What your buyer can do to get her earnest money back after termination
03/24/2016 | Author: Editorial Staff
My buyer gave the seller a timely, written notice that she’s terminating the contract under the termination option in Paragraph 23 of the One to Four Family Residential (Resale) contract. The seller is upset and won’t sign the TAR Release of Earnest Money form. What can my buyer do to get her earnest money?
Under the provisions of Paragraph 18 of the contract, your client could make a written demand to the escrow agent that the earnest money be released. As long as the seller doesn’t object in writing to that disbursement within 15 days after the escrow agent provides a copy of your client’s demand to the seller, the escrow agent may release the funds to your client. Following these steps for disbursement releases the escrow agent from liability related to the disbursement.
If the seller does make a written objection to the disbursement, or his own written demand for the earnest money, the buyer will have written evidence to substantiate the seller’s wrongful refusal to release the earnest money. This might make it easier for the buyer to recover the liquidated damages stated in Paragraph 18:
- The earnest money
- Reasonable attorney fees
- All costs of suit.
Although the amount of earnest money involved in any given transaction may not be substantial, a party who wrongfully fails or refuses to sign a release could end up liable for more than just the amount of the earnest money held by the escrow agent.
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