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Old 10-17-2013, 09:28 AM   #1
Dividends
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Reneging on deal

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
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Old 10-17-2013, 11:08 AM   #2
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Originally Posted by Dividends
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
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.
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Old 10-17-2013, 11:16 AM   #3
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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.
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Old 10-17-2013, 12:07 PM   #4
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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.
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Old 10-17-2013, 01:11 PM   #5
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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".
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.
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Old 10-17-2013, 01:36 PM   #6
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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.

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Old 10-17-2013, 02:12 PM   #7
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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.

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I agree.

Having been on the end where someone reneged on us all I can say is it stinks.
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Old 10-17-2013, 01:53 PM   #8
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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!
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Old 10-17-2013, 07:07 PM   #9
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Originally Posted by Dividends View Post
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
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.
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Old 10-18-2013, 01:17 PM   #10
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Originally Posted by Dividends View Post
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
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.
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Old 10-26-2013, 01:00 PM   #11
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Originally Posted by Dividends View Post
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
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?
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Old 10-26-2013, 04:17 PM   #12
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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?
Yes, that's correct. Either party has 10 days from signing the agreement to back out with no penalty under Florida law.
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Old 10-27-2013, 05:37 AM   #13
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Yes, that's correct. Either party has 10 days from signing the agreement to back out with no penalty under Florida law.
Jim, as far as I know this 10 day cancelation period only applies to the buyer.
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Old 10-27-2013, 07:46 AM   #14
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Jim, as far as I know this 10 day cancelation period only applies to the buyer.
I've been told both ways by brokers. It may be that there is no realistic recourse to the buyer if the seller changes their mind.

I know there have been a LOT of Fidelity underwater sellers who have reneged on signed deals because they didn't have cash to close.
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Old 10-27-2013, 09:51 AM   #15
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I've been told both ways by brokers. It may be that there is no realistic recourse to the buyer if the seller changes their mind.

I know there have been a LOT of Fidelity underwater sellers who have reneged on signed deals because they didn't have cash to close.
My understanding is the law only applies to the buyer but anyone could include it in the contract as well. There are also provisions for cancelation up to a year but hopefully the contracts under the brokers should meet the criteria for 10 days from signing.
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