by Phoenix attorney Christopher A. Combs, partner with Combs Law Group, P.C.
The buyer is purchasing the home as an investment property. During the 10-day inspection period the buyer determines that the home will be difficult to rent. In the BINSR the buyer elects to cancel the Contract because the buyer ” cannot find renters for the property.” Is the buyer entitled to cancel the Contract and receive the return of the earnest money?
Probably. Under lines 183-186 of the Contract the buyer is entitled to investigate the ” suitability of the Premises and the surrounding area”¦” In other words, the buyer is entitled to investigate if the home would be suitable as an investment property. Therefore, the buyer is probably entitled to cancel the Contract and receive the return of the earnest money.
Note: A buyer will not be entitled to cancel the Contract for reasons which do not relate to the property, e.g., failing health of the buyer, job transfer of the buyer, or ” buying too much house.”
The above is for informational purposes only and is not intended as definitive legal or tax advice. You should not act upon this information without seeking independent legal counsel. If you desire legal, tax or other professional advice, please contact your attorney, tax advisor or other professional consultant. Reprinted with permission. Copyright 2007, all rights reserved.