Legal Question in Real Estate Law in California

Re: Seller's Disclosures

I'd go with "cold feet." This a down market, and buyers are using every ruse known to man or beast to avoid their obligations to buy properties when they know or suspect they can buy an equivalent property for a bit less next week.

The countermeasure is to treat a contract as a solemn obligation to perform or pay damages, which it is.

This "deemed" to know business is pure and unalduterated animal excrement. Your agent is right. There is NO obligation to disclose what you truly don't know. That is logical as well as legal nonsense.

Further, an attempt to "reject" a path toward resolution set forth in a real estate contract might be successful to a limited extent, in that a requirement to mediate might not be absolutely binding, but by failing to tender the matter to mediation, the aggressor/plaintiff is likely to lose any right they may have had to recover attorney fees if successful.

If the $3000 is in escrow, I advise being very reluctant to give it up, as I do think you are being bullied and that the deaulting buyer ought to lose the entire deposit, and perhaps (depending on the contract) may be liable for more.

Re: Seller's Disclosures

As usual, I agree with Mr. Whipple, and have little to add.

You are being bullied. Refuse to budge!

Re: Seller's Disclosures

In this case, I thoroughly enjoyed Mr. Whipple's colorfully phrased analysis while nodding my head "yes". You didn't insert your zip code and so I don't know where you're located. Mr. Whipple is in Tomales (about 60 miles from S.F.), Mr. Bennett is in Bakersfield and I'm in Fresno. You have to keep cost-benefit in mind in dealing with this situation, but a letter from your own attorney would probably go a long way in telling the bully that there will be equal pressure applied in return.

Re: Seller's Disclosures

Assuming that you used the standard California Association of Realtors for Purchase Contract, and that you did not amend any of the preprinted language, I disagree with Mr. Whipple.

Several years ago, the C.A.R. contract allowed for "passive" removal of contingencies, which mean that when a contingency period passed, that particular contingency was waived. If the current contract utilized "passive" removal, then the Buyer's contingencies would have been removed by the mere passage of time, and you would be entitled to keep the Buyer's deposit if the Buyer then failed to complete the purchase.

However, A few years ago, the contract was changed to use "active" removal of contingencies, which means that even though the time period for a contingency may expire, that contingency is still in effect until the Buyer removes that contingency,in writing. If the Buyer fails to remove a contingency, in writing by the time period specified in the contract (17 days for most contingencies) then you, the Seller, may give the Buyer a written Notice to Perform, after which the Buyer has 24 hours to remove the contingency. If the Buyer then fails to remove the contingency within the 24 hours, then you, the Seller, may cancel the contract. See Section 14(C)(1) of your contract.

Section 14(C)(2) specifically gives the Buyer the right to cancel the contract, even after the contingency period has expired, until you, the Seller, exercise your right to issue a Notice to Perform and cancel the transaction pursuant to 14(C)(1).

So, based on the facts you've provided, the other lawyer is correct to argue that the Buyer has the right to cancel because you never gave the buyer a written Notice to Perform. You will have to give back the buyer's deposit.

In this case, assuming that the preprinted C.A.R. contract was not changed, the Buyer was not in breach of the contract