Legal Question in Real Estate Law in Florida

Liability for partial deposit

Last August, I went into purchase agreement with a builder to build a $360,000 home with a closing date of March 2008. Due to the fact that I had recently sold my house and received very little. I requested and paid partial payments of the 5% deposit up to $10,000 and I still owed them about $7K on the deposit. Last week I saw that the base price dropped $45,000 on the same model. I wrote a letter asking for a reduction and all I received was a reduction of $10,000. I wrote a check for the remainder last week, but since I found out about the drop in price, I told the bank to stop payment on the check so I still have the $7K remainder to the deposit left to pay.

I'm considering canceling the agreement, but I'm worried that I may still owe the remainder of the deposit ($7K). Will I owe that if I walk away considering that event the reduction will not cover the drop in price and that I would be forced to get into a house that has already lost value.


Asked on 2/18/08, 7:39 am

1 Answer from Attorneys
Marlyn Wiener Marlyn J. Wiener, P.A.

Re: Liability for partial deposit

NOTICE: The information provided in this response is not, nor is it intended to be, legal advice. Many factors contribute to providing legal advice, including the specific facts of a situation. You should consult a competent attorney in your jurisdiction for advice regarding your individual situation. By reading the "Response" to your question or comment, you acknowledge that the opinion expressed is not intended to, nor does it, create any attorney-client relationship, nor does it constitute legal advice to any person reviewing such information, nor will it be considered an attorney-client privileged communication. If you do not agree, then do not read any further.

You are now facing the unfortunate situation confronting many others; being obligated to purchase a home that is worth less than the contract price. You do not have an automatic right to cancel a contract because the builder is now offering the same model at a lower price. What is critically important is what rights your contract gives you to cancel, if any at all. If you have no right to cancel, and do not complete the closing, you may be held in default and face the possibility that the builder could sue you, not only for the balance of the deposit but to perform all of your obligations under the contract. I strongly suggest that you immediately hire a real estate attorney to advise you since you are facing a closing date in March.

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Answered on 2/18/08, 8:30 am


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