Legal Question in Real Estate Law in California
Seller attempting to renig on RE Purchase Contract in escrow
I am in escrow with a RE deal that is a ''for sale by owner''
I am the buyer. The contract was drawn up with the contingency that my existing home would be sold and proceeds would go to close escrow. There is not date stated on how long this could take. My home has been in escrow three times in the last 5 months and fallen out due to purchasers not qualifying for loans. Now the seller wants to cancel escrow and sell house to someone else even though we were going to close escrow next week. seller thinks he can get more for the house now. Is our Purchase agreement and escrow a binding contract? What can we do to force seller to abide by contract. We have had a RE Broker look at papers and they tell us seller is bound to our contract because they did not put a ''drop dead'' date on contract. It was just contingent on the sale of our property. Contingency reads ''The closing of this escrow is contingent upon the successful closing of buyers property, Buyers deposit of final funds shall constitute removal of this contingency''
4 Answers from Attorneys
Re: Seller attempting to renig on RE Purchase Contract in escrow
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Re: Seller attempting to renig on RE Purchase Contract in escrow
The contingency is usually binding. However, when no deadline is set, a reasonable time will be implied. Also, real estate contracts (especially the California Association of Realtor ones) generally have other provisions addressing financing, down payments, close of escrow, contingencies. Depending on the contract, the seller may also have a right to require you to remove certain contingencies or prove financing or funds. If you fear the seller will back out, you should have a lawyer review your documents and send the seller a letter. If the seller refuses to sell you the property, you can sue for specific performance (a court order directing the seller to comply with the contract.) Give us a call if you need help. We practice real estate law and have several cases like yours.
Re: Seller attempting to renig on RE Purchase Contract in escrow
Yes, I would tend to agree that you have a contract and that they are bound to it. The issue is whether it has been too long and whether it is unreasonable. I think you are entitled to close on the second house. You may contact me if you need to enforce the agreement as such.
Re: Seller attempting to renig on RE Purchase Contract in escrow
If escrow does close in the following week and you are correct in the language of the contract with no contradictory term, you should close escrow. If the Seller refuses to accept the funds and refuses to sign any required documents, you may be able to take action. A lawsuit for specific performance could be filed but some contracts require mediation or arbitration of any disputes. Please contact us if you have any further questions. We handle cases throughout California.
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