Can an Arizona property developer keep the purchase escrow if the developer walks away from the project?

Question

In buying a home from an Arizona developer, the contract says that the developer can walk away from the project for any reason and keep the escrow deposit. Is this legal?

Answer 1

I would think that that clause would be unenforceable in court. Such a clause would be unconscionable -- so unreasonable or one-sided as to be unenforceable in a court of law. But, you might have to go to court to get your money back.

If I were presented with such an agreement I'd either walk away from it, or keep the escrow deposit so small that losing it would not have any significant financial impact on me -- maybe a couple hundred $$$ at most.