How to get back my earnest money deposit?
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How to get back my earnest money deposit?
I put an earnest money deposit down on a house with a settlement company. The inspection revealed issues we were unaware of when contract signed. We notified the settlement company and owner that we were not buying the house well before the stated deadline in the contract. The settlement company refuses to return my money because the seller did not sign a release of the money. This was a
Asked on December 4, 2018 under Real Estate Law, Virginia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
You are legally entitled to the money back based on what you write (your compliance with what is commonly called an "inspection contingency"). But the settlement company is also right that the law does not allow them to release the money unless 1) both parties (buyer and seller) agree to the release, or 2) there is a court order for it. (This is to prevent one party from fraudulently telling the company holding the money to release it when in fact they should not.) So if the seller will not sign off on the release, you have to sue the seller for the money, based on the terms of the contract; they can then be ordered to allow it to be turned over to you.
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