Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Don’t Miss the New Due Date for Jury Fee Deposits in California

Escrow Deposit Disputes – A Bright Line Test

Updated on September 14, 2018

More and more with an active real estate market in Los Angeles we are seeing disputes over the return of earnest money deposits after a failed escrow.  Typically, the seller wants to retain the up to 3% liquidated damage deposit while the buyer wants its deposit back.

Generally, there is a bright line test that can help you determine whether the seller has a right to retain the deposit or whether the buyer has a right to a refund.  The test is whether the buyer has removed all of its contingencies.  If the buyer has removed all of its contingencies then they generally have passed a point of return.  This means with a full contingency removal the buyer will have a difficult time obtaining a refund of their deposit.  Likewise, if the buyer has not removed all of its contingencies then the seller will have a difficult time finding a valid legal basis to retain the buyer’s deposit.

ALSO READ  Can One Owner Sell Jointly Owned Property Without Consent?

Our Los Angeles based real estate attorneys have a great deal of experience helping to resolve disputes over the buyer’s initial deposit in escrow.  We have litigated this issue on behalf of both buyers and sellers.

The California Association of Realtors form has a prescribed way of handling escrow disputes.  This includes, among other things, taking the following steps:

1.  Sending a cancellation

2.  Sending a demand to release the deposit

3.  Demanding mediation

4.  Mediating

5.  Filing an arbitration or court action depending on whether the parties initialed the arbitration provision.

This is not meant to be an exhaustive list as there are several steps that take place even before (1) above.  However, once one of the parties cancels escrow steps 1- 5 generally need to occur.

For help with your escrow dispute, contact us at Schorr Law, APC.  Call us at (310) 954-1877, or you can also email us at info@schorr-law.com or fill out the contact form on the Contact Us page

ALSO READ  Preliminary Title Report: Definition & Requirements in California

By Zachary D. Schorr, esq.

 

Areas We Serve in California:

Ventura County    -    San Bernardino County    -    San Diego County  -   Bakersfield Kern County   -  Orange County   -  San Luis Obispo County   -  Riverside County    -   The Rest of California

Scroll