Cherokee County's Purchase of the Cornerstone Building in Murphy North Carolina - Is This $1.35 Million Transaction Voidable By Taxpayers?

By
Real Estate Agent with Country Homes and Land Murphy NC Realtor

A controversial spending spree by 3 lame duck County Commissioners in their last months in office has incensed some taxpayers in Murphy North Carolina and Cherokee County.  After attending the September 7 meeting of the County Commissioners, I did some research into their purchase of the foreclosed Cornerstone Building on Hwy 64 West in MUrphy on August 13, 2010 for $1,350,000.

                      

I found numerous questionable issues, which I detailed in my last post What REALLY Went On When Cherokee County Commissioners Purchased the Foreclosed Cornerstone Building in Murphy North Carolina for Over $1.3 Million on August 13, 2010? 

My biggest concerns were these:

1.  The purchase agreement was dated August 9, 2010 and the sale was closed on August 13, 2010

2.  The purchase agreement showed $13,500 in earnest money was paid to the listing agent, but no credit for earnest money was on the closing statement

I have a copy of the purchase agreement, obtained from County Attorney Scott Lindsay.  Here's my problem with item #1 above -

If you're buying a foreclosure, and the seller makes you sign a separate agreement stipulating that you're buying it  "as is," wouldn't you want to make sure there are no problems with the building, including foundation, structural and mechanical systems?

How can anyone do an adequate job of due diligence when you're spending over $1.3 million of taxpayer's money to buy a foreclosed building and you close the deal in only 4 days? 

County Manager David Badger was questioned about inspections on the Cornerstone Building at the last commissioner's meeting on September 20, after these issues were brought to light.  He said he did 6 walk-thru's of the building in the weeks prior to the closing.

"So you did that over the summer?" he was asked by one of the audience.  "Did you ever turn on the heating system?"

Mr. Badger never answered the question.

Another concern about buying this building "as is" is the fact that the property it is built on was the site of a major construction project several years ago, dealing with an underground stream that runs through the area.  Several businesses up the road a few miles have had problems caused by the same stream.  Did the commissioners have anyone examine the foundation and the surrounding parking lot?

But here's the biggest concern of all - a contract was written and signed saying that $13,500 earnest money was paid to the listing broker.  Yet no earnest money was shown on the closing statement.  The County Attorney said at the September 20th meeting that there were no other oral or written agreements between the parties, but that check was never written to the listing broker.  I am not an attorney, so I have a question -   

Is this offer to purchase a valid contract?  Is it voidable if consideration was required and shown to have been paid but no consideration was ever paid? 

Can the new County Commissioners who will take office after the November election overturn the sale of the Cornerstone Building? 

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North Carolina Cherokee County Murphy
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Tags:
murphy nc foreclosures for sale
cornerstone building in murphy north carolina
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