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Seller offering floor covering allowance for another purpose Tennessee

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  • Seller offering floor covering allowance for another purpose Tennessee

    I have a close friend who sold a house last Fall to a friend's son-in-law for what I considered a very cut rate price (waterfront property that appraised for much more than selling price). As a condition of sale, my friends offered a carpet replacement allowance of $5000 to the buyers since carpet was bad and had a burn spot by fireplace. Since the stipulation was for carpet only, meaning if they decided they wanted hardwood instead, then the allowance would not be paid based upon the fact even if carpet was A-1, they still would've torn it up for hardwoods. Owners chose hardwoods over carpet so allowance wasn't paid. Fast forward past Winter into early Spring. New owners called stating their water pipes burst and had wondered if my friends had experienced it before. The short is that at no time had my friends experienced burst pipes in the Winter. Feeling bad for the plight of the new owners, my friends offered the refused $5000 allowance to be used toward repair of plumbing or whatever they felt the need to use it for. Basically, they said they could come by their house and pick up a $5000 check and go their merry way. These buyers have all of a sudden wanted a meeting to 'discuss' issues with the sellers (my friends) and I'm afraid they're fixing to try to extort more out of them with threat of lawsuit. My questions are, can offering this goodwill gesture be perceived, by law, as an admittance of known defects that were not disclosed at time of sale (guilt offering)? Should my friends have them sign a waiver prepared by a lawyer stating that the $5000 payment is a goodwill gesture only and not to be construed as an admission that an undisclosed defect existed at the time of sale? I'm thinking the offer of the $5000 carpet allowance to be used for another purpose is a giant can of worms being opened.

  • #2
    No one here can predict the course of a lawsuit and how any actions might be interpreted, but if your friends offer the purchasers money they would be very smart to get the purchasers to execute a waiver.
    I am not able to respond to private messages. Thanks!

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    • #3
      I think their best bet is to get a "waiver" from purchasers for any money given the purchasers. If they don't know how to prepare one, get a lawyer's help so that they are protected. Always get requirements/agreements in writing & signed.
      Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

      Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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      • #4
        I've heard of offering an allowance toward new flooring (or paint or whatever) but not one that was conditional on the type of material used. That is the whole purpose of an allowance. Otherwise, the seller would just replace it pre-sale. The allowance offsets the cost but if the new owner wants Persian rugs, they pay for anything over the allowance. If this is in writing, I would have your friends consult an attorney as they may need to cough up the dough. If the sellers were less than honest in the disclosure statement, they really should consult with counsel.
        I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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        • #5
          Thanks, ElleMD. Apparently since it was listed specifically as 'carpet allowance' instead of 'home repair' or 'floor covering', it was deemed they did not have to pay it for hardwood floors. My friends openly offered the allowance a couple months ago that they didn't get for the carpet, to use for anything else they needed it for. Now the buyers want to meet to discuss things. I'm saying, 'What is there to discuss? A deal is a deal.'

          I agree with Betty3 and Marketeer. I think it's in their best interest to get a waiver so the buyers don't think it's an open bank for them to extort money from every time something happens. I don't blame the buyers from wanting to get the money. If someone offered me the $5000 several months after close, I'd go for it, too. But, the meeting is later this week. We'll see what there is to discuss.

          Comment


          • #6
            Calling it "carpet allowance" isn't the determining factor. The carpets had to be replaced regardless so what replaced them is immaterial. Either way, there is no way any of us know what the buyers hope to accomplish at the meeting. I wouldn't automatically assume extortion. They will have to wait and see but I'd be surprised if they don't owe the allowance if it is written into the agreement. What it is used for really isn't their concern.
            I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

            Comment


            • #7
              Well, it was a whole lot worse than I even expected. The buyers insisted my friend did not disclose problems with the property before sale and threatened him with litigation if he did not pay $30,000. He said, "If you don't settle with me today, I'll get what you got and you can bank on it." The buyers impressed when they bought that they were going to raze the house and rebuild on the property and my friend sold him that property for more than $200,000 UNDER appraised value because he was friends with the lady's father, who happened to be the pastor at a church he used to attend. This is why the original allowance was declined because the plans were to tear down the home. The home was obviously plagued with troubles and you'd have to be an idiot not to know. I'd been there. I would've torn it down to the ground if it was mine. But, the buyers had a second thought and decided to keep the house, fix it up and flip the property. When they got a termite inspector at the house, which they initially declined because it apparently didn't matter then, it was found to have damage.

              The real estate lady and the closing attorney insisted that he not pay, that there was never in precedent that was set that he'd have to pay, but he is 85 years old and in ill health, so he didn't want the pressure associated with a lawsuit, so he reasoned it would be best to dispose of the issue by paying the money. I don't agree that he should've paid BUT I understand why he did it. The biggest problem I have is the betrayal of confidential info my friend apparently told the buyer's father-in-law (the pastor) concerning his health and such info was relayed to the son-in-law as a tool to use against him (he KNEW he'd give in, etc.).

              It's unfortunately done. A waiver was signed guaranteeing he'd never come back. At least he took that part of my advice.
              Last edited by fenceline; 07-28-2014, 06:57 AM.

              Comment


              • #8
                If your friend fully disclosed everything and was steamrollered into paying money to avoid litigation, it is sad. Unfortunately, there are people who do things like that.
                David K. Staub (www.illinoisbusinessattorney.com)
                Forum posts are not legal advice, are for informational and educational purposes only, and are not a substitute for proper consultation with legal counsel.

                Comment


                • #9
                  Originally posted by dkstaub View Post
                  If your friend fully disclosed everything and was steamrollered into paying money to avoid litigation, it is sad. Unfortunately, there are people who do things like that.
                  Buyer claimed they were tearing down the house. I would've torn it down, too. So buyer refused home inspection (why would you inspect a home you were tearing down?).

                  Yes, it's sad. Especially when you take into account the Pastor revealed confidential information to the son-in-law so as to get him to cave (his inability to handle pressure, past mini-strokes, etc.). If he was my father, I'd been there and he'd got nothing. Unfortunately, he only has one child that lives in close proximity to him and there's not much to say about their mental acuteness, either.

                  Comment


                  • #10
                    It sure reads like elderly seller was steamrollered and poorly advised or not represented ...or quite possibly as you post, ignored advice of legal counsel , but what's done is done ..and rewriting history is darn hard

                    ...and I suspect any violation of confidentiality with clergy is not a legal question.

                    failure of seller to,supply TN disclosure form at or before closing and or a clear written waiver of same leaves back door open to buyer to bellyache for up to one year in TN .and I suspect buyer knew this.
                    But your post is unclear if this step was omitted...

                    I too would be of view ..No....but I'm not there nor 85

                    Comment


                    • #11
                      Update

                      In spite of the fact my friend paid the 30 grand to dispose of the idiot and had a waiver signed guaranteeing all claims were settled, the buyer has decided to litigate and sue for the full purchase price of the property. Comical is what I'd call the claims he's making. Meanwhile, as the lawsuit is still in discovery mode (questions being sent back and forth between litigants, etc.), The buyer has decided to list the property for 160,000 more than he paid. We found real estate listing. My friend has procured a pretty good attorney who is having the greatest joy of watching the scumbag squirm around these explanations. The last round of questions sent by my friend's attorney went unanswered in the 30 day time frame specified so I'm sure they will move for dismissal. It's a wait and see at this point.

                      Comment

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