A buyer signs a California Residential Purchase Agreement to purchase a home for $1,100,000. During the 17-day inspection contingency period, the buyer's inspector discovers extensive termite damage that was not disclosed by the seller on the Transfer Disclosure Statement, as required by California Civil Code §1102. The contingency period has not yet expired. What is the buyer's best course of action to cancel the contract and recover the earnest money deposit?
Correct Answer
C) Serve the seller with a written cancellation notice before the inspection contingency deadline and request a full refund of the earnest money deposit
Under the standard California RPA, the buyer has an inspection contingency period — typically 17 days — during which the buyer may cancel the contract for any reason related to the physical condition of the property by delivering a written cancellation notice to the seller before the contingency deadline. The seller's failure to disclose the termite damage on the TDS may also constitute a violation of Civil Code §1102, strengthening the buyer's position. By cancelling in writing before the contingency expires, the buyer is entitled to a full refund of the earnest money deposit without penalty.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
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.
More Contracts Questions
Which of the following is required for a valid contract in California?
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After a residential purchase contract has been signed by both parties in Illinois, the buyer and seller verbally agree to change the closing date. What is the legally sound way to document this change?
Specific performance in North Dakota:
- → In a contract for deed (land contract), who retains legal title to the property until the purchase price is fully paid?
- → Which of the following is NOT required for a valid bill of sale?
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- → Sawyer Iverson is reviewing an Illinois issue in Joliet. The person assumes that attorney review automatically replaces every inspection, appraisal, or financing deadline in a standard Illinois residential contract. Which statement best applies?
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- → Avery Jenkins is reviewing an Illinois issue in Normal. The person asks what happens if neither attorney sends a disapproval or proposed change during the standard review period. Which statement best applies?
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- → Johnny wants the seller's patio furniture included in his purchase of a house. Before the offer is signed and delivered to the seller, he asks his agent to attach a page covering the furniture to the offer. That attached page is best described as:
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