Return of earnest money deposit

Return of earnest money deposit

Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes

Okay, folks.  I need your collective wisdom/input again.

Short version: Property under contract as buyer. We do structural inspection, find major issues, seller does not want to negotiate so we cancel contract under "inspection contingency." Seller refuses to sign Cancellation & Release letter so we can get our EMD back.

Other facts...seller does not have a realtor (used a third party vendor to put on MLS); money is being held in escrow by his attorney. Seller lives in FL (property is upstate NY).

My attorney says I am SOL.  He says the only way to get it back is to sue him in small claims court, which he says would have to be done in FL where he lives.  I can't even tie up the property and preclude him from entering into another contract, according to him.  My realtor says if he never signs, the money stays in attorney's escrow account "in perpetuity."

I find it hard to believe with all these attorneys/realtors attached to a transaction like this there isn't an easier mechanism to get my EMD returned.

Does anyone have any other way to get my money back?  I mean, why even have a contract if they are going to blatantly ignore it, yet have no real consequence.

Thanks in advance!

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Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
10y

Send the Attorney a Demand Letter for the return of EMD. Give him 7 days to comply. If he does not, then weigh your options and costs to pursue it legally.

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  • Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    10y

    Send the Attorney a Demand Letter for the return of EMD. Give him 7 days to comply. If he does not, then weigh your options and costs to pursue it legally.

  • Ned CareyPro Member
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    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    10y

    I bet the attorney is wrong. For a couple of hundred bucks you can file a lis pendens against the property. This will tie it up. 

    Furthermore I doubt you have to sue in FL. And in fact it may be a case of suing the attorney. If the facts are clear that you are entitled to the return of the EMD then I am sure the courts can force the attorney to pay up.

  • Rental Property Investor · Catskill, NY · Member since 2018 · 80 posts · 30 votes
    6y

    How did this work out for you?

  • Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes
    6y

    He eventually gave it back, but I'm not sure there was any leverage I had since there was no selling agent.

    I'm glad I didn't have to test that theory.

  • Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    6y

    @Wesley W. I was in a very similar situation last year. I got the EMD after I threatened litigation.

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