Lesson from the seller is holding our deposit hostage.
Lesson: There was a transaction where we entered into escrow and decided to cancel it within our due diligence period. However, the seller refused to release our escrow money, holding it hostage.
Although this only happened once in my career, we learned from it and had our attorney create a clause to add to our agreements.
We made this type of clause standard practice.
Here is what he created; I suggest having your attorney review and modify this to fit your own use.
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STP ADDENDUM TO RESIDENTIAL PURCHASE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS ADDENDUM TO RESIDENTIAL PURCHASE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this “Addendum”) is made as of July _____, 2016, by and between Schon Tepler Partners, LLC - Artem Tepler, manager or his assignee (“Buyer”) and ________________ (“Seller”) to amend and supplement that certain California Residential Purchase Agreement and Joint Escrow Instructions by and between Buyer and Seller of even date herewith (the “Agreement”). In the event of any conflict between the terms of this Addendum and the terms of the Agreement, this Addendum shall control.
1. Defined Terms. Initially-capitalized terms, if not otherwise defined herein, shall have the meaning ascribed thereto in the Agreement.
2. Return of Buyer’s Deposit. In the event that Buyer elects for any reason or no reason, not to waive Buyer’s contingencies pursuant to Section 14 of the Agreement, and either Buyer or Seller delivers a written notice of cancellation to the other party and Escrow Holder, then upon Escrow Holder’s receipt of such notice of cancellation, Escrow Holder shall immediately release to Buyer all funds deposited therewith by Buyer without the need for any further instructions or approval by Seller under any circumstances. For avoidance of doubt, the foregoing is intended to supersede any contrary terms of Section 14.H or any other provisions of the Agreement which require or purport to require Seller’s approval of the release of any such funds to Buyer. By its agreement to serve as escrow agent for this transaction, Escrow Holder accepts the terms of this Section 2.
3. Buyer a Licensed California Real Estate Broker. Seller acknowledges that Buyer is a licensed California real estate broker (License No. 01869333) acting as a principal in this transaction.
4. No MLS Disclosure. Section 24 of the Agreement is hereby deleted in its entirety.
[Signatures on Following Page]
IN WITNESS WHEREOF, Buyer and Seller have executed this Addendum as of the date first written above.
BUYER:
ARTEM TEPLER, Manager
SELLER:
Print Name: