Legal Question in Real Estate Law in California

Re: get back earnest deposit

This depends. Did you use the standard Calif. Assoc. of Realtors Purchase Agreement?

If you did, and it was not modified, that typically gives you 17 days inspection contingency which basically means you can cancel your contract within 17 days from Acceptance and still get back your deposit.

Further, if the seller, or seller's agent, fails to give you a Notice to Perform (demanding that you remove your inspection contingency), then that contingency continues.

This means that you would continue to have the right, under the inspection contingency, to cancel the contract and get back your deposit until you either removed that contingency (in writing) or you failed to timely respond to a written Notice to Perform.

I know this is a mouthful, but it doesn't even completely cover the issue. Talk to your real estate agent. There is probably a way out as long as you have not removed your contingencies.

Good luck!

Re: get back earnest deposit

A contract containing an unremoved contingency is not necessarily binding, and as the previous answer says, you may be able to back out without being liable for damages.

On the other hand, a person who is contingently liable on a contract has a duty to try to remove the contingency in good faith, and if you just sit around and don't take any reasonable action to remove the contingency, you may lose the legal right to rely upon it as an escape route. For example, there is a case in which the buyer's duty to perform was contingent upon obtaining a loan for a certain amount at a certain maximum interest rate. The buyer failed to make any loan applications. The Court of Appeal held that failure to try to get a loan and thus remove the contingency was bad faith, and found the buyer liable for the seller's damages when he has to take a back-up offer for a lower price.

A contingent contract is not the same as an option!