The Inspection Deadline and the Late Radon Notice
A buyer and seller sign an Ohio residential purchase contract for $285,000. Earnest money is $5,000, held by the listing broker. The contract says time is of the essence and that the buyer must give written notice of unsatisfactory inspection conditions within 10 days after acceptance. Acceptance is March 3. On March 12 the inspector finds a radon level of 6.2 pCi/L. On March 13 at 6:00 p.m., the buyer texts her own agent: "Radon is high, I'm out." Her agent emails the listing agent on March 14 at 9:00 a.m. The seller says the contingency expired and demands the $5,000. The seller's residential property disclosure form mentioned moisture in the basement but said nothing about radon.
1. Was the buyer's notice effective to terminate under the inspection contingency? Explain the timing and delivery issues.
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Start with the contract language, not with general impressions. Acceptance on March 3 plus 10 days puts the written-notice deadline at March 13. The March 13 text was written, but it went only to the buyer's own agent, not to the seller or listing agent as the contract likely requires. The March 14 email to the listing agent was delivered after the deadline. Because the contract says time is of the essence, a late or improperly delivered notice ordinarily does not preserve the buyer's termination right. The buyer may still negotiate an extension, request a repair credit, or argue that the seller's disclosure was incomplete, but those are separate theories. The licensee should not declare who is legally right; the practical answer is that the buyer's inspection-termination right is at serious risk and the parties should put any agreement in writing immediately.
2. The seller demands that the broker release the $5,000 earnest money to the seller. What may the broker do?
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The broker holds the earnest money as trust funds and cannot simply hand it to the seller because the seller demands it. When the buyer and seller dispute entitlement, the broker should keep the funds in the trust account, notify both parties in writing, and ask for a signed mutual release or a court or arbitration order. If the parties will not agree, the broker may interplead the funds or follow the contract's dispute-resolution procedure. The broker must keep accurate records and avoid taking sides. Earnest money is not automatically liquidated damages just because a contingency deadline passed; the contract may contain a specific remedy provision. The broker's job is custody and accounting, not deciding the legal dispute.
3. What disclosure and representation issues does the radon finding raise for the licensees?
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Radon is a material environmental condition that can affect health and value, so the licensees should not treat it as a minor inspection detail. The seller's disclosure mentioned basement moisture but not radon. If the seller knew of prior radon testing or mitigation, the omission may be a material misrepresentation; if the seller did not know, the buyer's new test still becomes important information for renegotiation. The listing licensee should disclose the radon result to subsequent buyers if the transaction falls apart and the seller proceeds with the knowledge. The buyer's agent should advise the buyer to get a remediation estimate and to put any request in writing before any deadline. Neither agent should give medical or remediation advice beyond recommending qualified professionals.