Can seller charge no refundable deposit ?

Question

If buyer backs out in a legal contract—-  Either with or without contingencies.

My lawyer said the court will not support such non refundable amount no matter what.

H

Percy N. · Answer

What size property is this?

For larger properties (100+ units), it is common these days to have some amount "hard" (non-refundable) and no such thing as a "sellers disclosure". The buyer has to do their Due Diligence.

Having said that, well written Commercial RE contracts have a clause about non-performance on the seller's part.

Account Closed · Answer

I've always heard that deposits are refundable unless there is damage. (Residential Clients)

Greg H. · Answer

@Percy N.

You are correct as I failed to see this thread is in the commercial category.  Different ballgame and yes non-refundable earnest money is common

Greg H. · Answer

In Texas, there are required disclosures such as a seller's disclosure.  If those are provided upfront, you could have non-refundable earnest money

However, if a seller is unable to provide marketable title, should a seller then keep the EM? Of course not.  So while you can, there is not really an absolute non-refundable

Erik W. · Answer

I would ask the Seller "Why?" they want a non-refundable deposit and work on calming his/her fears that you will not perform as agreed assuming all the conditions of the contract are met.  Btw, I agree that deposits are--by definition--refundable unless the aggrieved party can demonstrate financial damages.  FEES are non-refundable, by definition.

JD Martin · Answer

If your lawyer is a real estate lawyer, listen to your lawyer. Generally a deposit is always refundable, otherwise the term makes no sense whatsoever (it would then be a fee), at least when you are talking in the context of real estate.

Aaron K. · Answer

It depends on the state in some places like Texas it is called the option fee and is super common.

Can seller charge no refundable deposit ?

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