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Upon the sale of my house, in the contract I agreed to provide the new homeowner a C.O. for an enclosed porch built 40 years ago

Merrick, NY |

and his lawyer held a $15000 escrow. In order to pass inspection, however, I wound up having to get him a new stoop and handrails. I wanted to get wood handrails for $500 and he insisted on iron ($1350). I agreed to put $500 toward the purchase of iron, but he is refusing to pay the remainder. I sent a $500 deposit to the iron company and they installed iron. I never signed a contract nor agreed to pay the remainder of the bill. Am I legally responsible for paying the iron company this bill, or is the homeowner ultimately responsible. Again, I never signed any contract nor agreed to pay the full price, and I believe the new homeowner had no right in the first place.

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Attorney answers 3

Posted

I just want to chime in and ask whether it's really practical, or makes financial sense, to argue too much about this. I realize that money is money, and $750 (the difference between the cost of the iron railing and the wood railing) is nothing to sneeze at, but now that you've gone ahead and ordered the iron railing it would probably cost you more in time, effort, grief, and lawyers' fees to contest the issue. First, since you placed the order for the iron railing, the iron company will come after you first - because your name was on the purchase order - and most likely you would lose and would have to bring the homeowner into any lawsuit to see if the court would order him to contribute to the cost - which is not a foregone conclusion. Even if your attorney billed for her or his time at $100/hour, you would most likely end up incurring more than 8 hours of time, or more than $800 in attorney's fees, all of the less than 100% chance of getting $750 back.

I know you said the homeowner is refusing to pay for the full amount, but would he/she be willing to split the cost with you some way? I would suggest that you first try that and, if he/she simply puts his/her feet down, that you swallow your pride and just pay the rest of the bill. I know that's cold comfort, but you're likely to feel a lot worse, and be a lot poorer, if you pursue this to the end in litigation.

My answer does not constitute legal advice and may not be relied upon by anyone for any purpose and does not constitute an attorney/client relationship or an offer to form such a relationship. This disclaimer is intended to be fully compliant with the requirements of Treasury Department Circular 230 and the terms thereof are fully incorporated by reference. If you wish to consult with me please contact me at dana@nytaxcounsel or visit my website at www.nytaxcounsel.com

Asker

Posted

Agreed. However, I have effectively been coerced into spending considerable additional monies that were not my responsibility, particularly since he knew I had a sizeable escrow in his control. I assumed all along I had to finalize with the Iron Company, as I know I would more than likely be sued - however, just because of the way the new homeowner strong-armed me into spending more than just the $800 additional for the iron handrails, it seems to me that small claims court would be the only legal outlet that would get me reimbursement from him. On that note, what if the homeowner insisted on gold-plated handrails? Because he had my escrow I would have been forced to get that. Small claims court suing the homeowner to recoup my monies seems like the only feasable (and fair) way to settle this. There is more to this story, but I am focusing on just this one topic. Thanks !!!!

Dana Whitney Atchley

Dana Whitney Atchley

Posted

If the handrails had been made of gold, then I would completely agree that it was worth fighting on the issue (although I wouldn't have ordered the railings first). Small claims court is certainly an option.

Asker

Posted

Only problem was I was backed into a corner because my deadline was Feb. 20, after which the new homeowner could have walked away with a $15000 escrow. So it was either succumb to his coercion or lose my escrow. People suck. And people who try and play fair always get screwed.

Posted

You are correct. You were only required to do the bare minimum to get the co. You had a verbal contract which can be enforced. If you can not settle this amicably get the co get your escrow released then if the iron company comes after you for the balance you can sue him in small claims court. If you can get your escrow released before you pay the balance to the iron company then they will probably end up putting mechanics lien on the house which the homeowner will have to deal with.

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Asker

Posted

True, but couldn't the Iron Company sue me since I placed the order? Kindly read some of the responses I've received and my replies. It seems to me my only resort will be to pay the Iron Company its balance and sue the new homeowner in small claims court since he was blatantly using coercion to force me to get him what I expressed to him in writing I was unable to financially (or legally) do. I offered to split the cost as I mentioned, but he is being completely unresponsive and just wants his way. Guess I'll have to go to District Court and file a case.

Asker

Posted

I will get my escrow back in a day or so but that still leaves a balance to be paid with the Iron Company. Also, I am out of state and the Iron Company does not have my current address so I could just run away from it all but I fear reprisal.

Richard J. Chertock

Richard J. Chertock

Posted

If the purchase order was in your name they will most likely try and recover from you. If you don't pay, it is a small amount so they will either sue in small claims court or they may just file a mechanic's lien against the property. You can sue the buyer in small claims court but you will have a hard time proving your oral agreement and if you get a judgment you still have to collect it unless the buyer pays it voluntarily. If they file a mechanic's lien it will get the buyer's attention because it will be against his property. If you choose to just "run away" the will eventually get a default judgment against you if they pursue it which they will have a very difficult time collecting and it may not be worth their effort. The judgment would stay there for 10 years then expire. It would be earning interest for the period so if they found your new address and found assets it could end up costing you a lot more or it could just go away. It is a gamble to run away but worst case scenario is it catches up to you and you pay the judgment plus the interest.

Richard J. Chertock

Richard J. Chertock

Posted

The judgment could also show up on a credit report if you try and borrow money in the future and you may be required to pay it at that time to get a loan or it could lower your credit score.

Posted

Who placed the order with the iron company?

If you made the order, you are likely responsible for payment of the bill. In fact, the iron company would likely have a hard time collecting from the new homeowner under a breach of contract theory - because there was no contract between the company and the new homeowner.

If the new homeowner placed the order, then the new homeowner will be responsible for the bill.

Note that even if you are responsible for the bill, you could still sue the new homeowner for the difference it cost between wood and iron railings.

If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.

Asker

Posted

I called the order in and paid the deposit, however, I did not sign any contract with the Iron Company but verbally told them to bill the remaining balance with the homeowner. My hunch is that the new homeowner will deny that agreement. I did not provide my new address or contact information with the Iron Company - and again, in numerous written correspondence, never agreed to pay more than $500 towards the iron. The homeowner chose the Iron Company. How can I be liable if I never signed any agreements with the Company?

Michael T Millar

Michael T Millar

Posted

You don't have to sign anything to have a contract. If the iron company sues, the will likely sue both and let you two slog it out over who is responsible for the bill. FWIW, the escrow agreement only required you to get a CO. Anything requested by the new owner above and beyond what was necessary to get the CO should be his responsibility.

Asker

Posted

Agreed. I realize that I don't want to be sued, so I will finalize my bill with the Iron Company and sue the new homeowner in small claims court. As I have commented to another responder to this question below, there is more to this case - however I have just focused on the handrails. I have also spent $500 additional on his stoop since he had specifics he forced me to follow. Again, this was a blatant example of coercion since he knowingly knew he had me by the cohones being in control of my escrow. Plus, his lawyer refused my lawyer's calls when I was trying to mediate this issue. Looks like I have no choice but to pursue him in small claims court, which, will all the responses I've received, seems like I may have a favorable outcome. Thanks!!!!!

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