Can a home builder refuse to return my deposit after not building the house?

Question

Last November 2006 I signed an agreement with a home builder to build a house for me and my family in Laurel, MD

As part of the agreement, I deposited $25,000 for the home + another $10,000 for options. The contract stated that the home was to be ready by May 2007.

- In April, they told me it will be ready June
- In June they told me late July or early August
- Now they are telling me, they don't know when it will be ready ... that maybe the second quarter of next year.

They are still building the first house and they say it is the model and until they finish that one before they can start any other house.

My question is: Can he legally keep my deposit?

P/S: There is no clause that says he can keep my deposit. I have ready over the agreement several times and there is nothing.

I am supposed to be out of my condo by December, and I have a 6 month old son and a wife (who is still in college).

It took me over siz years to save this money.... Any good lawyers out there?

I did everything they asked for, the deposits, the loan approvals etc.

Now they are telling me I will have to forfeit my deposits.

The State is Maryland.
Laurel is the city in PG (Prince George's) County

Answer 1

Is there a date on the contract/agreement as to when it will be built? If there is and he is past it, you can get your money back because he is in breech of contract.

No date and you are pretty well screwed. I'm sure a judge would side with you but you would have to take it to court and that can be costly and take a lot of time.

Answer 2

No they cannot keep your deposit because they have failed to live up to the contract conditions. You need to make sure that the hold ups on construction are not due to things outside their control, such as the developer's fault, or that the city or county or other government agencies have not been the reason. If there are any clauses in your contract regarding items outside the builders control that would automatically extend the contract, and it is just because he is running slow, then you can make a ten day demand for your money for his breach of contract. If he doesn't pay take him to court. You can contact any good litigation lawyer in your area and they can advise, but if they are a reputable builder they should return your money. I hope you had a permanent loan commitment to prove that you could purchase the house, because they could use that against you, otherwise I can't think of anything else. Good Luck.

Answer 3

You are going to need a lawyer for this, and will probably have to sue the builder. Since the contract said it was to be finished by May 2007 and it isn't even started yet, you'd have a pretty firm position.

The problem is, he's very possibly spent the money on the other house he's buildfing, and doesn't have it to refund to you. If that's the case, even if you win in court which you probably will, you could have a hard time collecting.

Good luck.

Answer 4

If you read the contract CLOSELY, builders ALWAYS have written in their contracts that the closing date is a TARGET date and if they cannot meet the target date it DOES NOT give you an "out" on the contract.

It doesn't have to say he can keep your deposit, and if you read back over it, it doesn't say you can cancel it and get it back either, does it?

The term you are looking for is "time is of the essence", and no builder of new construction has that legal term in their contracts.

I'm sorry, but even if you take him to court, you will probably lose. I would stick out the contract and purchase the home, $35,000 is alot of money to flush away.

PS: If they are claiming to be an entire year before the place is ready, you may get a judgement based on the fact that they may be guilty of deliberately misleading you on the closing date in order to get you to sign....THAT is an easier angle to win under.

Answer 5

I don't know what state you are having this problem in but, I do know that the title attorney is a licensed real estate attorney and is working in your best interest. The only way that you might lose the deposit should be if the company goes bankrupt. If there was a REALTOR involved with this purchase get them on the job again. They don't paid either until you are closed so get them on the job or get their manager involved. Builders have to be licensed in most states. Google or yahoo for general contractor license or builders in your state. See what comes up. Remember only a real estate attorney don't pay for a different one to learn the laws! Good Luck

Answer 6

Contract said the house was to be ready by May 2007. Reasonable delays are possible. You need to contact a lawyer and the local state contracting board to file complaints. This may get ugly as the contractor will delay until possible bankruptcy

Answer 7

Sounds like you need to find another builder. Write your builder a certifed letter telling them they no longer have the job and demand your deposit back. Then, you have legal remifications to be compensated for some of your condo rent or mortgage payments. But, do it fast sounds like this builder may be going out of business. Building is slow, so if he is this far behind he doesn't have workers because he can't pay them or he can't pay for materials because he is out of credit and cash.

Answer 8

I'm pretty sure that these things vary from state to state, but I'm pretty sure that you can receive your money back. It's like a deposit for a condo. Have you contacted the state or local government for the laws on such things?

Answer 9

I think it depends on the agreement. If the agreement doesn't lay out any time-lines then I think he can say that the deposit is still valid and he still plans to build the house.

Answer 10

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