Legal Question in Real Estate Law in California

Re: default of lease

If the lessee does not exercise the option by the date specified in the lease, the option expires. Generally, to be enforcable consideration must be given for the option. If the "non refundable down payment" was given to secure the option, then the "down payment" will generally be forfeited if the option is not exercised. The terms of the agreement control, but generally an option must be exercised by one party giving the other written notice of exercise of the option prior to the date the option expires.

Re: default of lease

It would be more accurate to think of what the option holder has done, or failed to do, in terms of "lapse" or "expiration" or "election not to exercise" rather than default. Default has negative connotations of failure to do something one was obligated to do. An option holder is not obligated to do anything; the choice to exercise or let the option lapse is up to him. Of course, the option holder may be in default in some other way, but not by failure to exercise the option alone.

Re: default of lease

The person probably defaulted. You may be able to receive the funds from escrow, but your agreement may have an arbitration and/or mediation clause. Please call me if you have any questions.