Legal Question in Real Estate Law in New Jersey

Breaking a contract due to down payment

Ihave entered into a contract to purchase a townhome, I have been approved for my mortgage, and the earnest deposit was made, the down payment has not been given yet as I have a home for sale,that home was under contract and the buyer withdrew when the septic did not pass, I am drawing equity from that house for the down payment, my question is the new septic is as much as the down payment, I have considered backing out of the property I am purchasing, but was weary of a lawsuit from the present owners, thinking the equity would be repaid in a few months, which is now not the case, I also have not retained an attorney for the new house, and closing is to be on march 30, 2000, not much time, and what could happen should I back out with only a month to closing


Asked on 3/01/00, 11:12 pm

1 Answer from Attorneys
Miriam Jacobson Retired from practice of law

Re: Breaking a contract due to down payment

Your ability to back out of your contract to buy another house is determined by what the contract says. If you back out without a reason that may be permitted in the contract, you may still be responsible for either the full purchase price or for going ahead with the settlement. It may be possible for you to get an extension of time for going to settlement, to allow you to fix the septic tank problem on your current home and then go to settlement. But you need to consult with a real estate attorney who should review both contracts, the one to sell you current home, and the one to buy your next home, before you make any decisions.

Offices in Collingswood NJ.

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Answered on 3/20/00, 4:55 pm


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