Under the C.A.R. RPA and California law, a buyer who cancels escrow within an active contingency period is entitled to all of the following EXCEPT:
Correct Answer
B) Reimbursement from the seller for inspection fees the buyer paid during the contingency period
When a buyer cancels within an active contingency period, the buyer is NOT entitled to reimbursement from the seller for inspection costs. Under the C.A.R. RPA and California law, inspection fees paid by the buyer during due diligence are the buyer's sole responsibility and are not recoverable from the seller, regardless of whether the transaction closes. These are considered costs of the buyer's investigation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
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