Under what circumstances is a down payment for the purchase of real estateforfeited?
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Under what circumstances is a down payment for the purchase of real estateforfeited?
My husband and I are in contract to purchase a house. So far our closing date has been pushed off by the bank 3 times and now the sellers are declaring the contract in default and threatening to keep our down payment. Our mortgage broker has sent an e-mail to the sellers urging them to hang in there as it has been due to no fault of our own and the bank had given us misinformation (the rep was terminated). Do we have a leg to stand on? We still want this house and the bank is saying that we are qualified and will get clearance, just not by the date needed. Our 45 days was up 2 weeks ago.
Asked on May 18, 2011 under Real Estate Law, New York
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
You write that your 45 days was up 2 weeks ago. If the problem is that you exceeded the time to close and/or line up financing in your contract, then it may be that you have no recourse and the seller can take your downpayment or deposit. The issue is, exactly what does the contract say? Contracts are creatures of their words or terms; that is, as long as the contractual provisions are not illegal (e.g. a contract to commit a crime) or were not caused by fraud (e.g. one party was deliberately tricked into the contract), the courts will generally enforce the contract as written. This could include losing a deposit and the right to buy a home if a deadline is not met for any reason, if that's how the contract is written. You should have a real estate attorney review the contract and situation for you right away, to see what your rights are.
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