Question: A buyer and a seller entered into an agreement to purchase a property. The property was subject to a Home Inspection Contingency. The buyer’s home inspector performed the home inspection per the contract. The buyer received the home inspection report and terminated the contract. No one is disagreeing that the buyer performed correctly as contractually required within the deadlines. But the seller is refusing to sign a release and give the deposit to the buyer. The seller does not dispute that the buyer performed everything correctly, but they feel entitled to it for whatever reason. Can I release the EMD to the buyer if I hold it?
Answer: Yes. Code of Virginia § 54.1-2108.2 provides the Broker holding the deposit with four different options upon the termination of the purchase contract. The first is disbursing it with the written instructions of the principal parties to the transaction. The second is a court orders you to disburse it to a party. The third is you interplead the funds. The fourth is the Broker holding the deposit releases it to whomever is entitled to receive them in accordance with the clear and explicit terms of the contract.
Bonus: § 54.1-2108.2 does reference a 15-day letter (previously 30 day); however, this is optional and as such, not required. It is important to also remember, that if the Broker holding the EMD disburses it per the statute, the statute does provide that they are immune from liability to any of the parties.
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Information accurate as of 02/08/23