My question involves real estate located in the State of: North Carolina
Hi guys,
I'd like to resolve a situation that has been dragging on for 2 years now, in large part due to me not knowing the law, feeling uneasy about it, and choosing to wait and hope the situation resolved itself, which obviously has not happened. I'm now ready to get this resolved and would greatly appreciate your guidance in helping me do that.
Background:
2 years ago, I purchased a house for the first time, and during inspection some serious issues were found. The seller agreed to deduct about $15k from her closing proceeds in order to pay for repairs to the house based on a written quote that a contractor provided. At closing, my closing attorney then provided me with checks written out to the contractor. I asked that they be divided into 3 payments, about $5k each, so that I could pay the contractor gradually as work was completed. In the interim, my attorney was holding the $15k funds.
During closing my closing attorney said that since I didn't enter into an escrow agreement for the funds with her, she would not re-cut the checks should something happen to them. In retrospect I should have pushed harder for a different answer but I hoped for the best and thought it simply wouldn't come to that. I also didn't take my attorney seriously because in effect what she was saying was that she would be keeping money that was not hers.
Fast forward about a year, and the contractor to whom the funds are written out to has proven to be unreliable. He has completed part of the work, for which I have paid him one check, but 2 more checks, about $10k, remain. He was going through some serious personal things and had become increasingly unresponsive over an extended period of time.
My next step was to approach my closing attorney to get the checks re-issued - this was in the fall of 2017. Initially the paralegal/secretary told me not to call back because my attorney refused to speak to me on this matter. After a more direct call, I got an in-person meeting with my attorney and her firm's senior partner. The senior partner agreed to re-issue the checks directly to me if I could get approval from my loan provider. They also said that approval from the seller would be needed but that they would handle this part once I got approval from the loan provider.
A few months later, after lots of red tape, my loan provider sent a formal letter to me and my closing attorney approving the re-issue of the checks directly to me. My attorney was satisfied with the letter and proceeded to contact the seller to get her approval.
Fast forward another 4 months to present day, and after multiple follow-ups with my attorney, the checks have still not been re-issued. My attorney has been unable to receive a response from the seller. If I had to guess, the seller is ignoring the request to spite me. She was obviously unhappy to pay $15k out of closing but agreed to because she knew the severity of the issues that the inspector had uncovered. I was confused about why there was a need for the seller's approval, so I emailed my attorney for an explanation and received the response below:
"I am currently researching next steps if the seller does not consent. However, as I have explained to you previously, all parties to the closing statement would need to agree in order for me to re-cut these checks. I have already disbursed funds in accordance with a closing statement and do not have the authority to unilaterally change that. These funds are not your "closing proceeds," but instead were deducted from the seller's proceeds because she agreed to pay the contractor for certain repairs to the house in accordance with a written quote. As you know, you did not enter into an escrow agreement with me and your seller governing these funds, and I previously warned you that if the contractor did not complete the repairs as outlined, you would be in a tough position because I would not be able to re-cut the checks.
At this point, I am waiting to hear from the seller as to her decision and will let you know once she gets back with me about that."
To sum it all up, the present situation is completely unacceptable and the explanation above cannot possibly be legally valid. It means that my attorney has the right to keep the funds indefinitely if the seller chooses not to cooperate. The response above from my attorney happened over a month ago and I have not heard back since then. I sent her a short follow-up email asking for an update 2 weeks ago without a response. I'm hoping to respond to her more forcefully showing that I have researched the situation and understand my rights. Thank you in advance for your help.
Hi guys,
I'd like to resolve a situation that has been dragging on for 2 years now, in large part due to me not knowing the law, feeling uneasy about it, and choosing to wait and hope the situation resolved itself, which obviously has not happened. I'm now ready to get this resolved and would greatly appreciate your guidance in helping me do that.
Background:
2 years ago, I purchased a house for the first time, and during inspection some serious issues were found. The seller agreed to deduct about $15k from her closing proceeds in order to pay for repairs to the house based on a written quote that a contractor provided. At closing, my closing attorney then provided me with checks written out to the contractor. I asked that they be divided into 3 payments, about $5k each, so that I could pay the contractor gradually as work was completed. In the interim, my attorney was holding the $15k funds.
During closing my closing attorney said that since I didn't enter into an escrow agreement for the funds with her, she would not re-cut the checks should something happen to them. In retrospect I should have pushed harder for a different answer but I hoped for the best and thought it simply wouldn't come to that. I also didn't take my attorney seriously because in effect what she was saying was that she would be keeping money that was not hers.
Fast forward about a year, and the contractor to whom the funds are written out to has proven to be unreliable. He has completed part of the work, for which I have paid him one check, but 2 more checks, about $10k, remain. He was going through some serious personal things and had become increasingly unresponsive over an extended period of time.
My next step was to approach my closing attorney to get the checks re-issued - this was in the fall of 2017. Initially the paralegal/secretary told me not to call back because my attorney refused to speak to me on this matter. After a more direct call, I got an in-person meeting with my attorney and her firm's senior partner. The senior partner agreed to re-issue the checks directly to me if I could get approval from my loan provider. They also said that approval from the seller would be needed but that they would handle this part once I got approval from the loan provider.
A few months later, after lots of red tape, my loan provider sent a formal letter to me and my closing attorney approving the re-issue of the checks directly to me. My attorney was satisfied with the letter and proceeded to contact the seller to get her approval.
Fast forward another 4 months to present day, and after multiple follow-ups with my attorney, the checks have still not been re-issued. My attorney has been unable to receive a response from the seller. If I had to guess, the seller is ignoring the request to spite me. She was obviously unhappy to pay $15k out of closing but agreed to because she knew the severity of the issues that the inspector had uncovered. I was confused about why there was a need for the seller's approval, so I emailed my attorney for an explanation and received the response below:
"I am currently researching next steps if the seller does not consent. However, as I have explained to you previously, all parties to the closing statement would need to agree in order for me to re-cut these checks. I have already disbursed funds in accordance with a closing statement and do not have the authority to unilaterally change that. These funds are not your "closing proceeds," but instead were deducted from the seller's proceeds because she agreed to pay the contractor for certain repairs to the house in accordance with a written quote. As you know, you did not enter into an escrow agreement with me and your seller governing these funds, and I previously warned you that if the contractor did not complete the repairs as outlined, you would be in a tough position because I would not be able to re-cut the checks.
At this point, I am waiting to hear from the seller as to her decision and will let you know once she gets back with me about that."
To sum it all up, the present situation is completely unacceptable and the explanation above cannot possibly be legally valid. It means that my attorney has the right to keep the funds indefinitely if the seller chooses not to cooperate. The response above from my attorney happened over a month ago and I have not heard back since then. I sent her a short follow-up email asking for an update 2 weeks ago without a response. I'm hoping to respond to her more forcefully showing that I have researched the situation and understand my rights. Thank you in advance for your help.
Closings and Escrow: How to Release Funds for Home Repairs to Me
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