A little while ago, we began a discussion about early planning agreements.  In the kind of response we love to see here at the LRC, a reader, Yakov A., provided a great deal of further information on the topic (see his comments on arguments that might result in the return of the deposit).
In a nutshell, Yakov informed us that, for various reasons, these contracts (also sometimes called “Reservation Agreements”) may not be “enforceable” by the developer, but they may be enforceable by the purchaser. So what does that mean?  Well, it means that, should a developer go to court to say “I demand what I think I am entitled to under this contract”, the developer might not get it. On the other hand, and for various other possible reasons, the person buying the house might have better luck.  And, once again, the answer provided by the law will be: it depends. One of the things upon which it depends is the arguments made by the people presenting the case.
What should we take away from this? Well:

• if you are already in this situation, don’t let the arguably as-of-yet-not-totally-clear law on this topic deter you from trying to get your deposit back – it might work;

• if you do try to get your deposit back, consider hiring a lawyer. As you can see from Yakov’s insightful comments, lawyers who specialize in a particular field are truly a wealth of information and can really be helpful in reaching your goals; and

• if you are buying a condo and/or entering into one of these agreements,  do your homework, protect yourself, and make sure you understand what you are doing.After all, even if you can go to court to get all or some of your money back, or reach a settlement before going to court, these process are long, emotionally draining and do cost money in and of themselves (not to mention arguably the last thing you need as you search for another property)!

Thanks again Yakov!