Steven S. Bloom, Esq.
Cushner & Bloom, P.C.
1170 Beacon Street Brookline MA 02446
DISCLAIMERS
The Rhode Island Supreme Court licenses all attorneys in the general practice of law. The court does not license or certify any lawyer as an expert or specialist in any field of practice.
ADVERTISING.
Steven Bloom, Esq., is licensed to practice in the Commonwealth of Massachusetts. Steven Bloom, Esq. is also licensed to practice in the State of Rhode Island.
Our Office is located in Brookline, Massachusetts. The information provided in this Web Page Set is offered for informational purposes only; it is not offered and does not constitute legal advice.
Cushner & Bloom, P.C. does not seek to represent you based upon your visit or review of this Web Page Set.
The information provided in this Web Page Set is offered for informational purposes only; it is not offered and does not constitute legal advice. Although we intend to keep this information current, we do not promise or guarantee that the information is correct, complete or up-to-date. You should not act or rely upon the information in this Web Page Set without seeking the advice of an attorney.
Cushner & Bloom, P.C. does not seek to represent you based upon your visit or review of this Web Page Set. The attorney-client relationship does not begin until Cushner & Bloom has evaluated the potential client's case and a contract between Cushner & Bloom, P.C. has been agreed upon.
Please feel free to send us e-mail with your thoughts about our Web Page Set or to request more information about us. The transmission of an e-mail request does not create an attorney-client relationship and you should not send us via e-mail any information or facts relating to your legal problem or question. If you are a client of Cushner&Bloom,P.C., your e-mail may not be privileged or confidential. If you are a client, remember that e-mail may NOT be secure. There is a risk that your communication may be intercepted illegally. There may also be a risk of waiver of attorney-client and/or work-product privileges that may attach to your communication.
The Rhode Island Supreme Court licenses all attorneys in the general practice of law. The court does not license or certify any lawyer as an expert or specialist in any field of practice.
ADVERTISING.
Steven Bloom, Esq., is licensed to practice in the Commonwealth of Massachusetts. Steven Bloom, Esq. is also licensed to practice in the State of Rhode Island.
Our Office is located in Brookline, Massachusetts. The information provided in this Web Page Set is offered for informational purposes only; it is not offered and does not constitute legal advice.
Cushner & Bloom, P.C. does not seek to represent you based upon your visit or review of this Web Page Set.
The information provided in this Web Page Set is offered for informational purposes only; it is not offered and does not constitute legal advice. Although we intend to keep this information current, we do not promise or guarantee that the information is correct, complete or up-to-date. You should not act or rely upon the information in this Web Page Set without seeking the advice of an attorney.
Cushner & Bloom, P.C. does not seek to represent you based upon your visit or review of this Web Page Set. The attorney-client relationship does not begin until Cushner & Bloom has evaluated the potential client's case and a contract between Cushner & Bloom, P.C. has been agreed upon.
Please feel free to send us e-mail with your thoughts about our Web Page Set or to request more information about us. The transmission of an e-mail request does not create an attorney-client relationship and you should not send us via e-mail any information or facts relating to your legal problem or question. If you are a client of Cushner&Bloom,P.C., your e-mail may not be privileged or confidential. If you are a client, remember that e-mail may NOT be secure. There is a risk that your communication may be intercepted illegally. There may also be a risk of waiver of attorney-client and/or work-product privileges that may attach to your communication.
Sellers and Buyers
Can Seller Keep the Buyer's Deposit?
More Topics:
A few years ago, Buyers signed a Purchase and Sale Agreement to purchase a home in Worcester, Massachusetts for $355,000 from Sellers. The Buyers gave a $17,750 deposit, representing 5% of the purchase price. Clause 18 of the Purchase and Sale Agreement read: “If the BUYER shall fail to fulfill the BUYER’S agreements herein, all deposits made hereunder by the BUYER shall be retained by the SELLER as liquidated damages.”
The Buyers never purchased the property. They notified the Sellers that they could not buy the Worcester property because they were unable to sell their current home. The Sellers put the property back on the market and sold it a few months later for $360,000.
The Supreme Judicial Court of Massachusetts held that the Sellers were entitled to keep the $17,750 deposit given by the Buyers even though the Sellers sold the property to someone else for more money. The Court reasoned that the “liquidated damages” provision of the Purchase and Sale Agreement was reasonable at the time the Agreement was made and that the 5% potential damages were within the ordinary range for a real estate purchase and sale agreement. Where actual damages are difficult to ascertain and where the sum agreed upon by the parties at the time of the signing of the contract represents a reasonable estimate of the actual damages, such a contract will be enforced by the Court. At the time of the signing of the Purchase and Sales Agreement, the parties here could not know what delays might ensue, what might occur in the real estate market, or how a failed sale might affect the Sellers’ plans, should the Buyers not fulfill their obligation to buy the property. Five percent of the purchase price was a reasonable forecast at the time.
The answer to whether a Seller may, in fact, be entitled to keep the Buyer's deposit depends heavily on the facts of each case.
The Buyers never purchased the property. They notified the Sellers that they could not buy the Worcester property because they were unable to sell their current home. The Sellers put the property back on the market and sold it a few months later for $360,000.
The Supreme Judicial Court of Massachusetts held that the Sellers were entitled to keep the $17,750 deposit given by the Buyers even though the Sellers sold the property to someone else for more money. The Court reasoned that the “liquidated damages” provision of the Purchase and Sale Agreement was reasonable at the time the Agreement was made and that the 5% potential damages were within the ordinary range for a real estate purchase and sale agreement. Where actual damages are difficult to ascertain and where the sum agreed upon by the parties at the time of the signing of the contract represents a reasonable estimate of the actual damages, such a contract will be enforced by the Court. At the time of the signing of the Purchase and Sales Agreement, the parties here could not know what delays might ensue, what might occur in the real estate market, or how a failed sale might affect the Sellers’ plans, should the Buyers not fulfill their obligation to buy the property. Five percent of the purchase price was a reasonable forecast at the time.
The answer to whether a Seller may, in fact, be entitled to keep the Buyer's deposit depends heavily on the facts of each case.
Phone: (617) 608-0019
Fax: (617) 608-0022