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I was trying to purchase a restaurant. Signed agreement and insisted on escrow, trying to get some protections. Paid $10K to escrow. Now the seller wants to cancel the deal. Both escrow and agent are saying it's seller's fault and I should get my refund. However, when I asked if the seller never formally cancel the deal and never pay their fees, when can I get my money back. The escrow says she wants to deduct the fees from my deposit and refund very little.
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Estate Litigation Attorney serving Redlands, CA
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The escrow agent is a third party neutral agent of both the buyer and the seller. The escrow agent can only act with the written consent of both buyer and the seller. If the buyer and the seller have signed escrow instructions to give the earnest money deposit back to the buyer, then the escrow agent must comply with those instructions.
You would have to read your escrow instructions to determine whether the escrow agent can charge fees for cancellation. In most cases, the escrow agent can charge fees when there is a cancellation.
Even if the escrow agent is rightfully charging fees for cancellation, the seller may be liable to you for breach of contract for not only the damages of breaching, but also for the fees charged for cancellation. Contact an attorney to determine your rights for breach of contract.
Answered on Aug 29th, 2015 at 10:56 AM