What rights does someone have tostill buy land if they defaulted under a purchase contract?
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What rights does someone have tostill buy land if they defaulted under a purchase contract?
I own 1 acre of land and am currently renting space for mobile homes. Approximately 4 years ago I was selling it to someone; they gave me half of what I was asking and they were was supposed to pay the balance in 1 year. They did not. This year they want to go ahead and pay the balance in increments. They want to use the rent that I have been collecting to go toward their balance. Can they legally do that? And what if I decide not to sell it to them, do I have to give back to them what they already have paid? I think that they forfeited on the first and only contract we had.
Asked on December 7, 2010 under Real Estate Law, Alabama
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
For definitive answers, you have to review--and should have an attorney review with you--the original contract of sale, the one the would-be buyer defaulted on. His or her rights will be determined under the contract. So for example, if it said the rent would be applied against the balance, it would be--but it does not say that it, it would not be. Similarly, what happens to the money they already paid in the event you choose to not go through with the sale would be based on the contract, too.
Generally--and not in reference, obviously, to your specific contract--(1) you would not apply the rent to the balance; and (2) if you decide to not sell to them after this period of time, you probably should return the money, but would be entitled to keep some reasonable amount as damages for their default and your costs thereunder (maybe 10% - 15%). But those are only general guidelines for how matters like this often work--you really need to go over the agreement carefully.
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