Q: Did Seller void a contract by not closing in time?
My mother entered a contract to purchase a home. In the document she signed, it states very plainly that closing must be on or before September 22, 2023. My mother was told possession would occur at closing.
The owner of the property was not ready to close on or before September 22nd, instead she decided to take a last minute vacation and we were told by our realtor the seller would require more time. My mother didn't approve of this. The seller did not close on or before 9/22 and my mother withdrew her offer four days later. On the next day after my mother withdrew the offer, the seller's lawyer states seller is "ready willing and able to close," despite my mother withdrawing her offer already. The seller's lawyer filed Time of the essence despite the offer being removed and now claim they don't have to give back the "Good faith" deposit of $5K. My mother argues seller voided the contract when she didn't close in time. Who is in the right? My mother feels taken advantage of.
A: Your mother should have had an attorney since the contract likely required that closing be on or about September 22, 2023, and if the Seller could not do so, the Purchaser, your mother, had to make a TOE demand to force a closing. But as matters developed, your mother likely breached the contract. She may forfeit the deposit because a right to cancel usually does not exist, and refusing to close as demanded by the Seller is often considered a downpayment forfeiting a breach of the contract.
Carl Nelson agrees with this answer
I agree with Mr Smollens. It appears from your question that time was not originally made of the essence in the contract (since you said the seller’s attorney “filed time of the essence”), and accordingly their not closing on the date may not have been a breach if you did not provide the proper notice to make it so.
Also, once you are in contract the buyer can not simply “withdraw the offer,” because you have more than an offer, you have an accepted offer and a contract. If she no longer wants to proceed with the sale, you can try to work something out to avoid losing the whole deposit, or maybe they breached in some other way that can act as an offset to use in negotiation. Regardless as the seller has an attorney your mother should too, otherwise it can be an unfair playing field.
A: It could be a breach, and the terms about time being of the essence do not help her position. Attorneys sometimes frame time periods with a margin of leeway in contracts. Good luck
If the contract explicitly stated that closing had to occur on or before September 22, 2023, and the seller failed to close by that date without your mother's consent for an extension, then the seller may have breached the contract.
Your mother's subsequent withdrawal of her offer seems to be a response to the seller's inability to close on time. Typically, in such cases, the party not in breach is entitled to the return of their deposit.
However, the specifics of the contract and the circumstances surrounding the failure to close, including any provided for contingencies, will be critical in determining the rights of your mother. It is advisable to have a legal professional review the contract and all relevant communications to advise on the best course of action.
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