Legal Question in Real Estate Law in California

Re: Seller not releasing the contract and not getting escrow deposit back

A contract to purchase ususally has numerous contingencies through which you can cancel a purchase and receive your deposit back. One of those is generally financing. If your lender says you can't get the loan due to possible layoffs with your company, you can't buy the house.

Someone should review the contract for you, whether your realtor or an attorney. There are also statutory penalties for refusing to sign a release of escrow for no valid reason.

Finally, you can sue the seller and the title co. (they must be included as a defendant in order for an order to affect them) for return of the deposit. Then file a lis pendence against the property, which will put a cloud on title and make it difficult for the seller to sell the property to someone else.

Of course, all of this depends on what your contract says.

Re: Seller not releasing the contract and not getting escrow deposit back

I would be very cautious about filing a lis pendens against the property. This does not appear to be a proper use of a lis pendens and if it prevented or delayed a sale to another buyer, you could be liable for damages under a slander of title theory.

You are not necessarily entitled to the return of your deposit. Unless your agreement to purchase contains a condition that can be invoked in good faith (and not as a lame excuse) as a reason for backing out, you are in breach of contract and subject to the deposit-forfeiture clause of the contract.

Re: Seller not releasing the contract and not getting escrow deposit back

Your first step would be to review the terms of your contract (and any conditions attached thereto) and the escrow instructions. Depending on the facts of those issues, you will know how to better proceed with recovery of your monies, if any.

This is general information that I hope has been helpful to you. However, you should always obtain legal counsel familiar with your specific circumstances. We may be able to assist you with your legal issues. If we can assist you in the future, please contact us at www.unalaw.com and somebody will assist you as soon as possible.