Fate of Earnest Money If Sale Falls Through

I was surprised at the inaccurate information that Robert J. Bruss relayed in his Aug. 15 column (“Who Gets Deposit Money If Sale Fails?”).

He wrote that “if no solution evolves within a reasonable time, usually 12 months, the holder of the trust funds is supposed to interplead the money into court and ask the judge to decide who gets the good faith earnest money deposit.”

Under the law, the escrow holder need not file an interpleader for three years, not one year. And if the escrow holder files an interpleader, they may recover their attorney fees and costs from the deposit for providing this service. So depending on the amount of deposit, there may not be much money remaining.

However, there is another alternative for both buyer and seller. By law, good-faith deposits held by escrow, which are to apply to the purchase price of one-to-four residential units, must be returned within 30 days after the party entitled to the funds demands them.

A seller or buyer wrongfully refusing to release an escrow deposit is liable for a money penalty three times the amount wrongfully withheld, but not less than $100 nor more than $1,000, plus attorneys fees (Calif. Civil Code Section 1057.3).

Since the forfeiture-of-deposit provision does not entitle the seller to any funds, the seller must release the escrow deposit to the breaching buyer, unless he has out-of-pocket losses. If the seller fails to release the funds within 30 days, the seller will be liable for the $100-$1,000 penalty.

The party entitled to the funds must make a written demand to escrow for the release of the funds. If the funds are not released within 30 days after written demand, the party then must file suit to force the release of the deposit. The escrow agency then deposits the funds with the court, relieving escrow of any further responsibility to account for the funds.

JACKIE PHILLIPS-EDDS

Co-owner and manager

Roadrunner Escrow, Palm Desert

Confidence, Reporting Lag But Home Sales Up

It took until Page K9 and a story that measured only 2-by-3 inches (“Home Sales Rise in Valley,” Aug. 15) to tell the public that sales of homes in our San Fernando Valley rose a whopping 23.6%.

This is a huge jump! If this were news of a sales decrease of the same proportion, it would have made the front page in large bold print. Come on you guys! With interest rates as low as they have been in 20 years and prices as low as they’ve been in 10 years, the only thing this real estate market is lacking, is confidence and knowing that other good people are buying houses too. Let’s shout the good news!

BRUCE D. GALE

Coastal Development Co.

Calabasas

Water Gardens Pose Risk for Children

Your article, “Small-Space Water Wonderland” (July 11), described the delights of patio or balcony tub gardens filled with water lilies and goldfish for folks who have no room for exotic back yard pools. They sound lovely, but. . . .

The words, “Children find these miniature water kingdoms fascination . . . “ should have run a red flag up the pole. Small children, who are top heavy, can drown in only a few inches of water if they tumble head first into a container, and a toddler reaching into a tub for a goldfish or exotic flower is possibly at even more risk than a child poolside, because an adult may not perceive something as idyllic as a tub filled with exotic water plants as a danger.

Please warn your readers to exercise caution and common sense, so the “joys of water gardening” don’t turn into a tragedy for their own child or one who is visiting.

CHRISTINE SINRUD SHADE

North Hollywood

Mortgage Principal Not Home Office Deduction

In his article headlined “Home Office Is Tax Deductible . . . Sometimes,” R. Daniel Foster gives an example of a 200-square-foot office in a 2,000-square-foot home. He states that 10% of all household expenses could be written off, including “rent or mortgage payments.” It’s a mistake to say that 10% of the mortgage payments is deductible. A homeowner who has a home office can deduct a portion of interest, taxes and insurance, plus depreciation, but mortgage principal is never deductible.

Foster states, “It’s unwise to claim a home office deduction during the year a home is sold” because some of the gain on the sale of the home would be taxable. If the person had claimed a home office deduction in previous years, then this statement could be misconstrued as an invitation to cheat. Is Foster suggesting that it’s OK to claim a home office deduction as long as it’s not claimed during the year the home is sold? When a home is sold, the IRS might look at previous years returns to see if the person claimed a home office deduction. If so, they might say that some of the gain on the sale of the house is taxable because part of the house was used as an office in previous years.

DAVID M. FOGEL, CPA

Article Insensitive to Schizophrenia Sufferers

I just finished reading the Aug. 8 Speaking Out by Julie Kibbler (“Plumbing the Depths”) and became very disappointed with your publication. The reason for this is because of Kibbler’s comment, “The contractor must have been schizophrenic as the work and materials throughout the building range from good quality to atrocious.”

Schizophrenia is the clinical name for a biological brain disease. It is not an adjective. It is not characterized by a “split” personality (technically called multiple personality disorder or MPD). And it is inaccurate to use the name schizophrenia in terms unrelated to the illness itself.

There are more than 3 million people in the United States alone who suffer from schizophrenia. Add their parents, siblings, friends and you have 10 million or more Americans who are insulted and hurt by this kind of irresponsible journalism and stigma-producing usage. My two brothers have schizophrenia and struggle to make a quality life in a world that is largely ignorant and cruel to their situation. Please don’t make it harder for them.

MAXINE GORDON

Los Angeles

Ginkgoes Discovered, Imported, Extinct . . . Not!

The reference to ginkgo trees in the Aug. 14 article by Garden Editor Robert Smaus (“Jurassic Plants”) was enough to make a cat laugh. “Discovered alive and well in China in 1956,” indeed not! There was a 40-year-old ginkgo growing in our London garden when I was born in 1926. Further, the name first appears in English in 1808, (according to the Oxford Dictionary) some 30 years after Linnaeus classified the plant as a fern.

G.F. STEWART ELLENS

Santa Monica

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Your article says that ginkgoes were found in China in 1956. They must have been imported from California, as we have grown them for many years.

P.O. SCHADE

Visalia

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What a surprise to read that ginkgo trees were thought to be extinct until discovered in China in 1956. We had one in our yard in Michigan City, Ind., when I was a child. My mother said it was planted around 1900.

NORMAN LEIST

Garden Editor Robert Smaus replies: Obviously, I should have been more clear--the ginkgo was only discovered growing in the wild in 1956. It was first discovered in 1874, growing in Chinese temple gardens, and was thought to be extinct in the wild.