[b]Randyf:
What did your friend do wrong, what was the issue. Why did he lose in court. [/b]
The only thing he did wrong was not inform, via plain language, on his option, that he intended, or might, assign his option for a profit.
He had informed that he was a real estate broker, though.
We were limited partners at the time, so I was in court with him. Believe me, the judge not only ruled in favor of the Seller, he literally yelled at my friend, and told him if he ever saw him in court in this county, for an issue even related to misleading, or failing to inform, he would issue an injunction preventing him from doing real estate business in this county. I was under the impression that he had been there before for something similar, even though my friend said no.
I don’t know the legalities, exactly, but from the judge’s demeanor, I think it would be safe to assume that law was on the judge’s side. The judge said that my friend’s ‘intent’ was the issue, that he had acted unprofessionally, and that he was granting the maximum amount of damages he was allowed by law, in this case.
By the way, my friend did raise the issue about “and Assigns” being included, in clear print, being lawfully sufficient. That’s when the judge got irate, and said something about “faulty interpretation” of the law, and suggested that he consult an attorney, and that if he already had, to find another lawyer, because the one he has is going to get him in a lot of trouble.
We stopped doing business together because he refused to consult with a real estate attorney about issues, instead wanting to keep his ‘friend’ attorney, who was a trial court attorney (and an alcoholic, I must add). We had ended up in court again over another matter, too, and I wasn’t happy with the way he wanted to deal with it. He wanted to take it to court, I wanted to give up $200, split two ways, to stay out of court and keep good will. We won in court, but the hassle, and who knows what being said about us, would have well been worth the $100, at least to me. He’s a good friend, but too darned stubborn to take the risks.
See, you admit that 1 in 6 will be problematic. I avoid all trouble by always disclosing everything possible. It is also helpful, because instead of possibly upsetting someone, I disclose everything, how I make my money, and even offer them a referral fee for bringing any deals my way. (I do 'exaggerate on how much work I have to do to get this stuff worked out, as a way of subtly discouraging competition, and how I deserve the my profits.) It has brought me several referral deals, and some of my sellers have become buyers, both as investors, and as buyers that I earn real estate commissions off of.
RandyF:
Are you sure the Judge is licensed to practice. 1st, its common practice to assign options and bills of exchange. Your friend could plead that its a traditional right he and many others enjoy, he could have also argued that the Judge needs to abide by traditional Real Estate practices and not seek to overturn them, thats not his job or function. This business about don’t appear before me again or else, is highly illegal, vindictive and unethical. You then have free-trade issues, you are not here to keep Judges happy, but to observe the law in your dealings.
In any event what was wrong with assigning YOUR RIGHTS, they are yours, you bought them, and you can assign any commercial contract unless the words clearly prohibit assignment/s. In your area it might be best to add a page 2, for signing which spells out all the Options side-issues and sub-clauses. E,g. innocuous paragraphs that say : The property OWNER AND VENDOR is aware, and was made clearly aware by the broker that he may / or may not, at a future date choose to assign the Option to another party or parties. And this option may be resold for an higher / or lower sum of money than that sum 1st agreed upon with the vendor / optionor.
You’ll notice I took out the heat-seeking-missile-words by adding the adidtional wordshigher / or lower. You can spell it all out for them if you wish by carrying this 2nd sheet with you, and get them to sign for a copy.
*In life no matter how Saintly or Good you are, someone, somewhere hates you. I wear shirts and ties and lace up shoes and cufflinks, they cause amusement and mild irritation to some, but who cares, be yourself, with clients I can play many roles and they all come round to my point of view eventually. And if they don’t who cares. Walk out.
- Why on earth do you bother with $1000, $500, splitting $200. Don’t do any deal less than $250 000, and always let them know you are prepared to walk, to leave. I have left houses without even going inside. If I do not like a client - I’m off, good-byeeeeeeee.
Hello everyone,
Its late at night and I havent read every word of every response but I take the view that you should only deal with sellers who have no choice but to sell. That way they probably wouldnt care what or how the contract is worded. Why do I say this? Because I know people who have been in desperate situations. They were extremely motivated and could care less what the contract said or how much the buyer or assigns make. They just wanted to get rid of the properties.
RanyF
Its took me all night to figure out the Judges reasoning Have youperhaps omitted to mention that your friend was a licensed broker acting as a dummy purchaser, this is not allowed.
A broker must act at all time for his client, he must not act for an undisclosed buyer or principal or do anything underhand. It sounds as if the Judge ruled the intent / intention was to obtain the deal based on non-disclosure and deceit.
I agree with the previous post. Randy F. from your experience, in your opinion, do you think the judge would have acted the same way if neither of you held an agent or brokers lic.?
Its a question of ethics, licensed in some ways your tied, you see if your Licensed you have what they call a FIDUCIARY RESPONSIBILTY. Which means your clients come first, nothing underhand is allowed, and you can be disciplined by removal of your license.
If your not licensed then maybe you could use a dummy purchaser, you can call the dummy your Agent, your sub-purchaser, or you can incorporate. Theres 100 ways to eat the pudding?