Whether or not you have the right to now cancel the Contract of Sale is governed by the language found within the Contract. You should sit down with your real estate attorney and review the home inspection clause.
As a general proposition, a Realtor® form contract permits you to conduct inspections and to demand repairs. The seller first has to refuse to make the requested repairs or provide a credit before you have the right to cancel. Also the repairs must be made within the time specified in the contract.
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.
You need to discuss the issue with a real estate attorney. Generally, the terms of your Real Estate Contract will control. The standard realtor prepared form of Contract of Sale contains a Home Inspection contingency. This contingency states the Buyer has the right to conduct a home inspection and notify the Seller as to any structural or mechanical system defects they want addressed. The Seller then decides whether they are willing to address the repairs. It appears from your question that the Seller agreed to address the repair issues, but significant issues still remain.
I would recommend that you obtain written confirmation from your experts concerning their opinions of the Seller's work and a letter from the Town with respect to the need for proper permits for the specific work. These may come in handy. Thereafter, you should talk to a real estate attorney as to your contractual rights.
You need to have a real estate attorney review the contracts. If the contracts require you to approve of the work you can get out of the contract and get your deposit back. You also have an argument that if the work required permits and municipal inspections and these were not done you do not have to accept the work. As it is with contract law the devil is in the details, have some one go over the details with you.
Jim Schroeder is licensed to practice law in New Jersey and the District of Columbia. All information provided here is for educational purposes and does not create an attorney client relationship. Q&A on sites like Avvo are not designed to give specific legal advise but to educate legal consumers so they can be better prepared to work with any attorney they choose to retain. Information on this site by Mr. Schroeder is offered to that end.