To Have and Have Not: A New California Appellate Court Ruling Finds that Non-Refundable Deposits Are in Fact Refundable
In a decision sure to raise a few eyebrows, the California Court of Appeal has ruled that a seller of real property must return a non-refundable deposit.
The dispute arose out of plaintiff Bradford Kuish’s agreement to purchase William and Rhonda Smith’s Laguna Beach home for $14 million. In the agreement, Kuish was required to make two non-refundable deposits totaling $620,000, with which he complied, although he later decided not to purchase the home. After the escrow was cancelled, the Smiths accepted a backup offer and sold the property for $15 million to a third party. The Smiths, however, refused to return Kuish’s deposit, and he sued.