Lawsuits | Close, Then Sue?

Imagine this scenario:

Your client is set to close on a new property today. Instead of celebrating, the closing day quickly turns into a nightmare. During the final walk-through, you discover a major problem—the Seller has left the property in disarray, even removing fixtures. Even worse, after contacting the Listing Agent, it’s clear that the Seller is challenging you to walk away from the deal.

This is where Ross Law | Ross Title can help. As a client, you have access to a FREE consultation with Christian, where you can ask the crucial question: What are my legal options?

In many situations, despite problems with the Seller, a Buyer can still close the deal and pursue legal action afterward. In fact, this may often be the safest course of action.

A recent case, Smith vs. Carlton, No. 5D21-1383 (Fifth District), sheds light on a situation just like this.

In Smith, the parties had signed an “As Is” contract for a 25-acre working horse farm, including a house, barn, paddock, horse stalls, fencing, and pastures. The Buyer had a 10-day due diligence period, followed by the standard pre-closing walk-through inspection. The walk-through ensures that all agreed-upon personal property and fixtures are still present and that the property has been properly maintained.

During the walk-through, the scene was chaotic. A tenant was moving out, and trash was scattered everywhere. The Buyers were unhappy and threatened to cancel the deal. They offered to take care of the trash in exchange for a slight price reduction, but the Sellers refused. The Seller’s Realtor assured the Buyers that the trash would be removed, so the Buyers decided to proceed with the closing.

However, after closing, the Buyers discovered that several gates and fences that had been present during the walk-through were missing, and much of the trash was still on the property. Within three months, the Buyers sued the Sellers for damages.

The trial court initially ruled that the Buyers had waived their right to sue by closing the deal. However, the appellate court disagreed and ruled in favor of the Buyers. The court clarified that the contract allowed post-closing suits for damages and rejected the idea of waiver. It emphasized that the right to a clean property—free of trash—didn’t fully materialize until the closing date, meaning the Seller had until closing to meet these obligations.

But here’s a key point: suing after closing doesn’t always guarantee success. The legal principle of “merger” can prevent a Buyer from pursuing certain claims post-closing. This depends on the specifics of the dispute.

If your client’s closing is contentious, remember that canceling the contract isn’t the only option. Closing and then suing allows the Buyer to secure the property, protect their deposit, and still pursue legal action for unresolved issues. It’s not an all-or-nothing situation.

By choosing Ross Law | Ross Title, you gain the support of experienced legal professionals who can guide you through these challenges. We’ll offer legal opinions and assume the risk for you, helping you successfully navigate even the most complicated transactions.

We hope you find this information helpful. If you have any questions, don’t hesitate to reach out to us directly!