FACTS:                    

Buyer and Seller enter into a Residential Resale Real Estate Purchase Contract utilizing the October 2022 Arizona Association of REALTORS® form.  Buyer submits to Seller their Residential Buyer’s Inspection Notice and Seller’s Response (“BINSR”) on an October 2022 Arizona Association of REALTORS® BINSR form.  The BINSR identifies that the condition of the roof is disapproved by Buyer.  The Buyer’s submitted BINSR provides Seller an opportunity to address the disapproved item; Buyer submits a proposed addendum with the BINSR which, if executed by Seller, would grant Buyer a $10,000 credit.  Buyer does not present the repair of the roof by Seller as an option on the BINSR.  Seller refuses to execute the addendum granting the credit but agrees to pay a contractor to fix the roof prior to close of escrow.  Buyer does not want the roof repaired during escrow and cancels the contract.

ISSUE:                      

Who is entitled to the earnest money deposit?

ANSWER:                

See discussion.

DISCUSSION:

Pursuant to section 6j of the Purchase Contract, “[i]f Seller is unwilling or unable to correct or address any of the items disapproved, Buyer may cancel this Contract within five (5) days after delivery of Seller’s response or after expiration of the time for Seller’s response, whichever occurs first, and the Earnest Money shall be released to Buyer.”  Assuming the Buyer cancelled within five (5) days after the Seller declined to agree to give the Buyer the credit, the Buyer is entitled to a return of the earnest money deposit.