If the seller isn’t signing the cancellation, how long do they legally have to do it?

Get Legal Help Today

 Secured with SHA-256 Encryption

If the seller isn’t signing the cancellation, how long do they legally have to do it?

We were buying a home but the loan didn’t go through for no fault of our own. We have a right to our earnest money returned but the seller isn’t signing the cancellation papers. How long do they legally have to do so and what can we do? It’s been 17 business days.

Asked on June 19, 2018 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Was there a "contingency," or provision, in the contract of sale, commonly called a "finance contingency" or "mortgage contingency," under which you are entitled to your earnest money back if you failed to get financing--and, if so, are you in full compliance with it? If so, then yes--you are entitled to your money back, and if the seller won't release it, you can sue the seller for "breach of contract," or violating the terms of the agreement. In that lawsuit, you can get a court order that the seller release the money.
If you did not have a finance contingency, however, or there was one, but you did not comply with it, you are not entitled to your earnest money back. When the buyer cannot go through with the purchase, even if the reason is not their fault (such as if the loan does not go through), the seller can keep the earnest money or deposit unless there is a contractual porovision (a contingency) to a the contrary. Without a contingency or similar provision entitling you to the money, it belongs to the seller because you are breaching, or violating, the contract by not being able to go through with the transaction.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption