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My sister and I jointly submitted a bid to a house today for $580 000. After I signed the documents, she modified the bid to $600 000 without my knowledge.

Now, in this case, neither she nor myself will actually be paying anything towards the house if the seller accepts the revised offer so I am not taking action. But if hypothetically I have to pay $290 000 for 50% ownership of this house, and the contract is modified without my knowledge, could I sue her to declare the contract null and void and not lose the deposit or any money?

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  • Please clarify: Who is "she" in the first paragraph- she (your sister) modified the bid up to 600K, correct? Why? Did she get anxious that you would lose the house and just raise the bid, or did she get verbal feedback from the seller (or from the seller though the agents) that 580K would not be accepted, but 600K would? Also, what do you mean in the second paragraph by " neither she nor myself will actually be paying anything ...if the seller accepts the revised action."? – Damila Feb 12 '19 at 15:26
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The contract will not be void

There is a disagreement between you and your sister as to the price to be paid for the house. However, the vendor is an innocent party in that disagreement and a contract will not be made void if it injures innocent parties.

Under the contract, you and your sister are obliged to pay $600,000 jointly and severally. Neither the vendor nor the court cares in what proportions you pay so long as you do - it could be $0 from you and $600,000 from her all the way to $600,000 from you and $0 from her.

If you break the contract you will lose your deposit and will also be liable for the vendor's losses to the extent that they are greater than the deposit. For example, if the deposit is $50,000 but the next closest bid that can be converted to a sale is $520,000 then the vendor has lost $80,000 which will come first from the deposit with the vendor being free to chase either or both of you for the $30,000 balance.

If you have a contract with your sister about what your respective shares are and what you are each obliged to pay then the court will hold you to this. However, if you just have an 'agreement', which is what is presumed between family members, then you have to sort it out on your own.

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  • So, if I actually need to do something like this in real life, I will need to sign a separate contract with her that states I will only pay $290 000 or else Ido not even have any evidence to sue her for the extra $10 000 in small claims court? – user2213307 Feb 12 '19 at 5:01
  • @user2213307 No contract needed, unless the intended percentages of ownership are not 50%-50%. In a situation like this, principles of equity render a separate contract with your sister unnecessary. The fact that both of you agreed to pay 50% of the price ($580,000) leads to the equitable outcome that each one is entitled to a 50% of ownership. By contrast, a contract or other evidence would be necessary if either co-buyer intends to supersede that default, equitable outcome. – Iñaki Viggers Feb 12 '19 at 11:48
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if hypothetically I have to pay $290 000 for 50% ownership of this house, and the contract is modified without my knowledge, could I sue her to declare the contract null and void and not lose the deposit or any money?

It would not be void, but the details of your contract will help determine who is liable to you regarding the extra $10,000 ("the excedent"): the seller or your sister. The seller and/or your sister breached the covenant of good faith and fair dealing with respect to you.

If it is reasonably clear from the sale contract that agreements with the seller require each sibling's authorization, then it was wrong for the seller to skip your confirmation of the revised bid. Absent clarity in that regard, you would have to pursue recovery of the excedent from your sister for impermissibly misrepresenting your position in altering a contract you had already signed.

Accordingly, the court shall order that the house be sold for $590,000 (so as to rescind the excedent wrongfully imputed to you) or compel your sister to reimburse you the excedent.

Either way, it is in your best interest to ensure that the ruling explicitly preserves your portion (50%) of ownership, lest your sister claim that her greater payment entitles her to a greater percentage of ownership.

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