Wednesday, May 27, 2009

Third DCA Reverses Decision Awarding Real Estate Deposit to Buyers

In Bellon v. Acosta (3D08-2515), the Third District reversed the trial court and order the deposit for the purchase of real estate should have been awarded to the sellers. The court stated:
Julio and Christine M. Acosta ("Buyers") entered into a contract to purchase a home being sold by Erik and Amy S. Bellon ("Sellers") for $5.65 million. The Buyers posted a $100,000 deposit. The contract contained a financing contingency.
Under the contract, there was a commitment period with a deadline of twenty business days. The twentieth day was January 20, 2008. The Sellers say that on or before January 20, the Buyers were required to give a written notification to the Sellers stating whether or not they had obtained a loan commitment. The Buyers interpret the contract differently, and did not provide any written notification to the Sellers on or before January 20.
The Buyers argue that they should be entitled to the benefit of the full twenty business days, without having to provide any written notification to the Sellers on the twentieth day. The Buyers contend that their notification to the Sellers was timely because it came within a few days after the expiration of the twenty-day period. The Buyers also say that they kept the Sellers informed about the status of the loan application and everyone was aware the application remained pending.

Unfortunately for the Buyers, however, that is not what the contract says. By its terms the contract requires a written notification on or before the twentieth business day. The Buyers failed for that reason. Under the contract terms, "Buyer’s failure to provide Seller with written notice that Buyer is unable to obtain a Commitment within the Commitment Period will result in forfeiture of Buyer’s deposit(s)." The Sellers argue that this provision applies where, as here, (a) the Buyers did not provide the required notification on or before the last day of the Commitment Period, (b) the Buyers failed to obtain financing, and (c) the transaction failed as a result. We agree.

For the stated reasons, we conclude that under the contract language, the Sellers were entitled to retain the deposit. In view of this conclusion, we do not need to reach the Buyers’ alternative argument regarding the contract addendum. ultimately did not obtain financing and the transaction


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