Reneging on deal

Discussion in 'Purchasing DVC' started by Dividends, Oct 17, 2013.

  1. Dividends

    Dividends Earning My Ears

    Joined:
    Sep 26, 2013
    Messages:
    39
    I send my deposit it goes to rofr, ( i find something better in mean time) it passes rofr, i dont want first contract anymore. If i walk from the deal i just lose my deposit? Or can seller and/or disney sue me?

    Would brokerage blacklist me if the 2nd better contract is with them?

    Thx
     
  2. Avatar

    DIS Sponsor The Official Ticket Center is Orlando’s #1 discount attraction ticket agency, selling millions of Walt Disney tickets around the world.



    to hide this adverts.
  3. geraghty

    geraghty Mouseketeer

    Joined:
    Feb 3, 2013
    Messages:
    230
    How would you know if second contract will pass rofr? If it's a better deal, you would be more likely to lose the second deal to rofr. It would be hard for the seller or Disney to sue you.
     
  4. JimMIA

    JimMIA A little Miami humor...

    Joined:
    Feb 16, 2005
    Messages:
    11,560
    You're talking about a resale transaction, so Disney would not be involved.

    The broker and/or seller could theoretically sue to try to force you to complete the transaction as you contracted to do.

    If they figure out your approach, they could also cancel the original contract and sell that out from under you, leaving you to hope for the best in getting a new contract you like better.

    Whether they actually did sue, or blacklist, or anything else is really up to them and none of us would have any idea what they might do.

    I personally would do everything above-board and focus on one contract.

    The few bucks you save on the second contract are a drop in the bucket compared to what you will spend in MFs over the life of the contract. If I were the buyer, I'd be more interested in a drama-free closing and beginning to use my points than some nominal savings that I might get (or might not) by reneging on the first contract.
     
  5. DisMatt

    DisMatt Earning My Ears

    Joined:
    Aug 29, 2013
    Messages:
    14
    I don't believe the Seller could sue you. The contract should stipulate (or at least mine did) that the seller's only recourse upon default of the buyer is the Deposit you put down when you signed the contract. My contract clearly said that the Deposit was the Seller's "sole and exclusive remedy".

    If the buyer defaulted, my contract also said that the buyer would be liable to the broker for any liquidated damages of treble (triple) the deposit, not to exceed the full commission and/or transaction fee.

    Given that, You would have to be getting a REALLY good deal on the new contract to default, I wouldn't want to lose my deposit and have to pay an additional three times the deposit to the broker just to save $5-$10 a point.
     
  6. JimMIA

    JimMIA A little Miami humor...

    Joined:
    Feb 16, 2005
    Messages:
    11,560
    Anybody can theoretically sue anyone for anything -- all it takes is one willing party and an attorney who is willing to file the case.

    In my answer above, though, I was not talking about a money-damages lawsuit, but a suit asking the court to require the buyer to go through with the transaction as agreed in the contract. I'm not an attorney, but I believe it's called a "specific performance" lawsuit.

    If the seller was successful with that kind of lawsuit, they would then be faced with the problem of enforcing the decision of the court, which would be difficult.

    IMHO, the potential costs involved to both parties make any kind of lawsuit unlikely. The seller would probably be better off moving on to a less problematic buyer.
     
  7. OKW Lover

    OKW Lover Retired and living 2 miles from The Castle. DIS Lifetime Sponsor

    Joined:
    Apr 29, 2004
    Messages:
    22,736
    Sigh. I'm really hoping the OP isn't going to renege on their commitment. Please give careful consideration to your situation before you sign a contract. Both parties are supposed to go into this (or any) deal with good faith.

    End of sermon
     
  8. Msmithmd

    Msmithmd DIS Veteran

    Joined:
    Jul 18, 2012
    Messages:
    1,173
    You would have to read your contract to purchase, to see what it specifies as potential liability if you were to back out.

    I agree with the other posters that say "just don't do it." Once you've signed and returned a contract to buy, then you are contracted to buy. So, I could see you asking to back out if you were laid off from work or had some unforeseen disaster. But finding a cheaper contract does not by any means qualify as a disaster that would ethically justify reneging on a contract, in my opinion.

    What sort of legal trouble it could cause is of course a question better answered by an attorney than by us random internet folk. :)

    If you think the current deal you have isn't a good one, then cancel the offer before you sign and return the papers. If it is a good one, then be content- and don't lose sleep if someone else posts in the ROFR thread that they got a few dollars less per point next week. By buying DVC you are making a decades-long commitment to dozens of trips. A few dollars a point isn't worth beating yourself up over. Remember what you are saving over purchasing retail!
     
  9. DizBub

    DizBub Totally Addicted

    Joined:
    Dec 9, 2010
    Messages:
    2,167
    I agree.

    Having been on the end where someone reneged on us all I can say is it stinks.
     
  10. Annielkd22222

    Annielkd22222 Mouseketeer

    Joined:
    Mar 16, 2013
    Messages:
    270
    I just had someone agree to my contract, so I took them off a few sites. I would be upset if they cancelled because they found something better. However, on my contract if the buyer cancels, they lose their deposit and I have to split it with the broker. I would be upset because they tied up my contract for a time and the going price of sales could go down more than the 5% I would get for them canceling.

