By Breanna Raspopovich and Sonia Mann, Attorneys at Parikh Law Group
Between 2020 and 2023, the attorneys at PLG have represented both Buyers and Sellers over 4,000 Real Estate transactions. Not all transactions are meant to close, however. Read more to learn about how our Real Estate and Civil Litigation teams work collaboratively to protect our clients.
Entering into a real estate contract is a consequential decision. Given the high stakes involved, it is natural for buyers or sellers to experience bouts of doubt or even anxiety. This often leads to the frequently asked question: “Can I get out of a real estate contract in Illinois?” The answer, however, is complex and largely depends on the specifics of your contract and circumstances.
Conditions to get out of a Real Estate Contract
A real estate contract, like any other legal agreement, is binding once both parties have accepted the terms. However, there are certain conditions under which you may be able to exit an Illinois real estate contract. These include contingencies, legal errors, and other specific circumstances.
Contingencies
Most real estate contracts include certain contingencies that, if not met, provide a legal exit for the parties involved. The first contingency both Buyer and Seller are protected under is during the Attorney Review/Modification phase. Most real estate Contracts, unless otherwise specifically noted, open the Attorney Review contingency period for 5-business days after the date of acceptance. This time is also the Buyer’s Inspection Contingency period, during which time the Buyer is permitted to have various inspections performed as they deem necessary. If an inspection reveals substantial or material issues with the property and the buyer and seller cannot agree on how to best address those, the buyer may be able to back out. Similarly, if there are any contractual issues or a meeting of minds cannot be met, either party may cancel the contract. However, these contingencies need to be explicitly written into the contract terms and invoked within a specific timeframe or else either party may waive the contingency.
Further, a buyer is also protected through their finance contingency. If a loan doesn’t come through by the finance contingency date the buyer can typically walk away from the deal without penalty. In the event an extension is needed, the Buyer’s attorney may request and if agreed, the contingency’s protection will run with the new date. Typically this contingency period is 5-business days before closing or 45 days after the date of contract acceptance, whichever is earlier.
Legal Errors
While both parties enter into the contract with the intention of completing the transaction, sometimes unforeseen circumstances may arise that make it necessary for one or both parties to terminate the contract. One way to do this is by citing legal errors in the contract.
Legal errors refer to any mistakes or inaccuracies in the contract that could render it invalid. For instance, if the contract contains incorrect information about the property, such as its size, location, or zoning, it could be deemed legally flawed.
Additionally, if the contract was obtained through fraudulent or coercive means, such as misrepresenting the terms of the deal or using undue pressure to get someone to sign, then the contract may be considered void.
If you are considering using legal errors as a basis to exit a real estate contract, it is recommended that you seek the advice of a qualified attorney who can guide you through the process, and help you understand your legal rights and options. Having an attorney who is versed in both real estate contracts and the laws applicable to those can be of significant importance if faced with a challenging situation from which you would like to exit out of.
Other Specific Circumstances
Illinois law recognizes certain specific situations that allow an individual to cancel a real estate contract. One such circumstance is under the Illinois Residential Real Property Disclosure Act.
Sellers are required to provide a disclosure report detailing any known defects or issues with the property. If a seller fails to provide this report or is found to have knowingly concealed issues, the buyer may have grounds to cancel the contract.
While the above conditions provide some opportunities to exit a real estate contract, it is important to note that this is not an exhaustive list, and every situation is unique. More importantly, exiting a contract should never be taken lightly, as it could potentially lead to legal disputes, forfeiture of earnest money, or other financial and legal consequences. Therefore, it is crucial to consult with a real estate attorney before making any decisions.
Role of a Real Estate Attorney in Tough Situations
The role of a skilled real estate attorney in these situations cannot be overstated. They can help you understand the specifics of your contract, assess your options, and guide you through the process if you decide to exit the contract. Whether you’re a buyer or a seller, having the best real estate lawyer on your side is crucial to navigating the complex waters of real estate law. In the event you are a buyer or seller wishing to exit a real estate contract, it is in your best interest to hire a licensed Illinois Attorney to explain risks, forfeitures and to ultimately find a solution to leave the contract without breaching any of your terms.
Parikh Law Group has a team of real estate attorneys serving Chicago and beyond, who bring a wealth of experience and deep understanding of Illinois real estate contracts. We can provide the guidance and representation you need in navigating your real estate contract, while helping you make informed decisions that protect your interests.
If you find yourself contemplating this decision, please do not hesitate to reach out to an attorney from the Parikh Law Group. We can provide the advice and representation you need, ensuring that your real estate journey is as smooth and stress-free as possible. www.plgfirm.com
