We are just about finished with Paul's problems
(unusual seasonal expenses)
The vendors were under a duty to mitigate their losses. So, they did as best they could. Paul was to buy the property with a June 30th closing. The house had a swimming pool and air conditioning. It was an additional $2,750 to open the pool and have it running all summer and a further $1,500 keep the air conditioning turned up.
Don’t forget $1,750 for landscaping and maintenance. So, another group of expenses for seasonal losses: $2,750 for the pool $1,500 for air conditioning $1,750 for landscaping $6,000.00
And, one more item. Don’t forget, the lawyer’s not working for free in this lawsuit, so you can add another $15,000.
So, how do you figure out how much Paul owes? $495,000 the original sale price $445,000 the eventual sale price That means $50,000 is the differential.
You need to add up the following:
$50,000 for the differential
$26,703 for additional expenses (usual and seasonal)
$15,000 for legal costs
That means the total amount owed by Paul is $91,703.
The only good news for Paul now, is that he has already paid $30,000 because that was the deposit. However, he now has to come up with another $61,703 for a house that he doesn’t own. That’s an expensive lesson, and we didn’t take into account any of his own losses, expenses or legal fees.
So, who WON the bidding war?
Brian Madigan LL.B., Broker
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