Question

1. Sarah Seller has contracted to sell her home to Brenda Buyer. The home has a serious mold problem that would cost thousands of dollars to repair. Before offering the home for sale, Sarah painted the walls and ceilings. No evidence of the mold could be seen by an inspection of the property. Sarah does not tell Brenda about the mold. Brenda discovers the mold problem after the sale. Should Brenda seek specific performance or rescission as a remedy against Sarah?

Answer must be a paragraph.

2. Most real estate contracts require a purchaser to pay an earnest money deposit at the time the contract is signed. If you are preparing or reviewing a contract that provides for an earnest money deposit, what other contract provisions would you expect to see regarding the payment, use of and return of the earnest money deposit?

Answer 1

1. Brenda do not have any right to raise against Sarah. It is the buyer responsibility and duty to check, verify functioning of the asset or instrument before made an agreement of purchase. But it is not mandatory to the seller to express or describe about the limitations or problems of the asset. In this case, mold in the house is not identified by Brenda before made the sale. But she identified later, but can not do anything. Hence, I can say that Brenda can not raise or do not have any right to raise voice against Sarah in this issue.

2. It is considering as the guarantee for buying or closing the deal. Even though a nominal amount also considered as advance in these kind of cases. before going to pay advance, we must read the doucments, the provisions, related to time tenure for total payment, the asset quality, the delivery dates etc, then only proceed with payments. If either party becomes default, how it is going to be resolve, and settled etc must be explain in the document. Then only the buyer can sign on the papers once he satisfy about all these.