I rehab houses for a living. Been doing it 8 years. I use a hard money lender on some houses. I've worked with him and never had any issues. Then in November 2015 he says he wants to rework my contract with him for the 5 houses he is financing. Says in an email he will be in town soon to talk about it. So he comes in town (I'm in Tampa, Florida and he is in Houston, Texas) and has lunch with myself and my business partner. The lender says he wants to work on a "forbearance document" whereby the monthly interest payments we make will be deferred and he will use the draw money we have in escrow to help pay down our loans with him. Says not to do anything with draws or interest until he finalizes the document. I didn't ask him, but I assume he had concerns about the time it was taking on several houses. We pull permits for everything, as required by law. He funds folks here who don't pull permits and flip their houses very fast. I know because we met some of his other clients and they bragged to us about how they don't pull permits.
So the lender leaves the next day and I send him an email asking him to put his plan in a document for us to review. No word. I send another email. His assistant says he is out of town and has no cell phone coverage. I email again later. Again, assistant says he is unavailable right now but will get back to me. Assistant sends her usual monthly email stating interest due. I say her boss is working on a new plan and I'm waiting to hear from him. She says, "Understood." Then he files a lis pendens as soon as the interest is 30 days late. Furthermore, he states he no longer considers us "contractors", therefore he won't pay the draw money due to us, which we use for among other things to make the monthly interest payments. A reversal of how we have worked with him previously and a clear violation of our contract with him. So he has us trapped and conned.
So far, I have won at every stage of the legal process. Judge said no to his lis pendens because the contract requires arbitration. Arbiter did a summary judgment which we successfully had vacated. Now we are back to having to go to arbitration. I have spent $50K so far in legal bills and now my attorney wants another $20K or he will walk away. Unreal. I have 5 houses the lender will not let me sell (he refuses to release his lien) so profits I was expecting are not there. Further, I have paid out money for rehab work that the lender still owes me for. Then $50K in legal fees. I'm tapped out.
Is justice really only for those with money? Why is it that a criminal gets a free attorney? Am I really going to lose a valid case because the other guy has more money to spend on attorneys? What can I do?
So the lender leaves the next day and I send him an email asking him to put his plan in a document for us to review. No word. I send another email. His assistant says he is out of town and has no cell phone coverage. I email again later. Again, assistant says he is unavailable right now but will get back to me. Assistant sends her usual monthly email stating interest due. I say her boss is working on a new plan and I'm waiting to hear from him. She says, "Understood." Then he files a lis pendens as soon as the interest is 30 days late. Furthermore, he states he no longer considers us "contractors", therefore he won't pay the draw money due to us, which we use for among other things to make the monthly interest payments. A reversal of how we have worked with him previously and a clear violation of our contract with him. So he has us trapped and conned.
So far, I have won at every stage of the legal process. Judge said no to his lis pendens because the contract requires arbitration. Arbiter did a summary judgment which we successfully had vacated. Now we are back to having to go to arbitration. I have spent $50K so far in legal bills and now my attorney wants another $20K or he will walk away. Unreal. I have 5 houses the lender will not let me sell (he refuses to release his lien) so profits I was expecting are not there. Further, I have paid out money for rehab work that the lender still owes me for. Then $50K in legal fees. I'm tapped out.
Is justice really only for those with money? Why is it that a criminal gets a free attorney? Am I really going to lose a valid case because the other guy has more money to spend on attorneys? What can I do?
