Getting Out Of Preconstruction Condo Contract
Ask the Real Estate Lawyer: Real Estate Law Q&A
REM # LAW 756
By Ilyce R. Glink and Samuel J. Tamkin
Summary: A ThinkGlink reader would like to
get out of a contract to purchase a preconstruction condo. He is wondering what
will happen to the money held in escrow. Ilyce and Sam explain what the possibilities
are for getting the money back.
Q: We are in the early stages of litigation on a preconstruction condo. We
want out of our contract. We have a large amount of money held in escrow.
(article continues below useful links)
I’d like to know what happens to that money while we are in litigation,
and what happens to the money if the closing date approaches and we don’t
close while the litigation is in progress?
A: If you are currently in litigation, the escrow company has been notified
of the litigation or should be notified of the litigation. The escrow company
may even be involved as a party to the litigation.
In most of these cases the escrow company will not release the funds they are
holding until the litigation is settled. In many cases, the escrow company may
even tender the money to the court and let the court decide how the money should
Depending on the issues you face in your litigation, your attorney should be
able to tie up the escrow funds until your issues are resolved. While the specific
issues in your case aren’t clear from your letter, if you lose your case,
you might lose the funds held in escrow and even more, if attorney’s fees
If you win your case, you should be able to terminate your contract and get
the funds back from the escrow.
Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce
R. Glink’s latest book is 50 Simple Steps You Can Take To Sell Your
Home Faster and For More Money In Any Market. If you have questions for
them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022
or contact them through Ilyce’s website www.thinkglink.com