If my buyer backed out of our contract past the back out date because all of a sudden they don’t do have the money, what are my rights?

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If my buyer backed out of our contract past the back out date because all of a sudden they don’t do have the money, what are my rights?

The closing date was within 1 week. There is a 30 day back out contingency date in the contract that has since been passed for 24 days.

Asked on May 4, 2017 under Real Estate Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

They are in breach of contract, since once they can no longer terminate a contract without penalty (e.g. as you put it, are past the "back out date"), they are obligated to go through with the transaction. Their monetary problems do NOT legally exhonorate them from their contractual obligations. You may certainly keep the deposit as damages for their breach; if your provable costs from the breach exceed the deposit (e.g. the carrying costs, for the additional number of months you have to now hold the house before selling it), you could sue them for those additional costs or losses, too, unless the terms of the contract limit you to the deposit as compensation (or as "liquidated damages," as it might be called).


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