Earnest deposit returned
UPDATED: Oct 1, 2022
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Earnest deposit returned
If a seller did not close by the date of
April 30 as on the agreement and I did
not sign any agreement to extend the
deadline, until May 22, can I get my
Asked on May 28, 2019 under Real Estate Law, Michigan
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 3 years ago | Contributor
IF you had sent them a "time is of the essence" letter indicating that they needed to close by a certain date (and generally providing at least some explanation of "why," such as you are incurring costs due to the delay; needing some place to live; etc.) and they failed to meet that date, they'd have to return your earnest money. But because only "material," or important, contractual violations allow you to terminate a contract and get your money back, if you did not indicate to them that the closing date was critical or material, then if you refused to close because you "got tired of waiting," they'd usually be able to keep the deposit.
We say "usuaully" becasue there is a subjective element to this: depending on what correspondence you exchanged, how long the prior two extensions were, whether they had set a third date and when it was, etc., it's possible that were you to sue for the money, that a court would find in your favor and order its return. But if you did not send a "time is of the essence" letter, that would definitely hurt your odds of winning.
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