Am I entitled to earnest money if we’re out of the due diligence period due to an error on seller’s disclosure?

UPDATED: Sep 30, 2022

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Am I entitled to earnest money if we’re out of the due diligence period due to an error on seller’s disclosure?

In the seller’s disclosure, I stated the home was on sewer and it is actually on septic. The buyer wants to terminate. We are out of due diligence period.

Asked on July 13, 2017 under Real Estate Law, Georgia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

No, you are not entitled to the earnest money. You made a material (important) representation--the difference between sewer and septic is a significant one. That misrepresentation legally constitutes fraud, which at the other party's (the buyer's) option voids the contract, allowing them to get out of it *and* get their money back.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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