Can I opt out of my purchase contract to buy a condo if we are already in escow?

Question

The seller owes $14,000 in back HOA fees and I do not trust them to pay up before we close. I don't want to end up stuck with this lien. Can I withdraw my purchase agreement? And if so what is the penalty for doing this? State of California, escrow account, scheduled to close December 4.

Answer 1

I recommend that you first talk with the title officer at the title company that has the escrow on this transaction.

In most cases the title company will not issue title insurance on the property and will not close the escrow if the HOA fees are not paid prior to close of escrow or the title company will pay the delinquent HOA fees out of escrow.

This forces the seller to pay the delinquent homeowner's association fees prior to close of escrow, or the title company will pay the delinquent homeowner's association fees for the seller out of the proceeds of the sale.


I recommend that you talk with the title officer first. The title officer will probably tell you that the title company will make certain that those delinquent fees are paid before the title company will close the escrow.

If you do not receive a satisfactory answer from the title officer, I recommend that you contact an attorney who specializes in real estate law, and follow the recommendations of your attorney.

Answer 2

State of California. I'm a Broker in California. In the normal purchase agreement, you have 17 days to approve or disapprove of all disclosures so if you're within that 17 days after date of acceptance, then you can cancel the purchase and keep your deposit. If you're past your 17 days, but have not removed your contingencies, then you're still OK. Talk to your realtor. Escrow shouldn't close until the seller pays the HOA due amount.

Answer 3

All amounts owed by the seller should be detailed in the closing docs and paid at closing. The title company will mail checks to county taxes, water company, hoa's etc. Trust should have nothing to do with it. Call the county and check on the taxes, those may be past due also.
Have your agent verify with the title company how much they owe on mortgages. After all payouts will they have any equity. Sometimes when the seller is upside down they have to bring $X to the closing that is where there can be a problem.

Answer 4

If the purchase agreement states that the seller must pay that $14,000 he owes the HOA as a contingency of the sale, then you can back out if he doesn't pay it.

If you did not get that stated in the contract, your real estate agent made a mistake in my opinion. You need to speak to your agent.

Answer 5

You should speak to your agent, but heres this that may answer some questions:

http://www.san-fernando-valley-real-estate.com/escrow.htm