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Ask Michael Lykken, Esq Your Own Question
Michael Lykken, Esq
Michael Lykken, Esq,
Category: Real Estate Law
Satisfied Customers: 103
Experience:  Partner at Soares & Lykken, Attorneys at Law
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I am a realtor in california. My client is a Military

Customer Question

I am a realtor in california. My client is a Military Veteran with Disability. He put down $2,000.00 Earnest Money Deposit. The deal did not close, the seller extracted $2,000.00 for extending the escrow for 14 days and also extracted another $1,400.00 to extend the Escrow for additional 14 days. (The condominium house purchase price was to be 355 K, it is vacant it used to be rented for $2,000.00 a month ).
The lender at the last minute declined the loan and now the seller wants to keep the Earnest money.
I have heard that the disabled Veteran earnest money deposit is to be returned regardless of the reasons for not closing the transaction.
Question: Is my client entitled to get all or some of the monies that the seller either got directly ($3,400.00) or the $2,000.00 that is held by Escrow for Earnest money?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Michael Lykken, Esq replied 1 year ago.

Hello, my name is ***** ***** I am a licensed California attorney. Thank you for using this service, but please be advised that I can only provide you with general advice in this forum. This answer depends on what the purchase agreement says. First, was the liquidated damages clause signed? Second, has the buyer removed contingencies for financing? I need to quickly look at the earnest money rules for disabled veterans as I'm not familiar with a rule to the effect you are stating.

Expert:  Michael Lykken, Esq replied 1 year ago.

Hello again, I checked some resources and could not find anything to the effect that a disabled veteran is entitled to a full refund of their earnest money deposit for any reason. I am also surprised that your client gave money directly to the seller. I am not sure what the additional addenda say in which your client agreed to pay the seller additional funds directly in order to extend the escrow, but absent some contrary language, if your client had the right to cancel the agreement then he should have get all of his earnest money refunded back to him.

Customer: replied 1 year ago.
I have been told that ADA protects the Veteran with Disability. That is the law refrence that I don't seem to find, since I don't have access to the law library.
Expert:  Michael Lykken, Esq replied 1 year ago.

The ADA can be found online, and HUD provides relevant regulations as well. However, I can't find anything that supports a return of the full earnest money deposit for a disabled veteran regardless of the reason for the cancellation of purchase agreement.

Expert:  Michael Lykken, Esq replied 1 year ago.

I hope you found my assistance helpful. Please let me know if there is anything else I can do for you. I only receive credit for this answer if I am rated, so if you could do that I would appreciate it. Thank you!