

Closings do not always go smooth.I have sold and bought a lot of property in last 30 years.Been there,seen movie,read book,have t shirt.Good luck on this one.Get something in writing to use should it go to court.Have it include intrest and legal fees.
 
Re: Getting paid and remedy ?

Originally posted by petersonra: It appears this attorney is giving advice to both parties of a transaction. That is highly unethical for an attorney.
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Not in the world of Real Estate. I was told (by a RE attorney, FWIW) that RE is the only place within the practice of law that a single attorney can represent both parties. I have no facts or supporting evidence to offer, but it does make sense to me. That is because the parties are not in any way adversarial. By the time you get to closing, all agreements have been reached, and there is not need to have opposing attorneys argue their separate cases to a judge or jury. The only role of the attorney is to ensure the proper, legal processes are followed and that the paperwork is correctly handled.

That being said, I have also been advised that it would be in my best interests to hire my own attorney, whether I am the seller or the buyer. That also makes sense, if only on the basis of ?just in case something goes wrong.?
 
Re: Getting paid and remedy ?

The world of RE transactions is a strange place...I recall a house I put a bid on only to have the seller's atty counter that another higher offer had been recieved. I asked my atty if it was legal for the other side to claim another higher offer was presented when in fact NO offer had been made. My atty said "yes" and when I pressed for further information, I was told "..it's called business..".
Strange world in RE - it is truly a game.
 
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