can a builder increase the price of home after a purchase agreement contract is signed?
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can a builder increase the price of home after a purchase agreement contract is signed?
We signed a purchase agreement to have a new home built on 6/28 2016 for
234,000. The lot was not ready to build on then and we knew it. It is now ready
to build on and it is 12/9/2016. Now the builder says the price has gone up 5200
due to building expenses increases. and says we must pay the price increase. My
question is, does the builder have the right to increase the home price and
expect us pay it? There is nothing in the purchase agreement contract that
states how long this contract is valid for and nothing that says the builder has
the right to pass cost increases on to us.
Asked on December 10, 2016 under Real Estate Law, Nebraska
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
A contract is enforceable: if there was a contracted price, the builder must honor it even if prices increases increase his cost or decrease his profit, unless 1) the contract specifically states that certain increases or costs may be passed on to you, in which case the builder can pass them along in strict accordance with the contracts' terms; or 2) the contract did expire and is no longer in effect--though if that's the case, while they could now quote you a higher price (since they are not bound by the contract), you could walk away and not buy (if you are no longer bound by the contract). But if the contract is in effect and has no clause or provision to increase the price, the builder has to honor the price you'd been given--and can sue the builder for breach of contract if the don't comply.
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