How can I close on a house when the bank will not correct their damages?

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How can I close on a house when the bank will not correct their damages?

In April I submitted an offer on a house that had been foreclosed on. My offer was accepted and closing was scheduled for May 27th. Two days before closing my mortgage company notified me that they had just completed their appraisal and had multiple inspections and repairs I needed to complete before they would finance my purchase. I completed all the repairs and inspections, out of pocket, except for an environmental inspection. The environmental was requested because of a large oil spill behind the garage. The bank’s cleaning company dumped a 55 gallon drum of oil behind the garage when they cleaned out the house. I pointed this out and the bank agreed that this was their fault and they promised it would be cleaned shortly so I could close. Now they have missed their promised deadlines four times. It has also been more than a week since I submitted the latest extension and they have not sent it back. Now I am worried they are not going to sign this last extension and are going to cancel our contract and wait until they have a cash buyer so they can sell it without cleaning their oil spill. I’ve been paying home owners insurance on the house since May it started on the original close date and have also spent hundreds of dollars and over 40 man hours fixing issues for the lender.

Asked on August 13, 2018 under Real Estate Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Since based on what you write, there is no doubt but that the delay is due to the bank's contractor and the bank has in fact accepted responsibility for this, they cannot use their own conduct or fault as grounds to get out of their contractual obligations. You have two options:
1) You can bring a lawsuit against the bank seeking a court order requiring them to clean and go through with the sale. Given the timing, you'd need to bring this order on an "emergent" (think: "urgent" or "emergency") basis to get into court in days, not months. Bringing an action on emergent basis adds considerably to its complexity, and seeking a court order, rather than just monetary compnsation, is also more complex: you would also certainly need an attorney's help. 
2) You could wait until there the contract is breached by the bank and sue them for compensation--e.g. for the money you expended, for other losses you can show you will occur due to not being able to close on this home, etc.
Or you could do both: you could see an order to compel the cleaning and closing and also compensation.
A good idea would be to consult in person with an attorney immediately to explore your options.


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