Am I entitled to earnest money if we’re out of the due diligence period due to an error on seller’s disclosure?

In the seller’s disclosure, I stated the home was on sewer and it is actually on septic. The buyer wants to terminate. We are out of due diligence period.

Asked on July 13, 2017 under Real Estate Law, Georgia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, you are not entitled to the earnest money. You made a material (important) representation--the difference between sewer and septic is a significant one. That misrepresentation legally constitutes fraud, which at the other party's (the buyer's) option voids the contract, allowing them to get out of it *and* get their money back.

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