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  1. #1
    fsnyder24 is offline Junior Member
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    Cancelled Escrow , Seller Refuses to Release escrow Funds

    What is the name of your state (only U.S. law)? California

    We were at day 15 of our 17 day contingency period, after a week waiting for our repair requests to be answered. On this day the seller's agent calls us and says we have got to be kidding about these repairs, me because of the lag, and that response decided to cancel escrow under Paragraph 14 of our escrow contract. I immediately sent the seller's agent a request for escrow funds to be released, she said I was in breach because they were willing to do the repairs, our response was we did't know that, and now we are not comfortable with the repairs and the deal because of the previous response to the repairs, and we wish to just cancel escrow. It is now day 17, we send them a Demand for Cancellation, stating why we are cancelling and giving them an ultimatum to release the funds by June 25, 2012 @ 5:00PM . The only thing they have submitted to us is the releae of contingecy form, which we are not releasing anything due to the fact we are cancelling. The next day they take the listing off of pending and re-list it as active.

    My question is, what legal avenue do I have besides small claims? Do I need to file a suit against them? Open a case with the Realtors Association, etc. i called a local real estate lawyer and he has not called me back yet...
  2. #2
    Zigner is offline Senior Member
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    You jumped the gun.
  3. #3
    justalayman is offline Senior Member
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    how, exactly, did you terminate the contract?


    and if you cancelled properly, you need to keep on reading down at paragraph 17.
    Last edited by justalayman; 06-25-2012 at 06:31 PM.
  4. #4
    fsnyder24 is offline Junior Member
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    Quote Originally Posted by justalayman View Post
    how, exactly, did you terminate the contract?


    and if you cancelled properly, you need to keep on reading down at paragraph 17.
    PRORATIONS OF PROPERTY TAXES AND OTHER ITEMS: Unless otherwise agreed in writing, the following items shall be PAID
    CURRENT and prorated between Buyer and Seller as of Close Of Escrow: real property taxes and assessments, interest, rents,
    HOA regular, special, and emergency dues and assessments imposed prior to Close Of Escrow, premiums on insurance assumed
    by Buyer, payments on bonds and assessments assumed by Buyer, and payments on Mello-Roos and other Special Assessment
    District bonds and assessments that are a current lien. The following items shall be assumed by Buyer WITHOUT CREDIT toward
    the purchase price: prorated payments on Mello-Roos and other Special Assessment District bonds and assessments and HOA
    special assessments that are a current lien but not yet due. Property will be reassessed upon change of ownership. Any
    supplemental tax bills shall be paid as follows: (i) for periods after Close Of Escrow, by Buyer; and (ii) for periods prior to Close Of
    Escrow, by Seller (see C.A.R. Form SPT or SBSA for further information). TAX BILLS ISSUED AFTER CLOSE OF ESCROW
    SHALL BE HANDLED DIRECTLY BETWEEN BUYER AND SELLER. Prorations shall be made based on a 30-day month.

    This paragraph 17, what does this mean to me?

    We cancelled the contract by informing the seller that we were not okay with repair list (because she said we had to be kidding with the repairs, that made us all shiver, we were talking major repairs plumbing, doors, etc and nothing was on discolsure they sent us), and then we sent them the Joint cancellation form.
    Last edited by fsnyder24; 06-25-2012 at 06:37 PM.
  5. #5
    fsnyder24 is offline Junior Member
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    Quote Originally Posted by Zigner View Post
    You jumped the gun.
    I am sorry, but your sentence doesn't offer any advice, or isn't constructive what-so-ever. Please post something useful or do not post anything at all.
  6. #6
    justalayman is offline Senior Member
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    paragraph 17:

    \
    that would be the one right before 18 which is the one you quoted (at least if your is a standard Calirnorni residential purchase agreement and joint escrow instructions provided by the Realtors Assoc.
  7. #7
    justalayman is offline Senior Member
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    Quote Originally Posted by fsnyder24 View Post
    I am sorry, but your sentence doesn't offer any advice, or isn't constructive what-so-ever. Please post something useful or do not post anything at all.
    actually, if I understand what zigner was referring to, it does make sense and is constructive but I believe zigner was in error as to why s/he (sorry zig, I just cannot remember) posted it.

