Legal Question in Real Estate Law in California

Re: Cancelling Escrow

Escrow can be terminated upon the failure of a party to comply with certain of its conditions within a specified time. First, make sure the escrow agreement itself contains a time limit clause.

It is easier to cancel an escrow if both parties agree and so inform the escrow officer in writing. Here, the buyer may be willing to admit defeat and may cooperate, if asked, especially if refund of deposit is offered.

If the buyer will not cooperate, you should consider retaining an attorney, but you should also discuss the situation with your escrow officer and find out what that particular firm's policies are. Remember that both the purchase agreement and the escrow agreement are binding contracts and setting them aside unilaterally is a lot more complex than rescinding them by mutual agreement.

Fortunately you are the non-breaching party and in a lot better shape to prevail. You probably won't have to, or even want to, file any suits, but the threat of suit is a good way to get the defaulting buyer's cooperation.

Re: Cancelling Escrow

You can almost definitely cancel the transaction, since the buyer has breached the time frame.

The method of doing so could be determined by your contract. It may call for a 24 to 72 hour notice.