Incompetent Title company and now I want to walk away from sale

[DVCcurious]

I need some advice. I've written a couple of times about our situation. We have a Wilderness Lodge 200 pt contract that we aren't going to use (we have a 250 BLT that we are using for our vacations and the extra 200 points is overkill). I was considering renting the points in perpetuity. I figure the IRR would be around 8%. I also could sell the contract. The VWL contract has no points coming until 2017.

I decided to list VWL the contract this summer. At the end of the summer I cut the price and it sold in about a week. We passed ROFR. That's when the problems began.

Last week I got an email with the closing documents from the Title company. The email subject is "Disney's Bay Lake Tower Resort". I saw that on my iPhone and my first thought was "***....did I list the wrong contract"? I opened up the attachment on my phone and the very first page had the resort as BLT and a contract number. I immediately responded to the email and told the Title person that we were selling VWL, not BLT.

When I got home I logged into dvcmember.com and found my contract number. It is XXXXXXX. Then I looked at the contract number on the documents sent by the Title company. They have the contract as XXXX4XXX. So now I think that they sent me documents for another transaction, maybe there is another sale going on for a BLT with that contract number and they just attached the wrong documents. But I look through and I see that it has our names as the sellers and the correct point amount of 200 points. So I email back and tell them to fix the contract number. This was last Thursday 11/3.

They sent me updated docs on Friday....this time they fixed the resort to VWL on page 1, but not on the subsequent 36 pages which still say BLT. The contract number is still XXXX4XXX. So I shoot off another email.

On Monday I get a new contract. They didn't change a damn thing. But now I decided to read through the whole thing instead of just telling them about the contract number and resort name issues. I suspect there are probably other errors. On the settlement statement page they have my 2016 dues owed as the wrong number. So again, I email them to fix the contract name, number, and now the dues.

Tuesday AM I get a new set of documents. Now the contract number has been changed on page one to XXXXXXX but on the other 36 pages it's still XXXX4XXX and the dues haven't been changed.

So I send an email which says "PRINT OUT THE DOCUMENTS AN READ THEM CAREFULLY then send them to me when you KNOW they correct".

Tuesday evening 11/8 they sent me new documents. I just couldn't look at them....you know when you step on a bug and you are going to lift up your foot and you don't want to look at the bug that's squashed but you do anyway? Well that was my feeling. I just couldn't look when I know deep down they are going to be wrong. I decided to focus on the election Tuesday and I didn't open the email. I finally opened it last night.

Nothing had changed.

So I emailed my contact at the resale company and told them that we have to use a new Title company. I don't want to risk $XX,XXX by using an incompetent Title company.

The resale company emailed back this morning (Friday 11/11) saying that they would step in and get it fixed and that the buyer already returned their signed docs and the cashier's check and they couldn't change Title companies at this point.

Here are my problems:

1) I can't trust this Title company. Let's suppose the deal goes smoothly. Disney will remove my points from dvcmember.com and change membership ownership and only then will my payment be mailed to me. How can I know for a fact the Title company won't give my $XX,XXX to the wrong person? They can't even figure out which resort this deal is for! What is my recourse once my contract has been assigned to somebody else? It's not like I give them my contract with my right hand and take their cash with my left hand simultaneously.

2) My resale company representative was cc'd on every email. Why didn't they step in Friday, or Monday, or Tuesday, etc? Why did they ignore this problem until I demanded a new Title company? When they saw I was emailing the Title company that the resort name was wrong shouldn't that have been a huge red flag? Shouldn't the fact that the email subject said "Bay Lake Tower" been enough for the representative to give a quick call over to the Title company rep to figure out what the heck was going on? Shouldn't the resale rep have at least opened the docs and verify for themselves they were correct? Why did they ignore their responsibility for an entire week?

3) They already have the buyer's signed contract and cashier's check. Yet as of Tuesday the contract was still incorrect. I would be willing to bet $1,000 that the buyers signed a contract for Bay Lake Tower contract number XXXX4XXX. So what would happen if the Title Company could actually FIX the documents for me and I sign them. Now they'd have two sets (buyer and seller) with different resort names and contract numbers. Would Disney accept those documents? I mean, legally, doesn't the buy/sell contract have to have the same resort name and contract number on both documents?