    a little respect goes a long way.
  8. #8
    fsnyder24 is offline Junior Member
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    Quote Originally Posted by justalayman View Post
    paragraph 17:

    \
    that would be the one right before 18 which is the one you quoted (at least if your is a standard Calirnorni residential purchase agreement and joint escrow instructions provided by the Realtors Assoc.
    Sorry but on my forum at this site: http://www.car.org/media/pdf/legal/standard-forms/507939/ the one i quested has 17. in front of it, I assumed this meant it was Paragraph 17. Also the one before has 16. in front of it and states:

    FINAL VERIFICATION OF CONDITION: Buyer shall have the right to make a final inspection of the Property within 5 (or
    ____________) Days Prior to Close Of Escrow, NOT AS A CONTINGENCY OF THE SALE, but solely to confirm: (i) the Property
    is maintained pursuant to paragraph 9; (ii) Repairs have been completed as agreed; and (iii) Seller has complied with Sellerís other
    obligations under this Agreement (C.A.R. Form VP).

    We did't even get to the agreement on repairs. We backed out because the seller was very unclear if the repairs were going to go through or not, this made us very uneasy, we only had 1 day left on contingencies, so to be safe we backed out.
  9. #9
    justalayman is offline Senior Member
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    Ah, SF specific. Give me a minute to peruse it.


    replace my 18 previously with 26.
  10. #10
    fsnyder24 is offline Junior Member
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    Quote Originally Posted by justalayman View Post
    Ah, SF specific. Give me a minute to peruse it.


    replace my 18 previously with 26.
    Ok so my only recourse is small claims. Ok.
    Last edited by fsnyder24; 06-25-2012 at 07:15 PM.
  11. #11
    justalayman is offline Senior Member
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    You never answered my first question: how, specifically, did you cancel the contract?

    in addition to that:

    In your cancellation, what was the specific section cited? and what was the specific claim under that section?
  12. #12
    justalayman is offline Senior Member
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    Quote Originally Posted by fsnyder24 View Post
    Ok so my only recourse is small claims. Ok.
    I'm do not know if you have a valid claim due to you not answering my first question. Beyond that, not knowing the amount of the deposit, I do not know if small claims would be the proper venue or not.
  13. #13
    justalayman is offline Senior Member
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    14. TIME PERIODS; REMOVAL OF CONTINGENCIES; CANCELLATION RIGHTS: The following time periods may only be
    extended, altered, modified, or changed by mutual written agreement. Any removal of contingencies or cancellation under
    this paragraph by either Buyer or Seller must be exercised in good faith and in writing (C.A.R. Form CR or CC).

    A.
    SELLER HAS: 7 (or ______) Days After Acceptance to Deliver to Buyer all Reports, disclosures, and information for which
    Seller is responsible under paragraphs 4, 6A, B, and C, 7A, 9A, 11A and B, and 12. Buyer may give Seller a Notice to Seller
    to Perform (C.A.R. Form NSP) if Seller has not Delivered the items within the time specified.

    B.
    (1) BUYER HAS: 17 (or ______) Days After Acceptance, unless otherwise agreed in writing, to:

    (i) complete all Buyer Investigations; approve all disclosures, reports, and other applicable information, which Buyer
    receives from Seller; and approve all other matters affecting the Property; and
    (ii) Deliver to Seller Signed Copies of Statutory and Lead Disclosures Delivered by Seller in accordance with paragraph 6A.

    (2) Within the time specified in 14B(1), Buyer may request that Seller make repairs or take any other action regarding the
    Property (C.A.R. Form RR). Seller has no obligation to agree to or respond to Buyerís requests.


    (3) Within the time specified in 14B(1) (or as otherwise specified in this Agreement), Buyer shall Deliver to Seller either

    (i) a removal of the applicable contingency (C.A.R. Form CR), or
    (ii) a cancellation (C.A.R. Form CC) of this Agreement based
    upon a remaining contingency or Sellerís failure to Deliver the specified items
    . However, if any report, disclosure, or
    information for which Seller is responsible is not Delivered within the time specified in 14A, then Buyer has 5 (or ______)
    Days After Delivery of any such items, or the time specified in 14B(1), whichever is later, to Deliver to Seller a removal of
    the applicable contingency or cancellation of this Agreement.

