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What is the process for getting deposit on real estate transaction held in escrow returned if seller will not sign release?

Albany, NY |

We signed a real estate purchase contract (standard NY) which included contingency re: home inspection. Inspector found serious structural damage costing over 3K to repair. We decided to use that provision to cancel the contract. Seller will not sign release for cause so that we could have our deposit refunded. I thought escrow was to protect both parties but we feel held hostage to a seller who is actually in breach of contract and just being mean-spirited. HELP

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Attorney answers 4


I assume you are being represented by an attorney on this purchase. If that is the case you should be asking him or her this question. If you are not represented you should hire an attorney immediately. If the seller is refusing to return the down payment and you are not in breach of the contract you will have to bring an action in court. Once you have a court order awarding the escrow to you the escrow agent will be required to return the escrow to you.

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In Texas, it would be to go to small claims court. I am sure NY has something similar.

Peter J Weinman

Peter J Weinman


Town & Village Courts in "upstate NY" only hear small-claims cases up to $3,000. Here's a link for more info.


I hope that you are repented by a lawyer. If so, then ask him or her. Maybe you should ask an adjustment of price and proceed with the sale. If that's not an option, then does your contract require you to notify his lawyer in writing canceling the contract? You also may able to sue. Consult your lawyer and if you don't have one, then hire one right away.


The answer depends on what the contract provided. Typically, a home inspection clause does not give you the right to cancel simply because of the results of the home inspection report. Rather, you first must request that the seller make the repairs. It is only after the seller refuses to make repairs that you would have the right to cancel.

If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.

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