Legal Question in Real Estate Law in California

Re: deposit to escrow

You need to look closely at the contract you signed.

Typically, real estate purchase contracts will contain some buyer contingencies, which might allow a buyer to cancel the contract within a certain period of time, for certain reasons, and get his/her deposit back.

Re: deposit to escrow

Was there a contingency for a loan? There may be various provisions that allow you to get out of the sale and have your deposit returned.

JOEL SELIK

ENCINITAS, CALIFORNIA

Re: deposit to escrow

Your right to have your deposit returned, or conversely, the right of the seller or builder to retain the deposit, is largely a matter of contract. The principal exception is that the forfeiture of the deposit, if there is to be one at all, cannot be greater than a reasonable approximation of the seller's actual damages. In most home-sale deals, the maximum deposit forfeiture is 3% of the contract price, by statute.

You would be entitled to refund of your deposit if your commitment to buy or build, as set forth in any contract or deposit receipt signed by the parties, was conditional, and the condition did not occur. Very often, the condition that must occur is that the buyer must be able to obtain financing on reasonable terms. The buyer is obligated to make an effort to obtain the financing, but if he or she cannot, the condition is not met and the buyer can back out and obtain a refund of the deposit, or most of it.

Since yours seems to be a contract with a builder or developer rather than a seller of an existing home, the contract is likely to be custom-drafted by the builder or developer, rather than one of the standard Residential Deposit Receipt and Purchase Agreement forms, and you or your lawyer would have to review it carefully to see what it provides.