Legal Question in Real Estate Law in California

Re: Contract not finalized, how long is it valid?

In California a buyer obtains substantial rights when the standard 'Real Estate Purchase Contract and Receipt for Deposit' is signed by the parties and the deposit is tendered. The contract is binding on the parties and either can sue for specific performance by the other, subject of course to the fulfillment of any preconditions mentioned in the contract, such as financing, pest inspections, etc.

However, just as the parties can make a contract by their mutual agreement, so can they unmake (rescind)it by mutual agreement. Whether this particular contract was rescinded by agreement of the parties cannot be determined by the brief facts given; however, if the buyer 'took back' the deposit check (and this was OK with the seller), there is some evidence of an agreement to rescind the contract. Taking back the deposit also produces a 'failure of consideration' which could also render the contract void.

Is there an actual dispute between the parties? Was the transaction being handled by licensed real estate agents or brokers? These and other questions may determine the proper handling from here on.

Your relative should try to get a written statement from the buyer that the transaction is canceled by mutual consent. If there is an actual dispute, the owner should contact a lawyer, but as a starting point address the problem to the real estate professional who represented the seller.