Building a home is an exciting process, but it can also be a stressful one. One of the stressors that buyers have to contend with is a worry about whether or not the home builder will cancel their contract and walk away from the deal. Sadly, it is a scenario that can and does happen. If you have plans to build, learn about some of the reasons why a builder might cancel and how you can protect yourself.
Site Approvals and Permits
State and county laws in most jurisdictions require that builders have proper zoning approval and permits in place before they can break ground. Believe it or not, some builders will begin selling lots in communities while their zoning and permitting applications are still processing.
While the likelihood of their applications being denied is rare, it can happen, and even an approval can come with delays. As such, the builder can cancel any existing contracts. The easiest way to avoid this scenario is to ensure that all zoning and permitting applications have already been filed and approved before signing a purchase agreement.
The builder should be able to provide this documentation for you, but if they do not, a real estate attorney can assist with the process.
Uncompromising Buyer
By and large, the goal of the home builder is to satisfy the customer, but sometimes, the process is easier said than done. For example, the buyer might have a very specific type of tile they want installed in their home, but if there is a supply chain issue and the tile is unavailable, there is nothing the builder can do.
Sometimes, buyers are unwilling to compromise in this area, which to a certain degree is understandable. However, if the builder and buyer are at a headlock, there is often language in the purchase contract that allows the builder to walk away from the deal and cancel the contract.
Keep in mind in this scenario, this may mean that the buyer will also forfeit any money they put into upgrades in the home. To protect themselves, buyers should have specific language in their contract that states the builder must provide a comparable replacement in the event of material unavailability and at least be willing to compromise in some areas.
If you have concerns about this practice, make sure you take them up with a real estate attorney who will ensure your time and financial investments are protected. For more information, contact a law firm such as The Law Firm Of Richard H. Lovell, P.C.
