Can we get a deposit back for misrepresentation on a property?

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Can we get a deposit back for misrepresentation on a property?

The property has no deeds pulled for anything they added in the house. Illegal
work done. The appraisal is a lot less than what the seller is asking for the
house. Now the seller does not want to sell and does not want to give our
deposit back. Are we entitled to get our deposit back?

Asked on October 5, 2016 under Real Estate Law, Massachusetts

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

1) If you are ready and willing to go through with the sale under the terms previously agreed to but the seller will not sell, he is in breach of contract and must return your deposit.
2) Additionally, if the seller misrepresented material (or important) facts, such as that the work on the property was legal, that fraud allows you to void the contract of sale and get your money back. The misrpresentation can be by ommission as well as or in addition to being affirmative misrepresentations: to know that work was illegal but not disclose that critical fact is a misrepresentation.
Breach of contract and fraud can also provide grounds to get moneteary compensation (e.g. of costs you incurred during this process) as well as getting your deposit back.
If the seller will not voluntarily return the deposit, you will have to sue for it; if you have to sue, then you should (as long as you're going to that cost and trouble anyway) seek other compensation, too.


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