Breach of Construction Contract

Q: Last year, I put a down payment of $5,000 on a home with a local home builder. I put a contingency in the contract that I needed to sell my current house before I could buy the new house.

The builder came back with an addendum stating that I needed to remove the contingency from the contract or they would sell my house to another buyer. That was fine with me. My agent says that the builder will now need to refund my down payment. I called the builder and a person who worked at the builder said I would be getting my refund soon.

I have called and contacted the sales agent and builder since December. I still haven't received my earnest money back. The builder stated that it would take up to twelve weeks or more to get my refund. We're way past that now.

I will send a letter to the builder but he already has two written requests from me for a refund of earnest money.

What other action can I take to rectify the situation?

A: I think it's awful that your builder is exhibiting such bad behavior. But given what's going on (or, what's not going on) in new construction, you can imagine that the builder is trying to hold onto every dollar he can.

What can you do? You can sue your builder for breach of contract. You can also file a complaint against the builder with the state agency that regulates home builders or contractors, as well as the Better Business Bureau (bbbonline.org). You may also contact the local municipality where you were buying the home and see if they have a department that might handle complaints against builders.

But I think your first stop should be with a good real estate attorney who may be able to place a call or write a letter to grease the wheels and get you your money. In any case, your attorney should be able to guide you through your legal options.

NOTE: Ilyce R. Glink's latest ebooks are "Credit Scoring Secrets" and "How to Find a Great Real Estate Agent," which are available at her new, all-video website, www.expertrealestatetips.net. If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11a-1p EST. You can also write to Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact her through her website, www.thinkglink.com © 2008 by Ilyce R. Glink. Distributed by Tribune Media Services