How long does an attorney have to give back a down payment on a real estate contract after the contract has been canceled?
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How long does an attorney have to give back a down payment on a real estate contract after the contract has been canceled?
I recently entered into a contract to purchase a co op but was declined by chase for a mortgage. I had provided the seller’s attorney a 10% down payment check. I informed the seller’s attorney of my intent to cancel the contract due to not being provided a mortgage prior to the downpayment check being cashed. He asked it anyway and it’s been a week. I have not heard from him or received my cash back. I sent him an email asking him if he plans on sending the money back and he told me i have to go through a lawyer for questions. I do have a lawyer that I retained for the co op purchase but he is completely unresponsive. what are my rights here and how long does the seller’s attorney have to keep my funds especially since they didn’t have a right to cash the check after I already informed them of my intent to cancel? And can they legally keep my money?
Asked on December 21, 2011 under Real Estate Law, New York
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Whether or not you are entitled to the return of your deposit depends upon whether or not you waived all contingencies concerning the purchase of the unit or not. You need to carefully read the written purchase contract regarding the purchase of the unit and your entitlement to get its return due to the failure of getting loan approval.
If there is a formal escrow established for the transaction, I would e mail the escrow officer seeking its return advising that the escrow has been cancelled by you. The time period for the return of any allowable deposit back to the buyer is typically spelled out in the purchase agreement.
I would call and write the person who holds the deposit (escrow or the attorney) one more letter seeking its return by a set date. If not returned by then and if the attorney is handling the escrow has the money in his or her trust account has not responded to your inquiry, you might consider making a state bar complaint as to him or her.
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