So this is a "what would you do" situation. Do I just walk away and either rent the points or list with another broker once the exclusivity agreement runs out? Or do I jump into the abyss and pray to God this deal works out OK?

 

[longboard55]

That does no good. I would contact the owner of the sales company you are dealing with, I assume they hire the title company, and tell them your story and tell him if it does not get resolved real fast you will yelp them with horrible reviews

 

[Jhaberlein]

So the buyer didn't catch that they signed a contract for the wrong resort?

If the answer you are getting is "nothing can be done" but you do have the option of pulling the contract and walking away, that's what I would do.

We are currently researching resale contracts and these stories (although they frighten me!) remind me to quintuple check EVERYTHING!

 

[SpaceEngTM]

I would bet a lot of money too that the contract the buyer signed is incorrect as well. Most people are not very careful with what they sign.

You have a buyer so I would try to make this situation work before I walked, give the management of both companies the opportunity to make things better. I would document all the issues and the timeline of what has happened up to this point. I would create a list of questions or maybe things that need to happen to make me feel better about dealing with these companies. For example, I would want to switch agents with both companies. I would want to see everything they sent to Disney and filed (if I hadn't already) to ensure it was correct. I am sure you have a big list. If I didn't feel good about their response, I would then walk.

I would also ask for a discount on their fee if you stay with them, they are not doing their job as the transaction agent.

 

[APiratesLifeForMe2]

I am so sorry you are going through this. At this point I would personally stop emailing and start calling and asking to speak with a manager or supervisor. I would bet the copy the buyers signed isn't correct either and they probably didn't pay attention when they signed. They need to get this corrected for you ASAP. Good luck!

 

[CarolMN]

I would ask the broker for a copy of the signed contract that your buyer signed. If the broker refuses and/or if it is not correct (and it sounds like it will not be), you can tell the broker to let you know when the buyer signs the corrected contract (and to send you a copy). I might also ask for a copy of what was submitted to Disney for ROFR, along with Disney's response. Let the broker know that you are not signing anything until that is done. You might also give the broker a reasonable deadline to get this done, stating that you will walk away it cannot be corrected. If it fails to happen, then I'd inform the broker I am listing with another broker. I'm not entirely convinced that the errors are just the fault of the title company. Doesn't the broker send a lot of this info to the title company? You might also call Member Administration and see if they will tell you which of your contracts was actually submitted to ROFR.


Good luck!

 

[BillPA]

Please list the broker and title company so we don't run into this problem also. I have 3 of my 5 contracts that I am about to sell. Thanks

 

[LAX]

Please list the broker and title company so we don't run into this problem also. I have 3 of my 5 contracts that I am about to sell. Thanks

That would certainly be helpful. I am surprised these errors would actually occur! Getting the name of the resort and contract number wrong? It's a legal document, so one would think they at least double check it (if not more) before sending it out to the clients. I can't imagine this happening with a traditional real estate transaction. That's akin to getting the house number wrong.

LAX

 

[Dean]

I would call and talk to the owner of the title and give them one and only one chance to get it fixed on both sides. Check your contract and make sure it's accurate as well. Also look at the contract and see if it has a closing by date, if it does (and it should) and you're past it, just cancel and start over. The title company is going to want money but they don't deserve any. It's likely there is a tie in with the broker that includes financial incentives which is likely part of the reason they didn't want you to change. I'd also have this same conversation with the broker.

 

[DVCcurious]

After sleeping on it I emailed them and informed the Title company and the resale company that I'm terminating the agreement.

There's one major problem I just can't get around. We own a 250 pt BLT contract. All of the erroneous documents have said Bay Lake Tower. If Disney gets a bunch of documents with Bay Lake Tower and my name on them then Disney will probably transfer my BLT contract to the buyers. And I will end up getting $14k for a 250 pt BLT worth $27k. So then I'll have to call and argue and try to get my contract back, meanwhile the buyers could be using the points.

It's just too much of a risk.

 

[Dean]

After sleeping on it I emailed them and informed the Title company and the resale company that I'm terminating the agreement.

There's one major problem I just can't get around. We own a 250 pt BLT contract. All of the erroneous documents have said Bay Lake Tower. If Disney gets a bunch of documents with Bay Lake Tower and my name on them then Disney will probably transfer my BLT contract to the buyers. And I will end up getting $14k for a 250 pt BLT worth $27k. So then I'll have to call and argue and try to get my contract back, meanwhile the buyers could be using the points.

