Yusuf Ali appeals the trial court’s ruling that he is not entitled to a refund of the earnest money he paid pursuant to a contract he executed with Michael Aarabi to purchase a shopping center. We reverse. It is undisputed that on September 19, 2001, the parties entered into a standard commercial sales agreement the “Agreement” for the purchase of the property located at 4019 Glenwood Road in Decatur the “Property”. Paragraph 3 of the Agreement, entitled “Earnest Money,” provides, in pertinent part: Purchaser has deposited with Broker $5,000.00 . . . as “Earnest Money” which Earnest Money shall be applied as partial payment of the cash portion of the purchase price of the Property at the time the sale is consummated. . . . The parties to this Agreement understand and agree that the disbursement of the Earnest Money held by the Broker . . . can occur only A at closing; B upon written agreement signed by all parties having an interest in the funds; C upon court order; D upon the failure of any contingency or failure of either party to fulfill its obligations as set forth in this Agreement; or E as otherwise set out herein. Emphasis supplied That section further provides that in the event of a dispute, the broker would be authorized to disburse the earnest money based upon a reasonable interpretation of the Agreement or, in the alternative, to interplead the disputed sum into the court. Paragraph 14 explains the default remedies available to the parties. Under this provision, if the sale and purchase of the property was not consummated due to the purchaser’s default, then the seller would retain the earnest money. Similarly, if the purchase was not consummated because of the seller’s default, the earnest money would be returned to the purchaser. In Paragraph 18, “Environmental Conditions,” the seller warrants that to the best of his knowledge, the Property had never been used for the handling, storage, or disposal of chemicals or hazardous wastes or substances so as to create an environmental hazard. According to this provision, “the term ‘hazardous wastes or substances’ shall mean petroleum including crude oil or any fraction thereof, and any substance identified in . . . any . . . federal, state or other governmental legislation or ordinance identified by its terms as pertaining to the disposal of hazardous substances or waste.” Under Paragraph 23, the parties agreed that the purchaser’s obligation to purchase the property was subject to satisfaction of certain terms and conditions, including an inspection and the purchaser successfully obtaining new financing.
The original closing date was October 15, 2001. Ali applied for a loan with Homebound Mortgage Company; however, approximately one week prior to the closing, Ali was informed that his application had been denied. Aarabi agreed to reschedule the closing for October 31, 2001. Ali applied for financing with Omni National Bank “Omni”, but the application had not been processed by the closing date.
