I am a seller of a property. Buyer entered into 30 day escrow but kept coming up with excuses concerning the loan. subsequently we signed an addendum for per diem charges from original close date to extended date or cancellation of escrow. by the second extended date loan still not approved. I cancelled contract. Can I go to court instead of arbitrate since I cancelled the contract? Is the buyer in breach since loan did not close by the time of cancellation (60 days)? Am I entitled to the per diem charges? Thank you.
Ronald David WiltonEmployment / Labor AttorneyEncino, CA ·
Check your contract to see if all parties checked off the box relating to arbitration and mediation. If so, then you must arbitrate the claim usually after mediation. If not, you can go directly to court. Again, a review of the contract would be necessary to determine whether the buyer breached and if so, what is your recourse.
Yes, if both the seller and buyer initialed the arbitration provision of the CAR purchase agreement. If you litigate by filing a complaint in the superior court, the buyer could file a motion to compel arbitration (or the buyer can waive the requirement to arbitrate and proceed with litigation). As with most CAR agreements, you need to first demand mediation before you proceed with arbitration or litigation in order to be entitled to recover attorney's fees, An attorney would have to review the agreement and the addendum to be able to ascertain whether or not you would be entitled to per diem charges. Did you give the buyer a Notice to Perform before canceling?
Is there any reason you want to go to Court instead of Arbitration? Whatever the reason, Arbitration clauses are favored and most likely will be enforced. Whether or not the clause is enforceable requires a review of the relevant document(s) including the purchase contract as well as any addendums as well as all relevant facts.
It would help to know the wording of the extension and per diem charges. If the contract terminated because of expiration of the extension, then the question is whether the per diem charges survived the termination. An individual can sue in small claims court for up to $10,000. It is up to the defendant to bring up the arbitration clause as an alternative to litigation.
Another option may be small claims court if the damages are smaller than $10,000. The standard CAR form specifies mediation and arbitration however there is an section that excludes actions in probate, small claims, and BK.
Again, just depends what you are trying to accomplish.
