Should I return the EMD

[Account Closed]

I have a property in Indy that went under contract on Oct 30, 2020. Standard contract with 10 days for inspections and closing date of Dec 5. The buyer then apparently came down with Covid and nothing happened until Nov 11 at which time they put down 1K EMD. However after that nothing happened until Dec 23 when they Buyer backed out after inspections. I have not been provided a copy of the inspection report.

My question is am I obligated or should I return the EMD? No extensions to the PA were signed. I should also mention that in that timeframe one other buyer had expressed interest in the property but I told them it was under contract.

[Charlie MacPherson]

@Account Closed The P&S should be your guide. There should be language in there that describes what happens to deposits in the event of default.

In the states where I practiced (Mass and Maine), the standard P&S said that in the event of a buyer default, deposits were released to the seller. However, standard procedure requires both parties to sign a release form.

Buyers typically won't sign the release as it gives 100% of the funds to the seller, so almost always the deposits end up being split 50/50.  Indiana law may be different, so you may want to ask your attorney or title company.