UPDATED: Oct 1, 2022
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I was ready to close on a property but couldn’t do it because seller never disclosed that she had declared bankruptcy a few years ago. I have incurred in unforeseen expenses, such as rent and storage, because of this and on top of everything the seller refuses to sign the release of earnest money.
Asked on September 28, 2017 under Real Estate Law, Illinois
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
You sue for the release of the earnest money. When the seller is the cause of a contract being breached or violated (e.g. bieing unable to close), the seller is NOT allowed to keep the deposit but must return it. You may also be able to recover at least some of those costs you mention, which you incurred only due to her breach. You would sue based on both breach of contract (violating the contract) and also based on fraud (lying about something material or important to get you to enter into a contract and giver her your money--such as lying about her ability to close and transfer title).
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