Financing in Los Angeles>Question Details

Jose, Other/Just Looking in Los Angeles County, CA

I never removed my 17 day loan contingency in writing on a standard california contract, can i get my deposit back if I do not qualify for financing?

Asked by Jose, Los Angeles County, CA Tue Feb 22, 2011

I signed my loan documents, never lifted my contingency and on the 24th day found out I was laid off. My lender declined my application when I told him I lost my job. I was never given a notice to perform or asked in any way to remove the contingencies. Do I have a right to my deposit? The seller is refusing to return it and we are going to mediation, just curious about my chances in the mediation to get my money back....

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11
Yes, you can. Contingencies are removed by putting them in writing. If you did not remove your contingency in writing and cannot get a loan, you get your deposit back. What happened to you is getting to be more of a common occurrence. The seller should agree to sign the cancellation instructions so they can go to the next buyer and get their property sold.

Good Luck,
Lori Matson
Keller Williams
3100-994-5894
1 vote Thank Flag Link Tue Feb 22, 2011
Your realtor and his/her broker should be helping you with this.

Realtors don't just find a buyer or locate a home - we do the hard things too!
1 vote Thank Flag Link Tue Feb 22, 2011
Jose,
Probably, you're entitled for your deposit minus cancellation fees and other fees that you might have agreed to pay such as inspetions, etc. Contingencies should be removing in WRITING AND SIGNED as the trasactions goes by for time is of the essence. Either Seller or Buyer, (or their respective agents) failed to remove this contingency or extend in WRITING AND SIGNED. In your case you might have more than 50% to get your deposit.

Best wishes,
cashrealty.net
0 votes Thank Flag Link Tue Feb 22, 2011
You Should be able to get your deposit back minus any escrow cancellation fees usually about 2-3 hundred dollars.
0 votes Thank Flag Link Tue Feb 22, 2011
EVEN WITH language stating that you have 17 days to remove loan & other contingencies it is possible that your contract has the box checked stating that your loan contingency would remain active until the loan is FUNDED. Check your contract for this, it would be located on page 2 Item # H 3.

If that box is checked you should get your deposit back no problem. However the seller would still need to sign the escrow cancellation instructions. If they don't it is my strong opinion you would still win a case in front of a mediator / arbitrator or in a courtroom.

If this isn't the case, work with your agent to try to come to a fair settlement, you shouldn't have to lose your entire deposit. The escrow company CANNOT just hand over your deposit to the seller without your signature too.

Sorry to hear about your job, I hope you find something new soon.

EmilyKnell1@yahoo.com
562-430-3053 cell
Realtor Since 1996
0 votes Thank Flag Link Tue Feb 22, 2011
Hi Jose:
With the caveat that every transaction is different, and your documents should be reviewed with your agent, here is the GENERAL answer to your question:
Until and unless you actively (in writing) remove a contingency, it is still in place. The seller, in your case, could give you a notice to perform, and force you to remove your contingency or close/ cancel the escrow.
Getting your deposit back upon cancellation is never automatic, even when both parties have waived the liquidated damages clause. Escrow cannot cancel the escrow or release the deposit without the agreement of both of the parties. (They are neutral and not a party to your transaction) The seller can agree to cancel, sell the property to another party, and still hold the deposit pending dispute resolution. (In this case escrow transfers the deposit into a holding escrow for the duration of the dispute)
My advice? If you truly cannot qualify for the loan, and want to cancel, sit down with your agent and have them explain the applicable portions of the contract to you. Then have them begin negotiations with the seller to obtain a cancellation for you.
Deborah Bremner
The Bremner Group at Coldwell Banker
REALTOR, 00588885, ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
(D) 818.564.6591
http://www.thebremnergroup.com/news/
0 votes Thank Flag Link Tue Feb 22, 2011
Speak to your brokers manager, however, based on what you stated, yes, you would be entitiled to the return of your deposit.
0 votes Thank Flag Link Tue Feb 22, 2011
Yes. As long as it was agreed in contract that Contingency Removal would be ACTIVE.
This requires a buyer to "actively" sign-off on a contingency for it to be removed.

I trust you were working with a Realtor and utilizing the standard CAR Purchase Agreement that would have Active contingency removal in the language as is standard in residential sales.

Tim Jarnot – Branch Manager
Westside Brokers
Direct: (310) 795-7807
http://www.TimJarnot.com
0 votes Thank Flag Link Tue Feb 22, 2011
Hi Jose:

If there are no other terms and conditions out of the ordinary signed or agreed by you in writing, you should be able to get your deposit back if the other agent did not give you a notice to perform. The agent should have given you the notice to perform unless you signed a contract that says your deposit will be automatically given to the seller if they do not receive any cancellation by the 17th day of contingency removal expiration.
0 votes Thank Flag Link Tue Feb 22, 2011
That is a question for an attorney, as the issue would be looked as a whole contractual conduct of the parties... if you acted like you had waived the contingency and the other party relied on your acts to their detriment they could have a claim...

Either way, the best thing to do is to avoid conflict and look for a reasonable solution... try to avoid taking the "who is right?" position and instead look for how can I get what I want and give them what they want...

Best of luck!

Ron Escobar, MBA
Broker & General Contractor
Web Reference: http://shortsalecentral.org
0 votes Thank Flag Link Tue Feb 22, 2011
Probably, but you need to discuss with an attorney and your agent's broker.



Richard
0 votes Thank Flag Link Tue Feb 22, 2011
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