A friend of mine is under contract to purchase a (new construction) property. The down payment is 40,000. They were scheduled to close August 31st, but the seller has been unable to get a permit from the city that allows residents to move in. There's no end in sight, and my friend would now like to pursue other options. Part of the reason is that she's paying 4k+/month in rent, which seems very unfair. She has to pay month by month because the seller can't get this permit. Can she get her deposit back? Her real estate agent says no, but of course it's in the best interest of the real estate agent for her to go through with the purchase.
"Close of Escrow shall be within ten (10) days following SELLER'S oral or written notification to BUYER and Escrow Holder that the home will be certified for occupancy by the City/County, currently estimated to be on or about 8/26/2020. BUYER acknowledges that said date is an estimate only and that the actual date for Close of Escrow may vary from the date stated. Should Escrow fail to close in a timely manner through no fault of BUYER, SELLER shall promptly remit to Escrow all funds received by SELLER and shall order all Deposits remitted by BUYER to SELLER or Escrow, to be refunded to BUYER within fifteen (15) days after the estimated closing date specified in this Purchase Agreement, or any mutually agreed upon extended closing date."
I guess the question then is, what is considered "a timely manner". It's now close to 40 days, that certainly seems like it exceeds it?
Katy, TX · Member since 2020 · 86 posts · 45 votes
5y
It's time for your friend to get a real estate attorney. The fact that this is October and the ETA was late August is more than enough time. Is this contract one that the seller made up? I've never seen any promulgated contract that says "timely manner.' Usually everything has a specific date because time is money with things like option periods, etc.
I could be wrong but this seems like it borders on a specific performance issue. Seriously, it's time to consult an attorney. If nothing else, he can tell your friend what their next options are. Also, not all agent's are created equal...
Katy, TX · Member since 2020 · 86 posts · 45 votes
5y
Also, your friend needs to keep in mind that if he or she chooses to stay in this contract it could be a few more months to get the permits. Every state is behind with permitting, housing Court dockets, etc. due to Covid.