Expert: Jim Root - 1/14/2008

Question
I placed earnest money down on a new construction condo in Chicago in January of 2007.  Later in 2007, for several reasons that arose since the deposit, I relocated to California with my fiancee.  Since we were planning on using the condo as our new home in Chicago, and due to the current very scary real estate market, we would now like to get out of our contract and get our earnest money back to use on our new life out here.

Recently I reviewed my contract and found an interesting clause within the sales contingency section of the contract.  The very last sentence of this section states: "This agreement is also contingent upon Seller having entered into at least 185 valid sales contracts on or before March 31st, 2008."

The sales total of this property have no chance of reaching the 185 total by the date specified due to poor sales in the current market.  I contacted my lawyer regarding this and he suggested that this clause was really for the seller to back out and not me.  I would like a second opinion as to the validity of this statement.

It would seem to me that a sales contingency not being met, unless explicitly stated that it can only be invoked by a specific party, should be reason for either party to terminate the contract.

Can anyone either confirm or refute my lawyers for reaction?

Thanks,
Tim

Answer
TIM--

The answer to your question would constitute a legal opinion, and as I'm not an Attorney and am no longer a licensed Real Estate Agent nor Residential Appraiser, I cannot give you a legal opinion or legal advice, even though it's regarding a matter relating to a real estate Purchase & Sale Agreement! So, be advised that what follows is not a legal opinion nor is it advice nor guidance on a real estate contractual matter!It's simply a statement of "what I would do."

If I were "in your shoes," I think I'd disagree with my Attorney's interpretation of the "Weasel Clause." Like you, I believe I'd feel that it could be interpreted to allow either the Buyer or Builder/Seller to "back out" if the expressed condition's are not met! Of course, we--you & I--might be wrong, as we're not Lawyers! But I'd certainly see if I couldn't find an Attorney that agreed that the Buyer's ability to withdraw from the transaction is as valid as is the Builder/Seller's--and I'd let a Court decide if the Builder/Seller wouldn't agree to return my earnest money deposit after receiving my "new" Lawyer's letter requesting cancellation of the contract & refund of deposit!

Now, I'm not suggesting that you do as I've outlined. Such an action would require further Attorney fees, put your Deposit at risk, and might not be the best thing for you to do! And I am neither confirming or refuting your Attorney's interpretation of your Contract.This is simply my what my personal approach to such a scenario would be & the way I'd handle it! I'd be willing to pay another Attney & take a risk with my Deposit.Perhapos you would not!

Good luck to you and your Fiance in California. From a former Easterner, I say "Welcome " to the West Coast!
--JIM