Can I get my deposit back if backout house purchasing contract after attorney review?

Question

I am in new jersey, I recently backed out a house purchasing contract after attorney review. However, the reason for backing out is that the owner failed to disclose that they do not have permit for the finished basement, although they have started applying for the permit after contract was signed, it is highly unlikely that the closing will happen before the date we agreed on due to the pending basement inspection. On time closing is very critical for me. If they had told me the permit issue, my decision to purchase the house would be different.

Answer 1

I do closings in NJ (from drawing up the contract to closing at the table), and every answer you got so far is dead wrong.

I'm amazed that they aren't forcing the sale.

Not having a permit when they signed the contract is not a big deal. The contract normally calls for all permits and such to be furnished at the closing itself, or else monies are held in escrow pending receipt of the permits.

In NJ, closing dates in standard contracts are a guesstimate of the actual closing date UNLESS the date of closing was made a part of the deal as in being an actual condition of the closing, either in the contract or subsequent rider(s).

This is called "Time Of The Essense". That means that the date is a specific performance item, and failure to close on that date is a breach of the contract. And even when it is breached, you still have to go through the notification period and demand to close within 10 business days from that date. You don't get to just walk away and get your deposit back. The party in breach has 10 business days to get their act together and close or else.

What realestatelawyer is talking about is when the contract at first does NOT include a provision making time of the essence, it can be later made so by supplemental notice, as in sending a certified letter. The only problem with this is that things like intention and the surrounding circumstances are taken into consideration; such a a lender holding up the file in underwriting, etc and as long as it is not a willful breach, good luck with getting your deposit back. What you will most likely get is a delayed closing or be able to walk away less all or part of your deposit.

If your closing date was not made TOTE in the contract itself, you are out of luck.

You can close without a basement re-inspection. Just make sure your lawyer holds a huge escrow.

Also, your contract may state that you have to go to arbitration in order to resolve any disputes regarding the deposit if you fail to close.

And if your TOTE closing date has not come and gone, you are attempting to walk away from a deal that hasn't even been breached yet. Good luck with that.

Answer 2

Let's look at this both legally and realistically.

From a legal point of view you probably have a decent case for getting back your deposit, especially if it takes the seller more than 2 weeks past the original closing date to get the permit for the basement. But, in general, in most NJ contracts the closing date is an estimated closing date. If one of the parties is unable to close by that date then the other party can make "time of the essence of the contract" with a closing date for 2 weeks later. So if your seller can't get the permit within 2 weeks after the original closing date then you have a pretty good case for getting your deposit back.

Now let's look at this realistically. The deposit is currently being held by either a realtor or one of the attorneys as an escrow agent. The person holding the escrow cannot release the deposit (other than at the closing) without the written consent of both the buyer and the seller. If you have your attorney send a letter demanding the return of the deposit, all the seller has to do is say in writing that they don't consent to the return of your deposit. So it stays in escrow and you will have to file a lawsuit against the seller in order to get your money back. Yes, you'll probably get it back but you can figure that it will take at least a year or so to get it.

Your best bet might be to work something out with the seller. Maybe they'll give you a credit for your living expenses. Or maybe you can close but have your attorney hold a substantial amount in escrow until the basement inspection is done. What does your attorney suggest?

Answer 3

You do not say the attorney gave a negative response to the contract review so the assumption would be the the contract has no flaws. In that case, "it is highly unlikely that the closing will happen before the date we agreed on" is not a sufficient basis for refusing to consummate the sale.

On the other hand, if you are actually unable to close on the contracted closing date then you can back out of the purchase. Only at that point can you get your deposit back.

However, f you only became aware of the lack of a permit on the finished basement and the pending inspection after the attorney reviewed the contract, you should have your attorney review the contract again after making him aware of this circumstance.

I notice that you state that you have already backed out of the contract but since you are now asking if you can do so it seems likely the the seller is not receptive to your position and wants to complete the sale. You should be careful about this since you can be taken into court to enforce the contract. Be sure to consult with your attorney on this situation.

Answer 4

It depends on what the contract says. If the closing was contingent on a permit for the basement, then you could probably get out of the contract and all earnest money would be returned. I am not familiar with New Jersey law, but if the owner deliberately failed to disclosed something to you, then you may still be able to get your money back. Since you spoke to an attorney about it, they would be the one who would be familiar with local laws and could best tell you your rights. If you want out of the contract, you may just want to talk to the owner and see if something could be worked out. It sounds like they owner wasn't aware that a permit was necessary, so I am not sure that they were deliberately trying to withhold the information from you. If closing is delayed, and you cannot work out to get your money back, then perhaps the owner would be willing to pay for housing for you until you can close.

Answer 5

became it signed with the aid of the two events? The contract might desire to have long previous under legal expert evaluation until now signing. i think a signed contract is binding until fraud or something makes the contract unenforceable. The legal expert claims he acted in undesirable faith, not which you acted in undesirable faith? i don't comprehend that argument, yet then it incredibly is why we've legal experts. ----- I checked on the previous answer and their appropriate! ideally, you would be wanting to tutor any contract on your legal expert until now you signed it, yet issues are not that easy. you have gotten got here across your dream homestead on Saturday afternoon whilst it is only come on the marketplace at a good purchase value and additionally you will possibly be able to't discover the money for to look ahead to your legal expert again in off the golfing direction. or you will possibly be able to nicely be a broker who desires to settle for in a rush until now the furnish expires. yet with the aid of making the furnish concern to legal expert's approval (you may only write that above your signature) you have used a magic word, and the contract won't grow to be binding until your legal expert okays it. Did your contract have an legal expert replace clause, i could not discover that it became computerized even in Illinois.

Answer 6

Yes, I think you will be able to get your deposit back. Have your attorney write them a letter stating that you want a refund of your deposit if the closing date is not met.

Answer 7

100% yes