Q: Unclaimed Deposit to Bind Still in Escrow after Three Years
We sold our home in June 2021. We accepted an offer and have a signed OFFER TO PURCHASE REAL ESTATE agreement. The prospective buyer put down a binding deposit. Before the offer expired buyer backed out due to a family disagreement. We eventually sold the home. My RE agent and his attorney reached out in order to come to a settlement but it appears there was no response. Three years later the deposit sits in escrow. I recently contacted the RE agent to inquire. His RE attorney and an attorney at a state RE trade org. feel the deposit can’t be issued to me and a settlement can only occur if the person who made this offer initiates a request. What are my options? Can I demand the full deposit? Does the following term of contract entitle me to the full deposit with no other consideration or negotiation?
5. If I do not fulfill my obligations under this Offer, the above mentioned deposit shall forthwith become your property without recourse to either party.
A: It is unclear from your note what the circumstances were at the time the buyer backed out so it is difficult to tell whether the sentence you quoted unequivocally gives you a right to the deposit. Practically, brokers are reluctant to release deposits of this kind without all parties' agreement because the party who does not receive the deposit may claim they wrongfully releasing the deposit. If the deposit is less than $7,500, you could file a small claims case against the buyer and broker who is holding the deposit assuming you have an address for the buyer. You could argue the sentence you cited entitles you to the deposit. Lastly, how much is the deposit $1,000?) and is it worth your time and energy to pursue it three years after you have sold your house?
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