Legal Question in Real Estate Law in California

I opened up escrow to purchase a condo in the los angeles area. The escrow was contingent on obtaining a loan and satisfactory home inspections. It took around 45 days to get my mortgage broker to sign off on the loan, because the HOA could not provide financial statements, and had to amend the CCRs. The seller extended the escrow from 30 days to 60 days at the end of our initial 30 day escrow period. At around day 45, seller sent a notice to perform, asking me to remove contingencies. Since my loan could not be guaranteed (due to the HOA being such a mess), I did not remove my contingencies. A few days later, the seller apparently tried to cancel my escrow and open an escrow with a cash buyer at a different escrow company, but still within the 60 day extension of my escrow. Can the seller cancel my escrow without my consent before my 60 days are up? Can a seller ask me to perform before they have"performed" and given me the HOA documents that I need to secure my loan? I thought that as long as I was in escrow contract with seller, that I needed to sign an agreement to cancel escrow before they could sell to another party? Wouldn't that be considered a breach in california if they sell to another party within my window, after I get approval to purchase from my lender?


Asked on 3/05/12, 9:20 pm

1 Answer from Attorneys

If they only extended COE, and not contingency removals, and you failed to remove the contingencies, they have the right to cancel and sell to someone else. If providing the HOA documents was actually in the contract with a deadline, that might change things. The trouble with contingencies is that they only give the right to cancel the contract if not met. They don't create a right to enforce the contract. So it is very hard to use contingent obligations in the contract to do anything more than cancel.

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Answered on 3/05/12, 9:55 pm


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