The Importance of the Dock Permit and Why It Must Not Expire

by Isaac Benmergui, Esq on January 30, 2014

Everyone talks about the buyer this, the buyer that, looking at all the legalities and requirements only the buyer must adhere to. I tell you the truth: real estate law isn’t just about the buyer. It’s about the seller, the agent, the broker, the property owner, the bank. Everyone. It doesn’t matter if you’re an escrow agent or a real estate attorney – we all have a legal obligation to comply with the law, and this is definitely true for this particular case between Addie and Kjaer, and of course the attorney-in-fact D’Amour. Read on to get the scoop:St. Thomas

We’ll visit the splendor and paradise of St. Thomas, Virgin Islands, for a little story about some sellers along with a ‘launch’ designed to gain access to the particular island. Along come some buyers interested in basically ‘purchasing’ the island, so to speak, with signed contracts and even an escrow agreement. Purchase costs for the launch and island respectively were $2.5MM and $21MM, and the contract was written with an initial $1MM deposit, pus an additional nonrefundable extension beyond the closing date of $500K.

This is where we see the problem: a “clear and marketable” title, plus assignments of all permits were mandated, required for the sellers to deliver. This included even submerged land leases and dock occupancy licenses, plus any improvements necessary for upkeep. The sellers basically failed to ensure those items were delivered, rendering what can be considered a breach of contract. Part of that failure was a certain dock permit that had expired. This ‘breach of contract’ essentially allowed the buyers to receive their nonrefundable deposits back, wouldn’t you think? Of course, the sellers refused.

The legal battle began, of course, with the buyers filing an appeal for a claim of breach of contract. To muddy those crystal waters of the Virgin Islands even more, the sellers counter-appealed along with the seller’s attorney D-Amour filing separate appeals for the holdings. The Third Circuit made their decision after deliberations and arguments, affirming the entire appeal in part and reversing certain stipulations to allow the buyers some restitution: namely $1.5MM in returns. Fair enough, right? And this all occurred because 0f an expired dock permit!

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