New York State court recently ruled that e-mails can carry the same weight as traditional contracts. In New York real estate transactions, a contract is not binding until it is a fully executed contract signed by both buyer and seller.
A court ruling may be a game changer.
In a recent commercial real estate dispute case which has the same implications for residential real estate, New York state's highest court ruled:
"As much as communication originally written or typed on paper, an email retrievable from computer storage" is proof of a deal, according to the court's opinion.
In it's decision the judges took the view that if an e-mail can be used for financial transactions like taking out business loans, it should be good enough for home purchases, too.
Be careful what you type and be careful when you hit send or reply. New York's highest court affirmed that e-mails are binding in real estate negotiations. This is an important implication for buyers and sellers in New York state.
During my real estate career, I've been on both sides of the transaction when one buyer had an accepted offer, or even signed the contract and the seller sold to another buyer. It's standard practice. Keep showing until there is an executed contract.
In most states Realtors write offers, they are contracts. In New York, offers and counter offers were never binding either verbal or written. This ruling may change that.
The case involved a contract that went out for $50 million for a commercial building. The buyer assumed he was he buyer and started researching structural work needed. The buyer then found out the seller sold to another buyer for $52 million. A typical NY real estate deal, it happens if it's $50 million or $500,000. However, this time the buyer sued for breach of contract. According to an old email from the seller's broker the buyer was granted a first right of refusal to counter. The buyer never replied to the email. Because he didn't "reply" the court said he couldn't claim the first right of refusal had even been offered .
The NY courts confirmed emails are binding. Saving emails can help you or hurt you depending on what it says and if you "reply" or you don't "reply" can make a big difference.
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