A buyer in Phoenix breaches a purchase contract by failing to close escrow. The seller wants to keep the earnest money deposit of $5,000. Under Arizona law, what must the seller do to retain the earnest money?
Correct Answer
C) Provide written notice of breach and allow a reasonable cure period
Under Arizona law, the seller must provide written notice of breach and allow a reasonable cure period before retaining earnest money. Option A is incorrect because notice alone is insufficient without allowing cure time. Option B is incorrect as filing a lawsuit is not required to retain earnest money. Option D is incorrect because buyer consent is not required if proper breach procedures are followed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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