Deal feel through... attorney won't release my hand money!

[Jerry Kisasonak]

I entered into an owner financed deal. The seller wanted to use their attorney to handle the closing. I sent $600 hand money to their attorney as was required in the sales agreement. After the title search came back I was told that there was a line of credit on the home. That obviously killed the owner financing arrangement. The outstanding loan balance  exceeded the purchase price - the deal is off.

The sellers disappeared. Now the attorney is refusing to refund my hand money stating that they incurred a cost of $473 for title abstract, lien letters, etc. I told him that it was not my fault that the deal didn't close and that he need to take that up with the sellers. He said he has tried to and they aren't returning calls. He kept saying that he was not going to eat that expense. What is my recourse at this time?

[Jerry W.]

@Jerry Kisasonak, I am going to disagree with everyone except @Kevin McGarrey.  I am not licensed in your state so this is not legal advice.  First you are not his client.  If this guy was their attorney, he gets paid by them.  In the absence of an agreement in writing he cannot expect a non client to pay his fees.  There is no contract between him and you.  Second he must state to you the legal reason to take your earnest money out of his trust account and keep it, just saying I am not going to eat this does NOT cut it.  If he does not have the professionalism to get money up front too bad for him.  Third politely tell him it is your money and you are not his client, and if he takes your money you will report the theft to the state bar.  Ask him what normally happens to attorneys who steal money from trust accounts.  He cannot use the leverage of holding money as security as an excuse to pay himself at your expense. I can answer that question, they get disbarred.