How long can earnest money be retained by a real estate agent if the deal does not transpire?
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How long can earnest money be retained by a real estate agent if the deal does not transpire?
I live in another state and placed a contract on what was suppose to be my retirement property. However, due to inclement weather while waiting at the airport the airlines cancelled my flight I immediately informed the agent and he informed me he understood and that my deposit would be returned to me. I spoke to him again via text and email. He assured me he would speak with the owners who agreed to return my deposit. Now, 2 weeks have passed and I have not heard back from him. Something doesn’t seem quite right. Should I seek legal representation to initiate action to get my deposit back?
Asked on September 24, 2018 under Real Estate Law, Virginia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
1) He cannot return the money without the seller's agreement or a court order that he return it. The earnest money is a deposit and the person placing it can't get it back unilaterally; the other side has to concur he should get it back, or there has to be litigation and a court order for its return.
2) If they are not returning the money to you, you could sue for it, but would have to prove you are legally entitled to it. If you cancelled due to a cancelled flight, it is very unlikely that you have a right to get it back: you generally can only get the money back if there is some refund or cancellation provision in the contract allowing you to get it back under these circumstances, or if the seller breached or violated his obligations in a material or important way. A weather-related issue, not being the seller's fault, would not normally require the money's return.
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