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Mr. Feichthaler:
I signed a contract to sell my house recently, and the closing is expected to be on Tuesday. The inspection period for the buyer ended last week, and they brought up no issues.
Yesterday, they wrote to me to say they don't want to proceed with the purchase because of a dry spot on the lawn. They said that conditions changed since they signed the contract last month, and that they do not want to go forward. Can they cancel the contract?
-- Charles B.
Dear Charles:
We often see situations where buyers have a legitimate concern about problems arising after the contract is signed, but before closing. Typical-ly, this would involve a situation like a roof that started to leak, or other damage caused for any reason during the pendency of the contract. When this occurs, the buyer typically asks for the item to be repaired or a credit before proceeding.
However, the change in condition needs to be material for such a demand to be warranted. Everyone knows, or should know, that our dry season is at its peak in April and May, and that lawns may not receive irrigation evenly, leading to dry spots. A rational person would not consider a dry spot on a lawn as a material breach. Based on the facts presented, the buyer should not have the right to exit the contract after the due diligence period ends based on a dry spot on the lawn. It is likely there are other reasons they no longer want to purchase the property, and are looking for a reason to cancel. Dry lawn, at best, is a reach.
If they refuse to go forward, you likely have rights under your purchase and sale agreement, to retain their escrow deposit or other remedies. My typical recommendation is to let the buyers know you intend to hold them to the letter and spirit of the contract, and that you won't authorize the release of the deposit. This position may lead them to proceed, avoiding unnecessary cost and stress of a battle for deposits. I wish you a successful closing!
Eric P. Feichthaler has lived in Cape Coral for over 35 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 Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 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. He 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.