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Legal Lines: Substantial Property Damage
Question: I have a buyer that was under contract when a pipe burst in the kitchen and flooded the kitchen, the garage, under the kitchen, and the living room. Water has caved in the ceiling to the garage and seeped in the walls. My buyer does not want to purchase the home anymore, so we terminated the contract. The GAR Purchase and Sales agreement states that the buyer is allowed to terminate the contact without penalty if there is damage to the home. The seller is saying that it is not substantial damage and he does not agree that the buyer should get her earnest money back. Please give me your opinion on this situation.

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 Answers to these questions are provided by GAR General Counsel, Seth Weissman. Questions and answers are edited for brevity and clarity. Click here to learn more about our Legal Helpline or to submit a question.