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How can I claim the money I deposited to buy a house? While in escrow, I decided not to buy the house and eventually the builder

San Diego, CA |

continuation: went out of business. Now the money is at the unclaimed property division of the State Controller's Office. There was not any "signed release of funds document" between myself and the builder.

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Attorney answers 3


In reading your question I note you said you decided not to buy "while in escrow" and EVENTUALLY the builder went out of business. I am assuming that neither of you took any action during the projected escrow period and the escrow company turned the funds over to the state. Typically, when funds are turned over to the state as "unclaimed" the one who turns them over does not know how to reach that person. I am therefore assuming the funds may have been turned over by the escrow company in the name of the builder. There is an excellent tool on the states website to find out:

1) the purported owner of the funds

2) and the procedure and evidence needed to obtain release of those funds

I am attaching a link to those resources for your convenience below.

If you signed a typical real estate purchase agreement (CAR or California Association of Realtors form) there are specific clauses dealing with the rights to the Buyer's deposit in the event the sale is not consumated. There may be a loan, inspection or other contingency that if not met allows the buyer to "walk" and get a refund of the deposit.

If you simply decided not to move forward (outside of a contractual provision excusing your performance) the escrow company may have found the deposit belonged to the now out of business builder (which explains why the funds would have been turned over to the state). If you still have questions, you may decide to contact an experienced attorney many of whom offer free initial consultations and minimal charges for document review). If the money should have been earmarked for you it may be easier than trying to claim a fund designated for another by having the one who turned it over to the state acknowledge your claim.

Again, if you haven't checked the link below, this may be a good first step. I hope this has been of help to you and good luck!

Michelle A. Perfili

Michelle A. Perfili


Thank you for marking my answer as best. I thought there may have been a bit more to the story.


If builder was the seller/owner of the property, then builder defaulted under the purchase contract when it went out of business. Contact the State Controller's office via certified mail, include a copy of the purchase contract, and explain that the buyer's default entitles you to a full refund of your deposit.

Adam Jay Jaffe

Adam Jay Jaffe


If the contractor went out of business and was a corporation, get a statement from the CA Secretary of State showing that the corporation is defunct/defaulted.


I agree with my colleague. I would add that, if possible, add any documentation that you can that shows that the owner/builder went out of business and is not capable of signing a joint instruction that would have released the funds from escrow.

If you have further questions, contact a lawyer for assistance.

Adam Jaffe Law Office of Adam Jay Jaffe 124 Lomas Santa Fe Dr, #204 Solana Beach, CA 92075 (619) 810-7964 This posting is provided for “information purposes” only and should not be relied upon as "legal advice". Nothing transmitted from this posting constitutes the establishment of an attorney-client relationship. Applicability of the legal principles discussed here may differ substantially in individual situations or in different states.

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