Legal Question in Real Estate Law in California

Re: Deposit on new construction.

I'm a little confused by your post. Near the end, you say that you signed a contract without any contingencies. At the beginning of the post, you state that "if I don't get approved then I would get my deposit back." Financing is a contingency in many purchase contracts, however, it is not a contingency unless expressly stated as such in the purchase agreement. You need to review, or have an attorney review the documentation. If you were "told" that financing was a contingency, but it was not actually contained in the purchase agreement, you may not have any grounds to cancel and receive a return of your deposit.

With respect to the "upgrades", most new-home builder purchase agreements I have reviewed (and lately, we are reviewing a lot of these with an eye towards cancellation) state that any deposit made towards upgrades is not refundable regardless of why you cancel escrow. That is a legitimate, enforceable provision in the agreement. You may not be able to recover $4,000 of your deposit regardless of why you elect to cancel.

I would suggest having an attorney review the agreement and advise you as to how best to proceed. If you are in Southern Califonrnia, please feel free to call our offices.

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