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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.
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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 be distributed.

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 are awarded.

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

 

 

 

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