The Sellers Want to Make My Deposit Non-Refundable!

Just yesterday an agent countered one of my client’s offers asking for a non-refundable deposit.  Well, guess what!?  According to Kuish vs Smith 4th District CA Court, the answer is NO!

In the past, how it worked is the seller and seller’s agent might try some scare tactics to make you think that they would try to keep your cash, but escrow kept your deposit safe-guarded and it was virtually impossible to try to keep a buyer’s deposit.

Enter Kuish and Smith.  Bradford Smith entered into written agreement to buy a 14 Million dollar Laguna Beach home, he gave $620,000.00 as a deposit described in the contract as non-refundable. 

Time periods on the escrow slipped and escrow released 400K of the money to the buyers with the remainder still in escrow.  OMG!  Kuish decided to cancel the escrow and the sellers sold the property to the buyers in backup position for 15 Million!

The sellers then had the 620,000.00 deposit and a successfully closed escrow at 15 Mill.  The buyer sued and the first court ruled in the sellers’ favor.  The ruling was overruled by the Court of Appeals who cited Civil Code 3307 which states that the damages for breach of an agreement to purchase property is the difference between the agreed price and value plus consequential damages.

A lot of legal verbage?  In short: the retention of the deposit is a forfeit.  No one is keeping your money!

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