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Buyer has recinded their offer based on Contingency. We have asked for all insp reports but refuse give report from engineer. Can we hold deposit?

Asked by Guest, 19382 Mon Feb 28, 2011

The contract states that we have the right to copies of all inspection reports from our property. They have provided all of them except from a structural engineer. My question is how can I excersize my right to this inspection report. Can I legaly hold the deposit monies in Escrow until they furnish the report.

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Just so you are aware, if there are deficiencies that are discovered as part of the inspection process and you become aware of those deficiencies, you will have to disclose what you know to any future buyers - whether or not you agree with the inspection assessments. Failure to do so could result in a potential lawsuit should defects be discovered after the fact and you knowingly failed to disclose them to a buyer.
1 vote Thank Flag Link Mon Feb 28, 2011
you obviously should talk to your agent and attorney as needed. I have not seen your contract. The standard contract we use does require that IF the inspections were the reason the buyer terminated. i don't know in your situation.
0 votes Thank Flag Link Mon Feb 28, 2011
Sounds good. If I can help I'd be glad and honored to assist.
0 votes Thank Flag Link Mon Feb 28, 2011
We are Jason and his opinion is just that. That we should point to the provision entitling us to the report and leave it at that. I'm good with that as long as it can't hurt me.

Of course we are seeking legal advise. Not that I don't trust strangers on teh internet or anything.
0 votes Thank Flag Link Mon Feb 28, 2011
Not a huge deal ... we have a great home and I don't think we are going to have any problem finding new buyers. We wanted them out as soon as it became appearant that they were trying to "position" for a price reduction. We would have gladly reduced the price or made other consessions/repairs if they had dealt with us in a straightforward and honest manner ... just ask ... don't play cute little games.

Thanks for the advice and perspectives. Not sure what we are going to do just yet. We will see what my wife learns from the attorney.
0 votes Thank Flag Link Mon Feb 28, 2011
are you working with a realtor?
Just going by your question, you are intittled to see a copy of the inspection if the agreement of sale states that. Is the real estate company holding the escrow money? I would simply tell the other party to refer to the contract where its states that they have to provide propper paperwork.
0 votes Thank Flag Link Mon Feb 28, 2011
Since you are asking a legal question, it's in your best interest to consult with an attorney and have all related paperwork reviewed, before making any decision regarding escrow money--accurate advice prevents future problems.
0 votes Thank Flag Link Mon Feb 28, 2011
If I were the buyer I would take you to small claims court for the return of my deposit money. I think the buyer would win. This legal action, I am not an attorney, could possibly put a cloud on the title until resolved. A lis pendens could be filed by an attorney usually, and stop you from selling the property to anyone.

I know this isn't fair, isn't right etc. I am sorry that it has happened to you, truly. It's my industry and I wish it were better.
0 votes Thank Flag Link Mon Feb 28, 2011
Maybe the report is not significant enough for them to get out of the deal and they don't want you to see that and try to hold them in the deal. Who knows? They may do the same thing to others but that shouldn't concern you. We can't fix the world. Don't forget they did spend good money and now lost it on the inspections. How many times are they going to do that? If the motivation is gone, it's over. People play all kinds of games, buyers, sellers and agents sometimes just to look good. The egos get in the way. As a real estate professional our job is to advocate on behalf of our clients and always keep our clients' best interest in mind, no one else's not even our own. That is of course if we understand and properly perform our job.
0 votes Thank Flag Link Mon Feb 28, 2011
If we were to go ahead and hold the deposit monies until such time as the written report or the name and contact information of the engineer are provided, under what circumstances could they keep my home from clearing title?
0 votes Thank Flag Link Mon Feb 28, 2011
Sure we understand fully that we need to disclose anything we have in any report. No Problem. We suspect however that something is not quite as it appears. They willing and quickly handed over all of the other reports but are stonewalling on this one. The question burning in my mind is why? Does it not exist? Then why have someone enter my home representing himself as a structural engineer? They made verbal claims as to what the engineer wanted to see done? (not in writing of course)

Is it worth it to me to find out? If we let it go what's to stop them from doing it to the next person.

I'm not sure why this process has to be so contentious. We were working in good faith with these buyers, gave them long contingency periods and made other concessions thinking that a Real Estate transaction could go down without anyone trying to "out-maneuver" the other.
0 votes Thank Flag Link Mon Feb 28, 2011
I don't agree that you have to disclosure information that might be false just because it was in someone's home inspection report. Perhaps the inspector was wrong. I do think that you should investigate every single aspect of your home that is questionable as a result of the report so that you can be in a position to disclose the truth about your property. I don't know why agents believe that you should be disclosing false information. Lunacy.
0 votes Thank Flag Link Mon Feb 28, 2011
If the structural report was one of the inspections listed and they are witholding the report when the contract says to provide it to you, you may have a case to not agree to release the deposit. If the broker is holding it, as is usually the case, the broker can't release the deposit to either party without both parties agreeing to the release. If a year goes by an neither party has taken legal action, the deposit goes back to the buyer. If it's a small deposit, it may not be worth fighting over. You should check woth an attorney to get good legal advise on this.
0 votes Thank Flag Link Mon Feb 28, 2011
Hello Bill,

I'm sorry to hear that your deal is falling apart. Please let me know if I can help.

All inspections conducted by the Buyer are the property of the Buyer. You can request a copy, but once given one, you must disclose all findings to prospective future buyers. If you fear structural damage, seek advice from an engineer working for you, not your buyer.

The PA Standard Agreement of Sale details the specifics of the Inspection Contingency in paragraphs 10 & 11, particularly 11 (A) 5. But the short answer is no. As long as the Buyer terminates within the time period specified in the inspection contingency, the full deposit should be refunded with no questions asked regardless of the documentation buyer does or doesn't provide.

Hannah Angert, Realtor®
PA License RS-295442

Cell 215.869.9571
Office 215.271.3000
Fax 215.271.0988

William Festa Realty
3001 S. Sydenham St.
Philadelphia, PA 19145
0 votes Thank Flag Link Mon Feb 28, 2011
Deposit is required to remain in the broker's escrow account until all parties agree as to the distribution of the funds or until a court orders the broker to disburse the funds or until the broker asks the court to hold the money. But what is to be accomplished. I know that you would like the report. I know that the Agreement of Sale indicates that you are entitled to all reports but what would you like to do? Maybe sell your home? You can hold up the buyers' deposit but the buyer can hold up your house from clearing title for the next buyer. I think you would be better served to let it go, move on and possibly investigate any physical characteristics or areas of concern about your property before the next buyer comes along. In other parts of the country sellers do their own Home Inspection before putting their property on the market. This enables them to do what I just said and educates them and their agent to recognize a bogus Home Inspection if one should come along.
Thank you for reading.
Tom Woods, Associate Broker
CENTURY 21 Alliance
0 votes Thank Flag Link Mon Feb 28, 2011
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