It's just too much of a risk.

If you terminate the contract without cause, and this is not cause in that situation, you will be liable for the commission and title company fees. That's why I suggested you check the contract. Unless your contact gives you an out, you may not legally have this right. Of course enforcing those issues could be tough. If this is the route you take, do a certified letter doing so.

 

[DVCcurious]

I took everybody's advice on this thread. I called and asked to talk to the manager/owner and it turns out my resale rep IS the manager and he doesn't work weekends. I called Disney to see what passed ROFR and they said that the ROFR people don't work weekends.

I checked my contract and it says I'm responsible for a $20 ROFR fee and a $150 Estoppel fee. There is nothing about what penalty would be assessed if I fail to perform.

I do want to sell and I have a buyer (as someone above mentioned). So it's probably best to try to get this finished. However I don't want that Escrow Officer involved further so I don't mind that I emailed him to tell him I'm not moving forward. I emailed my contact at the reseller and made a few "demands".

1) Switch Title companies
2) There may be good reasons why we can't switch title companies. If so then I want the current Escrow Officer who has provided erroneous documents replaced and I don't want this Escrow Officer involved any further.
3) I want a copy of the signed Buyer's Agreement to verify it says VWL
4) I want a copy of the signed Buyer's Loan Application to verify it says VWL
5) I want a copy of the approved ROFR stating that my VWL contract passed ROFR.

I think it was good advice to request the other documents to see what has been going on. The original contract we signed several weeks ago has Wilderness Lodge and the correct contract number.

We'll see what happens Monday. Thanks for all of the advice.

 

[SpaceEngTM]

Good luck and please let us know how it goes.

 

[Dean]

I took everybody's advice on this thread. I called and asked to talk to the manager/owner and it turns out my resale rep IS the manager and he doesn't work weekends. I called Disney to see what passed ROFR and they said that the ROFR people don't work weekends.

I checked my contract and it says I'm responsible for a $20 ROFR fee and a $150 Estoppel fee. There is nothing about what penalty would be assessed if I fail to perform.

I do want to sell and I have a buyer (as someone above mentioned). So it's probably best to try to get this finished. However I don't want that Escrow Officer involved further so I don't mind that I emailed him to tell him I'm not moving forward. I emailed my contact at the reseller and made a few "demands".

1) Switch Title companies
2) There may be good reasons why we can't switch title companies. If so then I want the current Escrow Officer who has provided erroneous documents replaced and I don't want this Escrow Officer involved any further.
3) I want a copy of the signed Buyer's Agreement to verify it says VWL
4) I want a copy of the signed Buyer's Loan Application to verify it says VWL
5) I want a copy of the approved ROFR stating that my VWL contract passed ROFR.

I think it was good advice to request the other documents to see what has been going on. The original contract we signed several weeks ago has Wilderness Lodge and the correct contract number.

We'll see what happens Monday. Thanks for all of the advice.

Did you have a close by date on the contract? Generally there is wording as to the commissions involved, unless you have a legal reason to cancel, you'd be on the hook for those. What you've posted so far wouldn't be a legal reason to cancel. Missing a closing date normally would if there's not a built in extension.

 

[DVCcurious]

While I may not have a "legal reason to cancel" I'm not going to sign an agreement that says I'm selling BLT with the wrong contract number. I may not have a legal reason to cancel, but I doubt they can legally force me to sign a contract to sell BLT when I listed VWL.



Here are the relevant sections.

1. This contract shall be closed on or before 11/30/2016 or within 45 days from when the estoppel information is provided by Disney to the closing company, unless extended by other provisions of the contract. If this contract is not executed by Seller by 10/14/2016 or upon presentation, or if Disney repurchases the contract, the deposit shall be refunded to the Buyer. Buyer to escrow money and contract by 10/14/2016, or contract is null and void.

3. Seller shall convey DEED, EXPIRES 1/31/2042 to Buyer (Trustee, Guardian's or Personal Representative's Deed to be used in event of Trust, Guardianship, or Estate). Property shall be free and clear of all encumbrances. BUYER shall pay all closing costs, including documentary stamps on the deed and title insurance. Closing costs are estimated to be $XXX . Seller to pay First Right of Refusal Recording Fee of $20 and an Estoppel fee of $150.

