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If a CA buyer claims to have been rejected for financing, but declines to provide proof to the seller, does buyer forfeit EMD?

Rancho Cucamonga, CA |

Buyer wants to cancel a CA RPA and claims that the lender rejected financing. Seller's agent requested through buyer's agent for a copy of letter from lender, which seller refuses to provide. If loan contingency period has expired, is buyer in breach for not removing contingency and/or providing proof of rejection and at risk of forfeiting EMD, or can buyer 'allege' anything and walk away and retain EMD?

Does RPA 3.H.2. requiring buyer to act diligently and in good faith have any bearing on this?

If seller later discovers that buyers in fact were able to obtain similar financing to purchase a different property (say, within 90 days or original RPA), might seller have additional grounds for recourse?

Attorney Answers 2


  1. There's no such thing as a "standard" contract, and no no one-size-fits-all answer to a general contract question. When someone asks essentially "what does my contract say," and no one's had the opportunity to review the document at issue and discuss the facts with you, they have to realize that no one can properly advise you without such a review/discussion.

    Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to any follow-up comments. If you want to hire me, please contact me. Otherwise, please don't expect a further response. We need an actual written agreement to form an attorney-client relationship. I'm only licensed in CA and you shouldn't rely on this answer, since each state has different laws, each situation is fact specific, and it's impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue.


  2. I agree with the first attorney. However, if a lawsuit is filed the lack of proof of rejection of the loan application would make it hard for the buyer to avoid a finding of breach. Without litigation the seller and the buyer may disagree but the escrow holder is not going to make a decision as to who is correct. The finds may be held by the escrow holder until the seller and the buyer agree or until there is a final judgment.

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