Expert: liznarr - 9/11/2008

Question
I signed a contract to buy a condo in February 2006 and gave the builder $25,000 to put in an escrow acct.  The completion date of August 2007 was not met. The builder exercised his right to a 6 month extension.  We have now gone 7 months beyond that; it is September 2008 and the condo is still not done.  I have requested my deposit back; they refused.  Help!

Answer
Hi Betty,

Please excuse the delay in responding.  There has been both a death and major surgery in my family in the last two weeks, and I am behind on everything.

Wow, sorry to hear of your problem with your builder.  Unfortunately, in this time of depressed sales, more and more builders are having problems.  I sincerely hope that your builder is still solvent and has no plans to file bankruptcy, in which event you could lose your entire $25,000 deposit.

Your Contract of Sale is the document that prevails when problems arise.  If you did nothing to breach the contract on your “side,” and the builder has exhausted his extension(s); I would certainly think you are entitled to receive your earnest money back immediately.  See if your Contract addresses this.

It sounds like you need to contact a good attorney ASAP, but before doing so you might call the builder and make one more request for the return of your earnest money.  Better yet, pay him a personal visit.  Let him know that you are VERY serious, and that you intend to file formal complaints against him and seek legal advice if your $25,000 earnest money is not refunded immediately.

If he still refuses, see a good attorney immediately.  I would also contact the licensing authority for builders in your state and make a formal complaint against him and also inquire as to whether or not he has any other outstanding complaints.

Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth