Go here for this posting - earnest money forfeited or return to Purchaser?
Q.
Azmi is selling his bungalow house. The buyer Janice agreed to purchase it and paid the 2% earnest deposit to you as the REN. You took the money and paid into the firm's client's account. The agreed terms is to come to a signing of Sale and Purchase Agreement within 2 weeks, last day being Saturday 19th of May.
However, very much the desire of Azmi to sell his bungalow to Janice, he is also pressed to conclude the signing of SPA before his overseas trip on 20th of May. Yet, Janice kept on saying that she cannot take out the down payment earlier than 24th May. Azmi is out of frustration and asked you to "call it off!"
Can you do so? What about the earnest deposit paid? Should it be forfeited or returned to Janice?
A.
In the above scenario, Janice has not kept to her 14 days agreed time frame to come out with her further 8% of the down payment (10% - 2% earnest deposit). Moreover, she had delayed and further delayed the meeting time to pay the 10% down payment and signing of SPA.
Hence, she failed to do the "signing SPA and paying of 10% down payment" at or before the specified time - 19th May. The contract becomes voidable at the opinion of the promisee - Azmi.
You may then, with this instruction by Azmi, inform Janice and cancel the agreement. So the contract is thus void.
Then, how about the earnest money of 2%? Should it be returned to Janice? Or forfeited?