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The escape clause is a clause, term, or condition in a real estate contract allowing one party to the contract to avoid performing their duties in relation to the contract. Escape clauses can offer both buyers and sellers of homes to exercise legal rights but can also be subject to abuse, so it is important to work with experienced Austin, TX real estate attorneys when you are in the process of buying or selling a home in Texas.
When an agreement is created for the sale of a house, a buyer might include an escape clause to allow themselves the opportunity to escape from the contract without being liable for breach of contract. Similarly, a seller might include an escape clause to allow them to accept a better offer for a home.
How Escape Clauses Work
One of the most common escape clauses is the phrase “Subject to a builder’s inspection to purchaser’s full satisfaction.” Such a clause will allow a home buyer to escape from a contract when a home inspection reveals any irregularities or defects.
A “Subject to 30-day due diligence” clause can give a buyer a 30-day buffer period to inspect any and all aspects of a home before committing to the purchase. A 72-hour clause can allow a seller to accept a buyer’s offer to purchase their home while allowing the seller to continue to market the home.
With a 72-hour clause, a seller who receives a better offer to purchase a home can accept the new offer and activate their escape clause by notifying the original buyer about the new offer. An initial buyer will have a specified amount of time to fulfill all buyer contingencies or cancel the contract and lose the property, and then a buyer cannot fulfill the contingencies, the original contract cancels, and the new offer takes precedence.
A home seller usually has several opportunities to escape from an offer once they have accepted it so long as an agreed-upon condition does not expire. A buyer will not have the same option to back out of a commitment unless their condition on the sale expires under normal circumstances and they have the cooperation of a seller.
Abuse of Escape Clauses
Keeping in mind the common surveyor’s inspection to the purchaser’s full satisfaction clause, it is not uncommon for a buyer to contact a home inspector that they specifically instruct to find some kind of fault in the property so they can escape their contract. A buyer who has remorse about making an offer can easily use an escape clause to back out of their offer when they create a fraudulent fault with a home.
Sellers are less likely to abuse escape clauses, although some sellers may abuse the 72-hour clause by claiming to have received better offers when the new offers are not actually legitimate. A buyer needs to be able to prove that any new offer is actually from a real home buyer.
Call Us Today to Speak with Austin, TX Real Estate Attorneys
If you are in the process of buying or selling a home and need help understanding your rights under escape clauses in Texas, you will want to be sure that you have legal representation. Austin, TX real estate lawyers will be able to help you understand all of your options and ensure that you are able to complete your transaction as quickly and efficiently as possible.
Structure Law Group, LLP knows how stressful buying or selling a home can be for all parties involved, and we will work closely with you so you never have to handle anything on your own during this process. Call (512) 881-7500 or contact us online to schedule a consultation with our Austin, TX real estate attorneys.