4. If Buyer fails to make any payment or perform any of his obligations hereunder, Seller has the option of terminating this contract and Buyer shall forfeit the deposit and the escrow agent is authorized by the Buyer to pay one-half of the deposit to the Broker and the balance to Seller, except that the Broker's portion shall not exceed the full commission. Buyer agrees upon default to pay Broker full commission minus Broker's portion of the forfeited deposit. If either party fails or breaches any of the terms or conditions of this agreement, said party is hereby liable for any claims or cause of action arising out of this paragraph.

 

[Dean]

While I may not have a "legal reason to cancel" I'm not going to sign an agreement that says I'm selling BLT with the wrong contract number. I may not have a legal reason to cancel, but I doubt they can legally force me to sign a contract to sell BLT when I listed VWL.



Here are the relevant sections.

1. This contract shall be closed on or before 11/30/2016 or within 45 days from when the estoppel information is provided by Disney to the closing company, unless extended by other provisions of the contract. If this contract is not executed by Seller by 10/14/2016 or upon presentation, or if Disney repurchases the contract, the deposit shall be refunded to the Buyer. Buyer to escrow money and contract by 10/14/2016, or contract is null and void.

3. Seller shall convey DEED, EXPIRES 1/31/2042 to Buyer (Trustee, Guardian's or Personal Representative's Deed to be used in event of Trust, Guardianship, or Estate). Property shall be free and clear of all encumbrances. BUYER shall pay all closing costs, including documentary stamps on the deed and title insurance. Closing costs are estimated to be $XXX . Seller to pay First Right of Refusal Recording Fee of $20 and an Estoppel fee of $150.

4. If Buyer fails to make any payment or perform any of his obligations hereunder, Seller has the option of terminating this contract and Buyer shall forfeit the deposit and the escrow agent is authorized by the Buyer to pay one-half of the deposit to the Broker and the balance to Seller, except that the Broker's portion shall not exceed the full commission. Buyer agrees upon default to pay Broker full commission minus Broker's portion of the forfeited deposit. If either party fails or breaches any of the terms or conditions of this agreement, said party is hereby liable for any claims or cause of action arising out of this paragraph.

As long as they get you a correct contract by 11/30, you'd legally be obligated to proceed as posted and/or be liable for the fees listed above plus a commission (I'm assuming your contract addresses this). Of course enforcing the charges could be difficult from their side if you wanted to take the risk but they likely could get a lean making it hard to sell later.

 

[DVCcurious]

Problem solved.

The Title company person had a trainee working with him. The trainee prepared the documents for both Buyer and Seller. The Title Company person did not review them for accuracy before they went out.

On 11/3 the doc's were sent out to both buyer and seller. The buyer responded immediately saying that they were wrong (they had BLT instead of VWL). The Trainee fixed the buyer's docs and they were sent out that day. Then the buyer signed them and sent the cashier's check on Friday 11/4.

I contacted the Title co rep on 11/3 and told them the seller's docs were wrong. The Trainee thought he'd fixed them because he was confused between Buyer's docs and Seller's docs. He told the Title Company Rep that the docs were corrected so they emailed the same erroneous docs to me (the Title Company Rep never bothered to open them and read them). This happened several times where I said they were wrong, the trainee said they'd been fixed, and the same erroneous docs were emailed to me without changes.

I finally got the corrected documents. I also got

1) Right of First Refusal letter from Disney with the correct VWL and contract #
2) Buyer's signed documents showing VWL and correct contract #
3) Buyer's loan application showing VWL.

So I signed the Seller's docs and sent them in yesterday.

 

[CarolMN]

Glad it is working out. Thanks for letting us know how it turned out.

 

[bumbershoot]

Wow.

The trainee will either go on to be the best agent ever from this "read all the words in the email trial by fire" or will quit or be fired.

(And why would they not automatically send corrected documents to both parties once it's determined that they are wrong?? Your documents don't automatically update to the right wording just because the buyer documents get corrected lol.)

 

[SpaceEngTM]

I am glad it is something that can be explained and they were able to provide you with the documentation you needed to go forward with the sale. I hope that the Title company person, who did not review what their trainee sent out, was reminded of what their responsibilities were! Makes you wonder how many times this happens. This person was given many times to check the documents and they did not. Very annoying.