    (4) Continuation of Contingency: Even after the end of the time specified in 14B(1) and before Seller cancels this Agreement,
    if at all, pursuant to 14C, Buyer retains the right to either

    (i) in writing remove remaining contingencies, or
    (ii) cancel this Agreement based upon a remaining contingency or Sellerís failure to Deliver the specified items. Once Buyerís written removal of all contingencies is Delivered to Seller, Seller may not cancel this Agreement pursuant to 14C(1).
    for the benefit of anybody that happens to pop in here wanting to know what the contract does say to cancellation by the buyer. Take note of item 2.

    and then section 3(ii)

    Unless there is something else in the rest of the contract that would allow the repairs to cause a contingency to not be able to be removed, I'm not seeing a right of cancellation based on the response of the sellers concerning the repairs.
  14. #14
    fsnyder24 is offline Junior Member
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    Quote Originally Posted by justalayman View Post
    for the benefit of anybody that happens to pop in here wanting to know what the contract does say to cancellation by the buyer. Take note of item 2.

    and then section 3(ii)

    Unless there is something else in the rest of the contract that would allow the repairs to cause a contingency to not be able to be removed, I'm not seeing a right of cancellation based on the response of the sellers concerning the repairs.
    Sorry just got home from work. To answer your first question:

    We have a clause that states we have a right to cancel if the house sin't what we thought it was during and after the inspection. Which it wasn't the pipes rattled, etc. So we asked for the repairs (new plumbing, new applicances (dishwasher didt work), etc) We did't get a response. We waited 7 business days until we got the call from the seller, stating " You have got to be kidding on all these repairs, my buyer won't go for it".

    So with that response, we said that's fine, we wish to cancel the contract because of the inspection/repair contingency. We submitted the Joint Cancellation form that same day. We waited another 2 days, she called us and said the seller was willing to do the repairs, I had less than 24 hours to remove my contingencies, I was uncomfortable with the agent's procrastination on everything we submitted, except the offer. So I told my agent who advised that if I felt any discomfort in the way things were going I had every right to cancel escrow within the 17-days. So thats what I did.

    We cancelled based on that same paragraph you just submitted.

    Also the amount of escrow was $5000.00. I have a conventional Bank of America Loan at 80/20, the price of the house was $254,900
  15. #15
    justalayman is offline Senior Member
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    We have a clause that states we have a right to cancel if the house sin't what we thought it was during and after the inspection.
    ok


    So with that response, we said that's fine, we wish to cancel the contract because of the inspection/repair contingency. We submitted the Joint Cancellation form that same day.
    that's what I was looking for; notice in writing. A requirement to make a claim under paragraph 14.


    We waited another 2 days, she called us and said the seller was willing to do the repairs, I had less than 24 hours to remove my contingencies, I was uncomfortable with the agent's procrastination on everything we submitted, except the offer.
    except the offer? I don't understand what you mean here.


    So I told my agent who advised that if I felt any discomfort in the way things were going I had every right to cancel escrow within the 17-days. So thats what I did.
    I think this is where you might have a problem. If they responded with an agreement to make the repairs in writing, I do not see a justification to cancel on your part. If it was verbal, well, while I didn't see the requirement their response be in writing, I suspect it is there somewhere so a verbal response would not mean anything.

    If their agreement to make the repairs was in writing, you would have to either agree that the repairs are made prior to closing or costs escrowed and of course all that would have to be followed through with but the contingency has been fulfilled in intent.


    the only salvation for you , if their agreement to make the repairs was in writing, that I can imagine would be that your contingency was so loosely written that you could basically cancel for any reason. I hope contracts aren't being written so poorly but realize some are.

    So, if you feel there was a right to cancel and you have gotten no response from the seller or seller's agent, head to court.

    Also the amount of escrow was $5000.00. I have a conventional Bank of America Loan at 80/20, the price of the house was $254,900
    seriously? $5k on a quarter million dollar home? Did you miss a 0?

    so, given the amount of the deposit, I would say that under 26(C)(iii) you can head to small claims court. You should read any escrow agents rules or contract before doing that though to be sure there isn't some action required there.

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