The great real estate attorney, Joel Kaye, has sent me a copy of a recent court decision regarding the question, “What happens if the buyer walks away from the contract, does he lose his 10% deposit?”.
This is somewhat dense, but interesting reading, so if you’d care to plow through 12 pages of Stamford Superior Court Judge Mottolese’s fine dissertation on the astounding case of “Hammond vs. Miller”, feel free, but I can spare you the trouble. Despite the skepticism of two smart-alec readers, my summation of the issue in a previous post was, as the Brits like to say, spot-on!
To re-state: If the buyer breaches the contract, the seller, in order to keep the entire 10% deposit, must fulfill his duty to make reasonable efforts to mitigate his damages. “Mitigate”, in the case of real estate contracts, means the seller must try and find another buyer, and if the replacement buyer agrees to pay the same amount as the previous buyer, then the seller is only entitled to whatever actual costs were incurred in having to go and find that replacement buyer. Got it? Apologies accepted.