The Second District held that a clause allowing an “appraisal contingency” was valid which permitted the prospective buyer to back out of a contract without penalty.
The case is Nigel and Christine Gibney v. Randy and Helen Pillifant (LaRose, Villanti, Fu;mer).
The home sales contract was “contingent upon this property appraising for no less than $620,000 to be conducted by a local appraiser.” Buyer performed an appraisal which came back under that amount. Seller then requested an appraisal which was higher. Who wins?
The panel held that “although inartful, this [clause] is not ambiguous” and that “appraising for no less than $620,000″ means that NO appraisal may be back less than that amount. It was suggested that the sellers could have reserved the right to a competing, controlling appraisal.