Legal Question in Real Estate Law in Oregon

Earnest Money Deposit Forfeiture

I signed an Earnest Money contract with a builder to construct a new home with a $500 lot reservation and a $2500 deposit. The builder would not sign unless the $2500 was non-refundable. The home was to be completed by 12/99. There were several contingencies for the builder to meet. None of these were met, ground was never broken, and the builder has now filed in small claims court to get the full $3000 on deposit. Do I have a case if he never performed on items including providing a list of his subcontractors, a description of materials, a copy of the plans, etc. by 10 days after acceptance? I also found out after I signed the contract that the plat was not approved by the city, and that there was no way he could start construction, nor finish the home by the 12/99 completion date. Thank you.


Asked on 4/25/00, 6:28 pm

1 Answer from Attorneys
Michael Zusman Evans & Zusman, P.C.

Re: Earnest Money Deposit Forfeiture

Go to small claims and defend the action based on exactly the grounds you mentioned in your posting. It seems to me that, because the contractor breached some pretty essential elements of the contract and omitted to disclose that his plat was not approved, that you should not be obligated to pay over the earnest money. In fact, I would counterclaim for a refund of my $500, assuming you actually paid that. Good luck, and let me know how it turns out.

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Answered on 6/06/00, 10:32 am


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