DFW - Option Fee Refund

[Lynn Cornell]

Hi, I am an investor from California. I am in a process of doing a 1031 exchange. Sold my condo in LA and need to identify a replacement property by mid-May. I chose to purchase a nice home in the DFW area. The first question we asked the seller is, can the home be rented out per HOA rules? They told us yes. 2 weeks later, we found out through HOA docs that we need to live in the home for 18 months before we can rent it out. They know we are investors. We are on day 10 so we can get our earnest money back, but my question is, should the seller not refund the option fee as well? We went ahead with the transaction, paid a $500 inspection fee that we can't get back and wasted 2 weeks based on the false information that they gave us.

[Nick B.]

Sorry to hear that but option fee is not refundable. It should be spelled out in the TREC contract.