Backing out of a land purchase before close

UPDATED: Oct 1, 2022

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Backing out of a land purchase before close

We were purchasing land. The day before close we discovered we were mislead in
the description of the land. We declined the close. We are being told that we are
responsible for all attorney fees and the survey of the land and we forfeit our
earnest monies. Is this correct?

Asked on July 13, 2018 under Real Estate Law, Ohio


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

It depends upon in what way were you misled. A material, or important, misrepresentation about the property would be fraud and would provide a basis to void the contract, in which case you'd get your earnest money back and would not owe the seller anything. But a nonmaterial misrepresentation would not affect the validity of the contract.
Examples: say you were supposed to be buying 2 acres, but the land is really only an acre-and-a-half. A 25% reduction in what you were told you would be getting would almost certainly be fraud. It would also be fraud if it was represented that all of it could be built on or used, but in actually, a large portion is protected wetland.
On the other hand, say that it's 1.9 acres instead of 2 acres, or that it is actually slightly larger (say, 2.2 acres) than advertised; or that it is 2 acres, but the dimensions are different (instead of being 1 acre by 2 acres, it's maybe 1.8 acres by 1.1 acres); or there is some protected wetland, but it's only one small corner--in these cases, the difference between what was represented to you and what you would have gotten is not material or important and you could not void the contract. In this case, you'd lose your earnest money and be liable the seller's costs.
So it depends on what the misrepresentation was, and how serious it was--i.e. did not amount to fraud? Or was it some minor, understandable, and harmless mistake?

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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