BUYER FORFEITED CONTRACT DEPOSIT FOR FAILING TO CLOSE
Believing that the buyer had failed to comply with the terms of a contract of sale, and that they had a right to retain the deposit that had been made for the purchase of their cooperative apartment, the sellers filed suit in the New York County Supreme Court.
Because the judge assigned to the matter was of the view that the buyer’s withdrawal of her board package, and her refusal to close, were inexcusable, the sellers were granted a declaration that they were entitled to keep the $275,000 contract deposit.
On appeal, the Appellate Division, First Department, noted that the record reinforced that the sellers were “ready, willing and able to deliver the stock and the lease,” and that any inability to close was solely due to the buyer’s conduct.
Apparently, despite the buyer’s contention to the contrary, there was nothing in the parties' contract which afforded her an option to cancel, and given her “default,” the sellers were legally entitled to retain the deposit as “liquidated damages,” as contemplated by the terms of the parties’ agreement.
Was that failure to close closure?
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DECISION