Everyone knows that the deposit for the purchase of real estate will be returned to the buyer if the transaction falls apart for reasons specified in the contract.
But the fine print in the boiler-plate language in a typical contract of sale for real estate in New York is well worth reading.
If the closing does not occur and either buyer or seller asks that the deposit be given back to the buyer, it is up to the lawyer who put the funds in an escrow account to release the money – but not right away.
In fact, that lawyer (called “Escrowee” in the contract) must wait 10 days for an objection by one of the parties unless approval is communicated sooner. Now read this:
If Escrowee does receive such a Notice of objection within said period, or if for any reason Escrowee in good faith elects not to make such a payment, Escrowee may continue to hold the Contract Deposit until otherwise directed by a joint Notice by the Parties or a final, non-appealable judgment, order or decree of a court of competent jurisdiction.
In other words, a lawyer and either side of a transaction can hold up return of a deposit. If seller or, unlikely, buyer remains obstinate, a judge can be asked to intervene.
So, please do be aware that return of a deposit is not automatic, not necessarily quick and not always inexpensive. That’s information every buyer should have.
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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022
M: 347-886-0248
F: 347-438-3201
Malcolm@ServiceYouCanTrust.com
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