My wife and I recently purchased what was listed as a 3 bedroom house. A week before the closing I receive a call from my lawyer that the seller could not attain a C/O for a 3 bedroom house because the upstairs converted attic(which was the houses 3rd bedroom) is not up to state code for habitable areas. So now what was listed as a 3 bedroom 1500 Sq ft home is essentially a 2 bedroom 900 sq ft home with a large attic for storage. The seller refused to lower the price of the home significantly enough for my agreement and threatened if I tried to back out on the deal he would retain my nearly $40,000 deposit because I am breaking the contract. I say the contract I signed was for a 3 bedroom home which I am not receiving and is therefore already void. Can I Back out of this deal and get my deposit back