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Hi: I have an escrow pending for my house but the Buyers has already passed the allowed Contingency Period and not given us any release notice. I just gave them’ Notice to Perform’ or Seller will Cancel. Do I have any recourse?

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In Escrow Now. Escrow to close in 30 days by Aug 7, 2023

  1. I’m the Seller. We gave the Sellers 17 days Contingency period for Appraisal, Loan Approval & Inspections from July 6, 2023.
  2. Up to now, they didn’t’t come back to us with any Contingencies Release Notice. 
  3. Asking us that they would like to Final Walk-thru our house on this coming Sunday (July 28, 2023).
  4. Can they do that? Can I refused them coming into our house?
     

Therefore, I gave, them a ‘Notice to Perform or I would Cancel the Contract today (July 28) until July 31. We lost time and stressful periods. Do we have a recourse for keeping their Earnest Money Deposit.? Thanks. 


Overdue Contingency Period in Real Estate Transaction: Exploring Recourse Options

The situation you have outlined is not uncommon in real estate transactions. You, as the Seller, granted the Buyers a 17-day contingency period for appraisal, loan approval, and inspections starting from July 6, 2023. However, this period has elapsed without the buyers releasing the contingencies. They now wish to perform a final walkthrough of the property on July 28, 2023, and you have issued them a 'Notice to Perform' with a deadline of July 31. Understandably, this situation is causing stress and you are wondering about your rights, including whether you can keep the Earnest Money Deposit.

Relevant California Real Estate Laws

  1. California Civil Code Section 1950.5 - Regarding Security Deposits
  2. California Civil Code Section 1940 - Rights and Obligations of Landlords
  3. California Civil Code Section 1961 - Notice of change of Ownership

The detailed information about these laws can be found here.

Potential Solutions

The potential outcomes depend largely on the specifics of the contract you and the buyers signed. In most standard contracts, once the contingency period has elapsed, and if no extension was granted, the buyer is at risk of losing their Earnest Money Deposit. This is especially true if you as the seller have provided them with a 'Notice to Perform'.

On the topic of the final walk-through, it's typically a common procedure before closing, however, you have the right to refuse it based on the contingency period elapsing. I recommend you find the right lawyer to help guide you through this situation.

Estimated Costs for Legal Services in Hacienda Heights

Service Estimated Cost
Initial Consultation $150 - $300
Review of Purchase Contract $500 - $1,000
Handling of Dispute $1,000 - $5,000
Property Closing Services $800 - $1,500

Please note these are estimates and actual costs may vary depending on the attorney cost, experience, and the specifics of your situation.

Seeking Further Information

It would be beneficial to have more details about the Purchase and Sale Agreement you signed with the buyers. This could help to understand your options better.

Please consider these three important questions:

  1. What are the exact terms specified in the contract regarding the contingency period and what happens after its expiry?
  2. Was there any extension granted for the contingency period?
  3. What exact terms are laid out in the contract regarding the final walkthrough?

By answering these questions, we can help you better understand your situation. Feel free to ask a free legal question if you need more assistance.

Disclaimer

This response is intended to provide general information about your described situation and does not constitute legal advice. No attorney-client relationship exists as a result of this response. Always consult with a local attorney for specific legal advice.


Navigating Delays in Real Estate Transaction Contingencies: A Detailed Overview

In your scenario, you are the seller in a real estate transaction where the buyers have exceeded the agreed-upon 17-day contingency period (from July 6, 2023) for actions such as appraisal, loan approval, and inspections. The buyers have not provided you with any release notice for these contingencies, yet they've requested a final walkthrough of the property. In response, you've provided a 'Notice to Perform' with a deadline of July 31. You're understandably concerned about the delay, the impact on the transaction, and potential recourse options such as retaining the Earnest Money Deposit.

Applicable California Real Estate Legislation

  1. California Civil Code Section 880.020-880.050 - It regulates the conditions related to performance of obligations in contracts and could be referred to in cases where buyers are delaying the contingency process.
  2. California Civil Code Section 1675-1684 - This legislation outlines the stipulations and recourse related to 'Liquidated Damages' in real estate purchase contracts, which can sometimes include Earnest Money Deposits.
  3. California Civil Code Section 1102 - This section deals with the disclosure requirements in real estate transactions.

