Q: What is the legal time frame for a merchant to return your deposit if a deal falls through?
There was a commercial kitchen for sale. It was technically only the equipment. The space has to be rented separately but you couldn’t take the equipment from the space. The price was $25,000 with a required down payment of $5,000. For the deal to work you have to be approved by the landlord also. I was denied by the landlord due to credit history. The contract said if the landlord denied you all money would be returned. I reached out to seller and she told me that all of her money is vested and she will have to make arrangements soon and let me know when I can have my money back. Is that legal? I thought my $5,000 shouldn’t have been touched until the deal was finalized. How long am I supposed to give her legally?
A: If the contract doesn’t provide a time frame you’ll have to file suit to get your money back. Small claims court has a maximum jurisdiction of $5000. You may use an attorney if you wish.
A: In hindsight, you should have required that the deposit be placed in an escrow account. If the contract entitles you to a return of the deposit, then you are entitled to it right away. As the other attorney stated, you might need to sue to get it. In my opinion, small claims court is often a waste of time because even if you winner the loser can have a trial de novo (do-over) in the circuit court.
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