A Florida real estate licensee prepares a purchase agreement that includes a financing contingency. The buyer fails to apply for financing within the specified timeframe. What is the legal consequence under Florida contract law?
Correct Answer
B) The seller can declare the buyer in default and retain the deposit
Correct: B - When a buyer fails to meet a contractual obligation such as applying for financing within the specified timeframe, they are in default. The seller can declare default and may be entitled to retain the deposit as liquidated damages. Why not A: The contract is not automatically void; the seller must take action. Why not C: There is no automatic extension under Florida law. Why not D: The buyer is not required to pay cash; they are simply in breach of contract.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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- → Under Florida law, all of the following would typically survive the closing of a real estate purchase agreement EXCEPT:
- → Broker Sarah receives a $5,000 earnest money deposit from buyer Johnson for a property purchase. The contract states the deposit should be held in escrow. According to Florida law, what must Sarah do with this deposit?
- → A buyer in Fort Lauderdale breaches a residential purchase contract by refusing to close without legal justification. The contract contains a liquidated damages clause equal to the earnest money deposit of $5,000. What is the seller's most likely remedy?
- → A seller in Florida fails to deliver clear title by the closing date due to an unexpected lien. The buyer wants to proceed but needs more time. What is the most appropriate course of action?
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A buyer submits an offer on a Florida property with a deposit check made payable to the listing broker's trust account. The seller counters with different terms. Under Florida law, what must happen to the deposit?
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