If I leased a property to someone with an option to purchase in which the buyers/lessees made a substantial deposit, do I have to refund their deposit?

If I leased a property to someone with an option to purchase in which the buyers/lessees made a substantial deposit, do I have to refund their deposit?

I had recently done some improvements to the property without obtaining building permits, which i indicated in the seller’s disclosure and the buyers signed an acknowledgement of the disclosure. Some time after the contract commenced the local community development department sent a notice of non-compliance and a notice of violation and abatement. The buyers stopped paying the lease so the lease and option are in default according to the documents They are now requesting that I give them back 95% of their deposit upon my finding a new buyer. If they sue me do they have a case?

Asked on July 8, 2012 under Real Estate Law, Washington

Answers:

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