Legal Question in Real Estate Law in California
Agent failed to deposit the deposit in Escrow
Buyer walked out of the contact the day we were supposed to close escrow. Buyer did not return any phone calls from Title company. After 3 days, we informed the title company to retain the deposit as liquidated damages. After 3 more days, the title company told the agent had delivered the deposit just one day back (6 days after the contract ended) and the buyer has put a stop payment on the check. Now title company claims they are not at fault and agent is at fault. While the agent, broker and brokerage firm claims they are not at fault and title company is at fault. Please note the same agent represented both buyer and seller. In this process we lost few months and it may take few more months to sell the house. Also we are loosing our option on the new house from builder due to this. Please advice our options.
3 Answers from Attorneys
Re: Agent failed to deposit the deposit in Escrow
The deposit as liquidated damages takes the place of all, the word is all, of your damages in the future and as a result of their failure to purchase the property. Once you cited you are locked in. The escrow companies nondefault they followed instructions. They could just as easily handed you to check in you deposited the check in your bank account in the same thing what happened. Normally they don't hold the check itself but deposited into an escrow account so that is odd. Basically, sue the buyer for the liquidated damage deposit amount in small claims if it is less than $5000. Get to judgment and hopefully collect. The damages are so minimal because of the nature of what you signed. Now, don't blame the agent for you signing that clause as you should have taken the agreement if you didn't understand it to an attorney who could explain the legal effect. Agents while they are quite knowledgeable are not attorneys.
Re: Agent failed to deposit the deposit in Escrow
Your options are to sue both the title company, the agent and the buyer and let the court determine who is at fault.
contact me for a free consultation.
Not an easy case. Liquidated damages clauses are hard to enforce in the real estate context -- the law is uphill on this. I think we can probably make a good case for real damages. Contact me for a free consultation -- 310 266 4115.
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