Q: We agreed to purchase a home under construction. We have had no say into what the builder is putting into the home. Our financing is in place. We signed a contract for the purchase and delivered $1,000 earnest money. The closing is in about a month.

The problem is that there are too many issues with the house, builder, and real estate agent that we cannot seem to resolve. In fact, there are too many problems to list. Can we cancel the contract?

A: In general, you can’t just terminate a contract. There must be some reason for the termination, and that justification must have some basis under the purchase contract or under a statute in the state in which you are located.

You need to review the contract and determine whether the builder is in violation of the terms of the contract. You may also find out if all of the “problems” with the house would prevent the local municipality from issuing its certificate of occupancy. Certainly, if the builder can’t get a certificate of occupancy due to construction problems, you should not have to close on the purchase of the home.

If you believe that there a problems with the actual construction of the home, you may wish to discuss these with a professional home inspector to determine if these problems are major or minor.

If you discover that the home has major construction or structural issues, you can always try to contract the local building department to determine if they have inspected the home and if they have cited the builder on these issues. If they have cited the builder, the builder should correct these issues prior to your closing.

You should consult with a real estate attorney, who can look over the document you signed, about other options you may have.

Published: Aug 13, 2005