For detailed reading, these laws can be accessed from the official California Legislative Information website.

Detailed Solutions and Recourses

Your options heavily depend on the exact terms of the Purchase and Sale Agreement signed between you and the buyers.

  1. Regarding the Contingency Period: Typically, the buyer risks losing their Earnest Money Deposit if the contingency period has passed without them releasing the contingencies, especially if a 'Notice to Perform' has been served by the seller.

  2. Final Walk-through: Generally, final walkthroughs are a standard procedure before closing a sale. However, if the buyers have not fulfilled their contract obligations, you may have grounds to refuse their request. The specifics of your contract will dictate this.

  3. Earnest Money Deposit: If the buyers fail to fulfill their contractual obligations, including meeting the timeline of the contingency period, you may be entitled to retain the Earnest Money Deposit as per California Civil Code Section 1675-1684.

These are complicated matters, and you should find the right lawyer specializing in real estate to guide you through your situation.

Estimated Legal Costs in Hacienda Heights

Service Estimated Cost
Initial Consultation $100 - $400
Contract Review $500 - $1,500
Dispute Resolution $2,000 - $7,000
Property Closing Services $1,000 - $2,500

These are rough estimates. Actual costs may vary significantly based on the specifics of your case, the attorney's experience, and their fee structure.

Further Clarification Needed

To provide more precise guidance, it would be helpful to understand the exact terms of your Purchase and Sale Agreement.

Consider these questions:

  1. What are the specific terms in your contract about the contingency period and the consequences of its expiry?
  2. Have any extensions been granted for the contingency period?
  3. What are the exact stipulations regarding a final walkthrough in your contract?

Your answers to these questions will provide more context. If you need more assistance, feel free to ask a free legal question.

Disclaimer

This response is intended to provide a general overview of your situation and does not constitute legal advice. An attorney-client relationship is not created from this interaction. For specific legal advice, consult a local attorney.

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If you are having legal problems, you can get free legal assistance from lawyers in your area. We assist you to find and compare law firms in your area by clients' reviews, prices (legal fees), and other parameters. You can ask a legal…

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Comments: answer this question

"Hi: I have an escrow pending for my house but the Buyers has already passed the allowed Contingency Period and not given us any release notice. I just gave them’ Notice to Perform’ or Seller will Cancel. Do I have any recourse?"

Hacienda Heights Real estate attorneys

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Written by Counselor
Sat, 07/29/2023 - 09:45

Case Studies on Real Estate Transaction Delays and Resolutions

Below are a few examples of issues similar to yours that may provide insights into how they might be resolved.

Case 1: Delay in Removing Contingencies

In one case, a buyer did not remove their loan contingency within the contractually agreed period. The seller, like you, was stressed by the delay and unsure how to proceed. They sought legal advice and were advised to send a 'Notice to Perform' to the buyer, giving them a specific period to remove the contingency or risk the cancellation of the contract.

The buyer, upon receiving the notice, was able to expedite their loan approval process and remove the contingency within the stipulated time. In this case, issuing the 'Notice to Perform' helped to move the transaction forward.

Case 2: Refusal of Final Walk-through

In another case, the buyer wished to perform a final walk-through after the expiry of the contingency period without providing a release of contingencies. The seller felt uncomfortable and decided to refuse the final walk-through until the contingencies were released.

After consulting with their attorney, the buyers released their contingencies in writing, and the final walk-through proceeded. Ultimately, the sale was successfully closed.

Case 3: Retaining the Earnest Money Deposit

In a third case, the buyer failed to fulfill their contractual obligations within the contingency period, and no extension was requested or granted. The seller served a 'Notice to Perform' and subsequently cancelled the contract when the buyer failed to act.

The seller sought to retain the Earnest Money Deposit, citing the buyer's failure to perform. With the help of their real estate attorney, they successfully claimed the deposit. This case underscores the importance of understanding the specific terms in your contract regarding the Earnest Money Deposit.

Legal Support and Resources

Each of these cases demonstrates the importance of obtaining legal advice when navigating complex real estate transactions. You may find it helpful to compare lawyers in your area to find a legal professional with the right expertise.

Disclaimer

These cases are provided as examples and may not reflect the outcome of your situation. They do not constitute legal advice. Always consult with a local attorney for specific legal advice. No attorney-client relationship exists as a result of this response.

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