Since 99.9% of the usual hotline calls have fact patterns that do not fit into applicable federal or SC precedent case law (no one is likely taking repair procedure/earnest money cases all the way to the SC Court of Appeals also the facts of the real estate issues are always different), the answers are always going to be forecasts of possible court decisions that can be obtained with high litigation costs in money/time/worry.
But, SCR offers free Zoom mediation services as an alternative to litigation.
https://screaltors.org/mediation/
https://screaltors.org/wp-content/uploads/2020/03/OnlineMediation.pdf
The usual hotline call is a repair procedure linked with an earnest money dispute in a failed deal (more parties are using lawyers to hold the earnest money).
(Due diligence potentially could cure many of these types of issues. Based on hotline calls, parties often avoid using due diligence for a variety of reasons. Perhaps, a recommendation to avoid many legal issues is to use due diligence.)
While the REALTOR® often wants to help their client handle the failed deal and get the earnest money for their client, the REALTORS® major risks in this scenario can include:
(1) violating the NAR Code of Ethics by not telling the parties to obtain legal counsel resulting in legal issues for their client
and/or
(2) facing the unauthorized practice of law ethics/felony/lawsuit/upset for giving their client legal advice resulting in legal issues for their client.
Hotline seeks to protect members from these two major risks.
Here are some general answers…
When the buyer side member calls the hotline:
"Article 13 requires you to recommend the parties obtain legal counsel. Based solely on your description that the buyer wants to timely/properly terminate under repair procedure for major cracks above front door jam, I would expect a judge to not find the buyers in breach of contract should the seller hire a lawyer and a structural expert and sue the buyers for breach of contract but there is no controlling legal precedent for this and different facts change the answer.
The seller’s attorney may hire an expert to prove the cracks were not structural issues requiring repair. The buyer’s attorney may hire an expert to prove the cracks were structural issues.
Since an attorney is holding the earnest money, hopefully, the parties signed an escrow agreement covering this situation or you should contact the attorney regarding what is needed for disbursement. Perhaps, the buyer’s attorney can get the trial judge to rule on the earnest money while ruling on the breach of contract lawsuit.
Alternatively, the parties can sign an SCR518 release and move on to other deals without lawyers. SCR offers free Zoom video conference mediation as an alternative to litigation.
There is no guarantee of how a judge will rule."
When the listing side member calls the hotline:
"Article 13 requires you to recommend the parties obtain legal counsel. Based solely on your description that the buyer wants to illegitimately terminate under repair procedure for minor sheetrock cracks above the front door jam, I would expect a judge to find the buyers in breach of contract should the seller hire a lawyer and a structural expert and sue the buyers for breach of contract but there is no controlling legal precedent on this and different facts change the answer.
The seller’s attorney may hire an expert to prove the cracks were not structural issues requiring repair. The buyer’s attorney may hire an expert to prove the cracks were structural issues.
Since an attorney is holding the earnest money, hopefully, the parties signed an escrow agreement covering this situation or you should contact the attorney regarding what is needed for disbursement. Perhaps, the seller’s attorney can get the trial judge to rule on the earnest money while ruling on the breach of contract lawsuit.
The seller may not want to sign another contract while this issue is on-going due to legal risks without being told to obtain legal counsel and/or making the next contract contingent upon the first contract not being enforceable and no lawsuit filed from that deal. Sellers can assume risks and make decisions.
Alternatively, the parties can sign an SCR518 release and move on to other deals without lawyers. SCR offers free Zoom video conference mediation.
There is no guarantee of how a judge will rule."
Both sides members will usually call the hotline.
As per the above answers, the only constant is "tell the clients to obtain legal counsel and the court is an uncertain outcome with time costs and lawyer costs." SCR offers free Zoom mediation settlement services to avoid these.
Members often state "my client cannot afford legal counsel"
Parties can obtain legal counsel or if they do not have the money for legal counsel, parties can pursue income limited legal aid.
(SC Bar offers a $50 interview and perhaps income-restricted legal aid via SC Bar lawyer referral service 800-868-2284) and SCR offers free Zoom mediation services.
Members often state "this sounds like it is a grey area"
Parties may realize that it will be in "black and white" when the judge types the order, but getting that judicial order is expensive in time and worry and legal fees and expert witness fees to obtain. So, it may be best to work something out and SCR offers free Zoom mediation services.
Posted by: Byron King on 11/09/20 (This information is only accurate as of 11/09/20. You must contact SCR for updates and changes to this information after 11/09/20 as laws and regulations may change over time. SCR 803-772-5206 or email Byron)