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I received my earnest money back two months ago on a real estate transaction that was cancelled due to inspection findings.

Now today I received another refund in the same amount for the same property. What can legally happen if I cash it?

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    They can demand it back.
    – keshlam
    Commented Dec 11, 2016 at 5:04
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    If you knowingly take money that isn't yours, it's theft. It doesn't matter that it was easy and convenient, or based on their fault.
    – Aganju
    Commented Dec 11, 2016 at 7:23

2 Answers 2

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Now today I received another refund in the same amount for the same property. What can legally happen if I cash it?

Legally the money is not yours. The best course for you is to return the check via certified mail, notifying them that you were already paid. Just because someone made an error, does not mean the money belongs to you.

If you don't and rather cash the check; sooner or later depending on the amount, it would be found out by the company as part of reconciliation/audit; they will/can then demand the same back from you.

It is up to the company to decide if simply refund is sufficient; or refund plus some interest or start a legal proceeding against you as "intentional theft".

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I would not take any action with the check (neither return it nor cash it), but instead contact the bank. We live in the modern era where you can call someone on the phone or email them, and get nearly instant feedback. Use this to your advantage. Find out why they refunded you the money twice: was it an error on their part (in which case you just tear up the check or return it to them and be done with it)? Is it possible you're wrong about it being twice refunded (maybe the first check didn't go through properly or was only for half the amount, and you're just wrong)? Maybe they had some sort of guarantee that they failed to live up to and are correctly refunding you double your money.

Probably the first, of course. But you should call them and ask, and verify what they want you to do, before you take any action - particularly one that costs you money. And certainly don't just cash the check; if it is a mistake, they'll be asking for that money back later, with interest, and be within their rights to do so.

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