Real Estate Transactions: And the Deposit Goes To…
Real Estate Transactions: And the Deposit Goes To…
May 27, 2009
The deposit is a fundamental part of any real estate transaction. When transactions fall through there is always a question of whether the buyer or the seller is entitled to keep or receive the deposit. When cases like that arise, the real estate contract always governs.
The Third District Court of Appeals recently determined in Bellon v. Acosta, where a contract contains a financing contingency that requires notice within a certain period of time, notice must be given in order for the buyer to receive his deposit back in the event the contract is canceled. Here, the Bellons were entitled to keep the deposit because the Acostas failed to provide written notice to them within the 20 day period prescribed in the contract that they were unable to receive financing.
The Catch… What you need to know is that your attorney must make the terms of the financing contingency (which is usually one of very few contingencies in any residential real estate contract) must be extremely specific. Do not rely on forms which can be far to general. The contract's financing contingency clause must contain "a procedure for notifying the Seller that the contingency is met, that the contingency is not met, or that the contingency is waived.” The real estate investment purchase you make may be the most important investment in your life. When it comes to protecting your money, demand that the financing contingency is clear and easy to understand.
Bellon v. Acosta, 2009 WL 1457111 (Fla.App. 3 Dist.)
May 27, 2009
The deposit is a fundamental part of any real estate transaction. When transactions fall through there is always a question of whether the buyer or the seller is entitled to keep or receive the deposit. When cases like that arise, the real estate contract always governs.
The Third District Court of Appeals recently determined in Bellon v. Acosta, where a contract contains a financing contingency that requires notice within a certain period of time, notice must be given in order for the buyer to receive his deposit back in the event the contract is canceled. Here, the Bellons were entitled to keep the deposit because the Acostas failed to provide written notice to them within the 20 day period prescribed in the contract that they were unable to receive financing.
The Catch… What you need to know is that your attorney must make the terms of the financing contingency (which is usually one of very few contingencies in any residential real estate contract) must be extremely specific. Do not rely on forms which can be far to general. The contract's financing contingency clause must contain "a procedure for notifying the Seller that the contingency is met, that the contingency is not met, or that the contingency is waived.” The real estate investment purchase you make may be the most important investment in your life. When it comes to protecting your money, demand that the financing contingency is clear and easy to understand.
Bellon v. Acosta, 2009 WL 1457111 (Fla.App. 3 Dist.)