I was in a contract for my condo, and the buyer decided to cancel escrow 7 days before escrow was due to close. The buyers agent claims that because they had not removed the contingencies, we are obligated to return the $5,000 deposit that the buyer placed in escrow. We met the contingencies, and even sent a notice to perform about a week prior to them conceling to have them complete the paperwork to removed them since they were complete but got no response.
The buyer was able to secure financing, and the reason given for the canceling of escrow was family financial issues (he had to loan someone money). The buyers lender stated that he even gave the buyer other financing options to decrease the amount needed for his down payment, but he did not want to go that route. As a result, I am now stuck with two mortgages and am wondering if this is a breech of contract that would allow me to keep the deposit money towards my monthly payment on the condo until I find a new buyer.
4 Answers from Attorneys
I'd think this situation calls for a full review of the exchanged documents and the timing of them, but as a preliminary opinion based on your side alone, there is a strong flavor of breach of contract by your buyer. My advice is to take all the deal documents to a local real estate specialist and ask for his or her opinion before you make any concessions like returning the deposit.
You can try to keep it, and you could even try to sue them for breach, but you should consult with counsel to see if either is a realistic option, considering the costs and attorney fees you'd incur in litigating the issues.
If serious about consulting for a reasonable charge for review of all the documents and facts, feel free to contact me.
I don't know what the contingencies are, but it sounds like to me that the contingencies and their removal are the central issue to the whole problem. An attorney would have to review the contracts and go over the matter with you.
Your answer depends on the specific terms of the contract and the facts related to the status of the contingencies. You really should consider counsel for evaluation.
On the other hand, your sending a claim letter to escrow demanding that they send you the funds and insisting they not release them to the other party because of the reasons you state, will likely result in escrow freezing the funds. In view of the amount at issue, presumably the parties will enter into an settlement agreement directing escrow what to do. Given the amount at issue, it may not be worth a long involved legal fight. I'm confident that , in most cases, the parties can work out a reasonable settlement of the dispute as to entitlement to the deposit. If not, the lawyers will likely cost you more than it is worth.
While this sounds like a sorry state of affairs, it is true that our justice system often fails to do what is right in any given case. In one like yours, "justice" is likely to expensive to allow you to get the right answer. Instead you may need to be satisfied with the best result for you.This gratuitous response does not create an attorney client relationship.
The advice provided herein is generic, may not apply to your circumstances and is not to be relied upon in your actions. An attorney client relationship is created only upon execution of an engagement letter hiring me or my firm. .
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