    So, to answer your question, you lose your deposit, I would think the broker would possibly remember you broke the contract....but I don't think anything else would happen.
     
  11. Annielkd22222

    Annielkd22222 Mouseketeer

    Joined:
    Mar 16, 2013
    Messages:
    270
    I am hoping that doesn't happen often! Did you keep the deposit?
     
  12. francie57

    francie57 DIS Veteran

    Joined:
    Aug 24, 2008
    Messages:
    3,059
    You should keep the original contract. If you signed the papers and its gone through ROFR you have a legal contract. You had time before sending in the paperwork to change your mind - at least that is how ours worked. The one thing you need to stop doing is looking at new listings - unless you plan to buy another set of points. There will always be a listing that looks better than what you decided on. We have purchased 2 contracts for the BW and are extremely happy with the price we got them for - there are other ones out there for a little less but who cares, we got our contracts for what we wanted to pay. Time to stop looking!!
     
  13. DizBub

    DizBub Totally Addicted

    Joined:
    Dec 9, 2010
    Messages:
    2,167
    Sorry, I should have clarified, we were buyers and the sellers backed out after we had sent full payment. A total waste of time. Broker told me that the sellers were still on the hook for their commission (not sure they ever got it) and would be blocked from ever selling there again. We got all our $ back but I still regret that deal falling through.
     
  14. JimMIA

    JimMIA A little Miami humor...

    Joined:
    Feb 16, 2005
    Messages:
    11,560
    One suggestion to sellers: there is nothing sacred about a minimal deposit; you can ask for more.

    A couple of years ago, during the pre-resale restrictions buying frenzy, I got an offer from buyers located in another country. I asked TTS what my options were to protect myself against the buyer changing their mind (sometimes happens with overseas buyers because of differences in legal systems, costs of getting documents notarized, etc.).

    They suggested a $1,000 deposit, rather than the normal $500. A little more skin in the game makes it less tempting to bail out.

    Our buyer submitted the deposit as requested, we both handled the paperwork quickly like adults, and the closing went through without a hitch.

    The purpose of a deposit is to ensure performance by the buyer. The seller has a much bigger hammer over their head -- if they breach their contract, they owe the broker their 10% commission.

    A larger deposit does not increase the buyer's cost of purchase one penny, but it does provide some additional incentive to go through with the transaction as they contracted to do. If the buyer declines, that should tell you something and it's time to move on to a better buyer.
     
  15. Annielkd22222

    Annielkd22222 Mouseketeer

    Joined:
    Mar 16, 2013
    Messages:
    270
    The deposit my buyer had to pay was 10% and 1/2 of that would go to the broker. That, hopefully would cover the expenses of selling at a lower price should the market slip. Personally, I think if you sign the contract, you should stop looking. :)
     
  16. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

    Joined:
    Aug 19, 1999
    Messages:
    32,315
    IMO this is one of the few areas with timeshares where legal and ethical diverge. You have 10 days from the date you sign assuming the contract were worded correctly (it's a little more complicated but that's the idea), 1 yr if it wasn't worded correctly per state law. Within that context one could legally cancel. Outside of that you'd likely lose your deposit and could be at risk for a performance lawsuit but this rarely happens if ever it seems. However, IMO, simply to move on to another contract that is "better" without other issues such as problems with closing, missed closing deadline, etc; would simply be an unethical thing to do. While I doubt a broker would blacklist you if one did this, IMO they should. Obviously the specifics of a given situation have to be considered so my comments are to the principles involved.
     
  17. Deb & Bill

    Deb & Bill DVC-Trivia Contest, Apr-2006: Honorable Mention

    Joined:
    Mar 20, 2000
    Messages:
    44,986
    If you are buying and back out of the deal after ROFR, you lose your deposit. The deposit is shared between the seller and the agent for the lack of going through with the sale and wasting their time. If you are seller and you back out, nothing happens except they own the agent the commission.

    I had two sellers back out of one contract I was selling. I got half of each their deposit. The agent I was using said it had never happened to her before that two buyers both back out of the same contract.
     
  18. prune1977

    prune1977 DIS Veteran

    Joined:
    Oct 15, 2010
    Messages:
    520
    Same question but a little different, what if a buyer and seller has agreed upon an amount, but contract hasn't been signed or deposit sent in? One of them backs out, I guess in that case, nothing really happens except buyer starts over looking again or seller starts trying to sell again?
     
  19. Minniesgal

    Minniesgal DIS Veteran

    Joined:
    Mar 29, 2013
    Messages:
    2,427
    If there is no contract then there is no obligation to buy or sell
     
  20. JimMIA

    JimMIA A little Miami humor...

    Joined:
    Feb 16, 2005
    Messages:
    11,560
    Yes, that's correct. Either party has 10 days from signing the agreement to back out with no penalty under Florida law.
     
  21. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

    Joined:
    Aug 19, 1999
    Messages:
    32,315
    Jim, as far as I know this 10 day cancelation period only applies to the buyer.
     

Share This Page