David is purchasing a property in Pueblo, Colorado, and the CREC contract includes a title contingency. The title company discovers an unresolved mechanic's lien on the property. David timely objects in writing. The seller is unable to clear the lien before the title objection deadline. What is David's most appropriate course of action under the Colorado contract?
Correct Answer
B) David may terminate the contract and receive a refund of his earnest money
Under the CREC-approved Contract to Buy and Sell Real Estate, the title review contingency allows the buyer to object to title defects within the specified deadline. If the buyer timely objects and the seller is unable to cure the title defect, the buyer has the right to terminate the contract and receive a full refund of earnest money. An unresolved mechanic's lien is a title defect that the seller must cure or the buyer may use as a basis for termination.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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