Legal Question in Real Estate Law in Maine
return of earnest money
we gave $5000 to a friend in earnest $$ in a private agreement to buy her house when ours sold. the agreement was to last about 15 months. the $$ was put into an account of her lawyer. our friend died 2 months later. the estate was left to the town library and 2 step children. the lawyer (of our friend) will only return $2500 saying that keeping the house off the market entitles the estate to the $2500. our lawyer said it would cost too much to take to court and we wouldn't recoup lawyer's fees. should we go to small claims court or just take the $2500 and be very very ticked off with him and our lawyer???
1 Answer from Attorneys
Re: return of earnest money
An agreement to sell real estate should be in writing, as should any agreement that takes longer than 1 year to complete.
I am unclear as to if you had a written agreement for the sale, and to what extent there was a written escrow agreement. Since there was a lawyer involved I would think there is some documentation.
Most sale agreements are binding on the heirs of a seller, so the proceeds from the sale should go to the library and you should still be able to close.
If you are trying to get out of the contract, not enforce it, that is another story. The $2,500 earnest money may be a negotiated solution to you not Closing and not covered by any contingency.
If everything was verbal, I would think the lawyer should refund all of the funds, since you would not have the right to force a sale.
Small Claims Court has a limit of $4,500 and they will not hear a $5,000 case. You may want to go back to your lawyer and ask if there are any ethical concerns about the other lawyers conduct if there is no written agreement to hold the money.
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