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Buying or Selling a Home/Home contract cancelled upon mutual agreement, but builder not returning deposit

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Expert: Todd C. Menard - 4/22/2008


Question
We live in California and we entered into a preliminary home buying contract for a town home in Utah in the year 2006. It is called a preliminary contract because we were only given a tentative price and were told that we would be given a final price before the start of construction (almost 8 months later). We paid a deposit of $8500 for this town home. The contract states that we can cancel the contract and get our deposit back if we do not like the final purchase price. The builder came back to us with a final purchase price, which we did not like. So the builder sent us a letter saying our contract has been cancelled and we should sign and return the cancellation documents so that he can send us our deposit back. We signed the cancellation form and faxed it in October 2007. We called and confirmed that the fax was received. The builder hasn't sent our deposit money back though. We are trying to contact him but we are not sure who to talk to about our deposit. Can you please assist us in this matter?

Answer
Hello Sam - Did you use the services of a REALTOR? If so, contact the REALTOR and the Firms Broker and ask for their assistance. If not remember, the on-site representative works for the builder not you! My recommendation is to first attempt to contact the President of the company. Using the main phone number and document who you have talked to. Then, if you gain no progress, contact a Utah real estate attorney who has experience in collecting deposits. You could have a local attorney write a "Cure Letter Demanding A Refund" then send the letter registered mail and unregistered mail to the attention of the Builder's President. Be exceptionally brief in the description of events but indicate that the deposit must be returned within a time period (10-days) of the mail date of this letter or you will use whatever avenues are available to you by law to collect the money. Indicate the terms of failure to cure... such as interest on your money, collection and attorneys fees. Hopefully this will guarantee you (and the courts) that the person who makes the final decision has received your request and elected to take no action after understanding your terms and conditions. Then if there is no comply and prior to seeking the legal avenue, contact a local Utah television station and see if they have a consumer assistance team like "TV3 on your side" or "Turn To TV10". Tell the reporter/editor your story and ask if they will help you get your money back as there may quite possibly be many more members of the general Utah public that this builder has harmed and has no idea how to proceed. You should also contact the attorney generals office in Utah stating the same thing "Fraud" and Harming the Public. Sometimes you get an answering machine some states have an entourage of departments and personnel. If the news stations doesn't work, and it usually does, no builder desires bad publicity during this market... contact that Utah attorney again and file a law suit against the builder siting the terms of the builders contract, the builders failure after repeated attempts to collect, the confirmation that you sent a registered and unregistered letters and the builders failure to reply and the terms of the cure letter (interest and attorney fees). Hopefully this will help you. Remember as I stated in the beginning you should immediately contact an attorney... not only to write the letter but also to advise you of the idiosyncrasies of the Utah laws and procedure. Remember I am not an attorney so this is not to be considered legal advice. This information is public knowledge and a professional REALTOR should be able to suggest these processes to assist you in a return of your earnest deposit. I wish you good fortune in your endeavor! - Todd

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Todd C. Menard

Expertise

National Association of Realtors Code of Ethics and Professional Standards * Contract Questions: 05/05 Arizona Real Estate Purchase Contract, Exclusive Buyer Broker Contracts, Listing Contracts and associated contract documentation as it relates to boilerplate, covenants, contingencies, procedures and procedures. * ARMLS Arizona Regional Multiple Listing questions * Real Estate Professional Standards and Practices, Ethics, Obligations, Duties * Agency relationships in Arizona, Procurring Cause * Questions typicaly arising during the listing period * Questions typically arising during the escrow period * Questions about working with a real estate agent/REALTOR * Questions Related to New Home Builders

Experience

National Association of REALTORS Board of Director (2011) Arizona Real Estate Salesperson License (1991-1995), Arizona Real Estate Brokers License (1995-Present), Arizona Association of REALTORS Board of Directors (2008-Present), Arizona Association of REALTORS Professional Standards Committee (2008-Present), AAR Certified NAR Code of Ethics and Professional Standards Instructor, Southeast Valley Regional Association of REALTORS President-Elect (2011) Southeast Valley Regional Association of REALTORS Board of Directors (2008, 2009), Southeast Valley Regional Association of REALTORS Grievance Committee Chairperson (1998-2007), Southeast Valley Regional Association of REALTORS Bylaws Committee (2008-Present), Southeast Valley Regional Association of REALTORS Education Committee (2008), Arizona Association of REALTORS Forms Committee - Residential Purchase Contract (2005), Arizona Association of REALTORS Forms Committee - Residential Rental Agreement (2008), Arizona Association of REALTORS Forms Committee - Buyer Broker Agreement (2009), Arizona Association of REALTORS Presidents Advisory Group, Road to Professionalism (2009), Arizona Association of REALTORS GRI Curriculum Review Committee (2009), Arizona Department of Real Estate, Commissioner's Education Advisory Group Sub-Panel B (2010) Arizona Department of Real Estate, Commissioner's Statute and License Review Committee (2007)

Organizations
National Association of REALTORS, Arizona Association of REALTORS, Arizona Real Estate Educators Association (AZREEA), Arizona Regional Multiple Listing System (ARMLS), American Notary Association, Southeast Valley Regional Association of REALTORS (SEVRAR), Southeast Valley Regional Association of REALTORS Women's Council of REALTORS (2010-Present), Phoenix Association of REALTORS (1994-2000, 2005-2009), Scottsdale Association of REALTORS (1994-2000, 2005-2009), Maricopa/Glendale Association of REALTORS (1994-2000, 2005-2009),

Publications
"Real Estate in 2008"- Lifebushido Publishing (Contributory Author), SEVRAR Magazine, Internet Crusade, RealTown ListServe, Blogger.com, Active Rain

Education/Credentials
- AAR Certified Ethics and Professional Standards Instructor, Graduate REALTOR Institute (1993), Certified Negotiation Expert (CNE), Over 100 Hours of annual real estate continuing education, Annual Ethics and Professional Standards Development Workshops as required by the National Association of REALTORS, Approx. 36 hours of NAR Code of Ethics training annually, Numerous IDW, Seminars and Train the Trainer programs, Business Management Degree - 1981

Awards and Honors
2009 REALTOR of the Year Award, Southeast Valley Regional Association of REALTORS (10,000+ Members), Double Platinum Production Award ($45,000,000 Sales Volume)- Keller Williams Realty Int'l (2001), Top 15 Sales Production Keller Williams Realty International (2001), Top 5 Sales Producation Keller Williams Realty Southwest Region (2001), Top Recruiter Award - Keller Williams Realty Int'l, SW Region (2002), Who's Who in U.S. Executive (1983), Who's Who in U.S. Real Estate Professionals (2007)

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