Builder did not inform of changes to the house I’m buying. I want my deposit back.
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Builder did not inform of changes to the house I’m buying. I want my deposit back.
I’ve waited months for this condo to be finished. Everything was going fine until our walk-through when to my shock that several of the windows were far smaller than the ones shown in the model about 1/4 the size. I was never informed about this prior. They can’t/won’t change it. If they had told me before hand it would be like this, I would have never agreed to purchase. Anyway, am I legally entitled to my EMD? I’ve gone over my contract and there is a contingency on the loan I’ve cancelled my application already. I’ve not signed any contingency removal forms either. There is also no closing date set in the contract. Both seller and I had assumed we’d be done by the end of the month. Can I expect my EMD back without hassle or should I seek legal representation?
Asked on June 25, 2018 under Real Estate Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
If you cancelled your loan application, YOU will be in breach of your contract: a loan contingency is for when you are denied a loan through no fault of your own. The law does not allow you to get out of a contract by your own actions. So if you cannot close because you cancelled you loan, you will lose you deposit and possibly (depending on the exact terms of the contract and circumstances) could be sued for additional amounts as well.
If the windows are much smaller than that you were shown and what induced or caused you to agree to purchase the home, that may be fraud (a misrepresentation made to induce you to enter into the transaction--e.g. "lying" about the design and size of windows to get you to buy) or breach of contract (if the building specs are in or attached to the contract and they are violating them). Fraud or breach of contract could provide grounds to get out of the contract and get you deposit back.
Note, however, that if there are building specs or designs attached to the contract and they specify the size windows you are in fact getting, then there is no fraud (since you were given a document specifying what your windows will be like and you accepted that by then contracting to buy the home) or breach of contract (since they are building the home according to what the contract says). Your rights vis-a-vis the windows depends on the terms of the contract and of any marketing materials you relied on in deciding to buy. You should bring the contract, marketing materials, and any correspondence with the developer/building to an attorney to review wth you.
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