Legal Question in Real Estate Law in California

Is it legal for Seller to keep my entire deposit (3% of purchase price) when I cancelled the purchase due to hospitalization for heart/blood pressure problems and can not undertake the stress of moving and selling current residence. I'm a 79 year old widow and certainly could not prevent what happened and notified seller of same. He has a buyer for the property. I will abide whatever is legal. The zip code below is the property location - my zip code is 90230.


Asked on 8/11/09, 8:49 pm

3 Answers from Attorneys

I am assuming this is a house? If so, as a general rule, yes, if you initialed the "liquidated damages" clause in the contract. If you did not initial the liquidated damages clause, then the seller has to prove the extent of his damages, and if he has the ability to sell the property to someone else for the same or higher price, he has incurred little to no damages and should return your deposit.

Chances are you did agree to the liquidated damages clause, which says the seller can keep your deposit if you default without having to prove his actual damages. If that is the case, you could try either (a) consulting an attorney to review the contract and the complete facts (maybe you cancelled before you became obligated to close??), or (b) appealing to the seller's sense of "fairness", or both.

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Answered on 8/11/09, 9:59 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Sorry to say, yes.

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Answered on 8/12/09, 12:22 am
Terry A. Nelson Nelson & Lawless

If you had a valid contract for sale of a house, and you 'breached' it by refusing to close escrow, then yes, he can force the sale or seek damages. Most RE contracts provide for agreed amounts in the event of breach. Your attorney may be able to use your situation to negotiate a settlement on more favorable terms that current. If serious about doing so, feel free to contact me.

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Answered on 8/12/09, 1:14 pm


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