Q: What happens if a contract is ratified, then the purchaser properly terminates the contract under a contingency before the EMD has been deposited?
A: It depends on who is supposed to receive the EMD under the contract. If the purchaser is entitled to receive the EMD (such as in our home inspection contingency), then nothing needs to be done. The parties can execute a release and the purchaser can keep the money. If the money is supposed to go to the seller, however, the release will need to specify how the money will be turned over to the seller and when. If the contract is unclear as to who should receive the EMD, the release should specify that as well.
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