Legal Question in Real Estate Law in Maryland

Purchaser refused to buy house

We had a contract to sell our house in May. The buyer got cold feet and decided not to accept the inspection report and refused to buy our house, saying the contract was void. We sold it later at a loss. I know we can sue the buyer, but there are difficulties. The contract provides for inspection of structural, mechanical, plumbing and electrical systems. Can they refuse to buy the house due to other, non related defects? There were certain timeframes by which paperwork was to have been delivered. If the buyer didn't deliver it on time, then they can't complain about the inspection, but our agent went on vacation and doesn't know when the paperwork arrived over the course of a weekend. What do we do with that? The buyers were supposed to have given us a list of defects and a copy of the inspection report. There was no time frame involved. Is there any implied reasonable time frame? When they did give us the list of defects, they faxed us a copy of the inspection report, which was illegible.

What can we do with this mess? We lost about $8,000


Asked on 11/03/00, 11:43 am

1 Answer from Attorneys
Robert Sher Wagshal and Sher

Re: Purchaser refused to buy house

If your inspection contingency clause was limited to the items mentioned in your question, the buyer was in breach of contract for refusing to complete settlement because of items outside the scope of the inspection clause. Once you became aware of his position, you should have immediately protested and instructed the agent holding the good faith deposit not to release it pending the outcome of the dispute. This is why buyers are required to put up earnest money when a contract is made, and is, as a practical matter, the best and often the only source of recovery for contract breach.

If you didn't do this before making a contract with another purchaser, the first buyer will argue that you accepted his cancellation of the contract by your subsequent action. If the agent is still holding the deposit, you should notify him/her right away; if not, your only recourse is to sue the buyer and hope for the best.

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Answered on 11/20/00, 2:44 pm


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