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Contract Law Question: Can creditor who verbally agreed to payment over time change to demand payment in full?

The creditor is a Condominium Association led by an aggressive President who fooled Co-Owners into believing they all needed an expensive new roof when only limited repairs were needed. When Co-Owners were misled into approving it, the President demanded payment in full but allowed one Co-Owner to pay over time. In this, the President / Condo Association became a creditor and had a verbal contract with the Co-Owner for time payments. Time payments were made and the President cashed the first 3 checks from the Co-Owner. Then realizing they needed money now, the President demanded payment in full from the Co-Owner and threatens to put a lien on the Co-Owner's condo and possibly force them into bankruptcy or foreclosure if payment in full is not made. The Co-Owner obliged by all terms of the verbal contract but when the President changed her mind on the payment terms, she rejected all subsequent installment checks. There is first the case of Fraud by the President to fool Co-Owners into a vote for a roof they didn't need (and evidence that the President had a kick-back deal with the roofer to profit from awarding them the exclusive, insider's contract.) But that is not what this question asks. This question asks: 1. Is not the verbal contract to accept payments over time BINDING on the President / Condo Association by virtue of the President cashing (signifying ACCEPTANCE of terms) the first few installment checks? 2. By rejecting installment checks after the first few, does this constitute DEBT FORGIVENESS such that the Co-Owner does not owe that money anymore? 3. As this is in the state of Texas where Homestead laws apply, are there any special limitations which would declare the President's actions to file a lien on the Co-Owner's condo (their only residence) and threaten foreclosure as either illegal or unenforceable? 4. By virtue of the fact that this verbal contract for time payments came about as a result of the President's fraud giving rise to the Co-Owner's debt to the Condo Association, could the contract itself be declared VOID or VOIDABLE? And if so, does not the fraud have to be proven first before the verbal contract be declared void or voidable? Note that there appears to be no default by the Co-Owner under the terms of the verbal contract which might justify the President / Condo Association accelerating payments to demand payment in full now. The deal the President made was a bad one and not to the Condo Association's benefit, but it is a verbal contract and may be binding. Furthermore, there was no discussion of INTEREST to be paid by the Co-Owner for installment payments. 5. Does the President or Condo Asssociation have legal recourse to demand that interest be paid by the Co-Owner for allowing time payments not afforded to any other Co-Owner? Note that there appears to be no default by the Co-Owner under the terms of the verbal contract which might justify the President / Condo Association accelerating payments to demand payment in full now. The deal the President made was a bad one and not to the Condo Association's benefit, but it is a verbal contract and may be binding. Furthermore, there was no discussion of INTEREST to be paid by the Co-Owner for installment payments. 5. Does the President or Condo Asssociation have legal recourse to demand that interest be paid by the Co-Owner for allowing time payments not afforded to any other Co-Owner?

Public Comments

1. unfortunately if its not on paper it doesnt exsist, for both sides. If you can prove fraudulism on paper, you have action. But you need to get an attorney right away.
2. "1. Is not the verbal contract to accept payments over time BINDING on the President / Condo Association by virtue of the President cashing (signifying ACCEPTANCE of terms) the first few installment checks?" No. A) The "Statute of Frauds" requires that certain types of contract be in writing to be legally enforceable. Real estate transactions, and transactions over a certain amount, are included. "2. By rejecting installment checks after the first few, does this constitute DEBT FORGIVENESS such that the Co-Owner does not owe that money anymore?" No. To accept partial payments on a debt does not bind the creditor to continue to accept them. "3. As this is in the state of Texas where Homestead laws apply, are there any special limitations which would declare the President's actions to file a lien on the Co-Owner's condo (their only residence) and threaten foreclosure as either illegal or unenforceable?" Filing a lien is certainly legal. Whether homestead laws in Texas would prevent the Condop Association from forcing foreclosure would depend on the specifics of the law, for which you will need to consult a TX real estate lawyer. "4. By virtue of the fact that this verbal contract for time payments came about as a result of the President's fraud giving rise to the Co-Owner's debt to the Condo Association, could the contract itself be declared VOID or VOIDABLE? And if so, does not the fraud have to be proven first before the verbal contract be declared void or voidable?" Unlikely, but possible. To the second part, yes, The situation that caused the debt to be incurred would need to be proven to be fraudulent before the fraud could be used as a basis to set aside the debt. BUT..... that's a no-win anyway. If the debt is ruled invalid that would apply to all members of the condo association. The Association would have to repay the members. Where would the Association get that money? From a levy on its members. So it would be "Good news! You get your $5,000 roof levy back!" "Bad news.... we have to impose a $5,000 levy to repay the roof levy." Richard
3. Probably not.