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Potential buyer can cancel contract

October 4, 2019
By ERIC FEICHTHALER - Real Estate Law , Cape Coral Daily Breeze

Mr. Feichthaler:

We have held a lot for investment in Cape Coral that we bought in 2005, near the peak. We have paid the property taxes promptly every year, but feel like it is time to move on. So, we hired a Realtor a few months ago, and we received a reasonable offer last week, even though we will have a loss given what we put in.

The contract provided for a $2,000 deposit to be made in 3 days, and a 14-day inspection period. The buyers never made the deposit, and the day before the inspection period, they cancelled the contract. I see the contract provides for attorney's fees to the winner of any dispute, can I sue them to make them buy the lot, or at least compel them to pay the deposit of $2,000?

-Leigh S.

Dear Leigh:

Sorry to hear your buyer is attempting to back out. Based on what you have written above, the buyer breached the contract by not making the deposit. That gives you the right to cancel the contract right away and find another buyer. However, since they were still within their inspection period, they also can cancel for any reason, and exit the contract. Even if they had made the deposit in a timely manner, they would be entitled to its return if they cancelled before the inspection period expired.

One of the requirements you could have made is that the deposit was required to accompany the signed contract, otherwise you won't accept it. I have found this can help to confirm you have a serious buyer.

I also recommend that the amount of the deposit from the buyer is substantial, no less than 5% of the purchase price, or $1,000, whichever is more. Again, this can lead to more serious buyers for your property.

As you noted, most real estate contracts have a prevailing party attorney's fees clause, which can award fees from the losing party to the winning party. Based on these facts, you would run a significant risk of paying their attorney's fees if they had to file a lawsuit to obtain their money back.

I wish you the best in finding a new buyer and, as always, be sure to review any contract offer very carefully to ensure it meets your needs, and will not subject you to potential liability.

Eric P. Feichthaler has lived in Cape Coral for over 30 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Historical Museum, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 18 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator.

Mr. Feichthaler can be reached at eric@capecoralattorney.com, or (239) 542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.

 
 
 

 

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