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My sister bought her home a little over a year ago. During the home inspection she found that the roof only had 2-3 years left of life. The seller agreed to cover half the cost of the roof and left her money in escrow for the roof repair. Fast forward a little over a year and the seller's lawyer sent a a notice requesting the money back since the repair was not done in a timely manor. Her contract had no reference to a timeline. From my perspective the money is hers to apply toward the roof whenever she need to. Even if she move before fixing the roof, she can use this money to go towards roof repairs for the future owners. It's in the United States, the state is California. It only has been 1 year.

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    Money contributed by a seller to compensate for a defect in a house is normally just a discount on the purchase price, the buyer is free tio repair or not as and when s/he wishes. I will need to find specific authority to make this an answer, perhaps CA is different. Sep 21, 2021 at 22:39

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Contracts contain an implicit term that obligations will be carried out in a reasonable time

While the situation is unusual and we obviously don't have the specific terms of the agreement, it would appear that the vendor agreed to contribute to half the cost of the roof repair and your sister was obliged to contribute the other half and arrange for the roof to be repaired.

Implicit in this is that she would do this within a reasonable time. Your sister does not have the right to keep the money in limbo indefinitely.

It's open to argument whether a year is a reasonable time or not. Similarly, if your sister is in breach of the agreement, the vendor would probably only be entitled to damages for what they have lost; they would not normally be entitled to terminate the contract. Their damages might be assessed as the difference between what their share costs now compared to what it would have cost a year ago - this may be nothing or a lot depending on how prices have changed - and interest lost on the balance that should have been returned to them.

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