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July 2, 2009
If Closing Date is Postponed?
I signed a contract to buy a 2-bedroom in Park Slope. In the SUBMIT OFFER form, I stated I needed to move in by July 24th. The sellers agreed and this was also but into the contract (closing on or before July 24th). My lawyer said that the seller does have 30 days extra if he wants it to go to closing. Is this true? The contract has been signed and the 10 percent deposit has been cashed. My landlord will not renew my lease for only one month and I have no where to go. I made an all-cash offer on the place I agreed to buy and my only request was to move in by July 24th. Do I have the ability to cancel the sale and get my money back if the closing isn't on time? Thank you.
Comments
Yes, that is true. Too bad your lawyer didn't make that clear. I believe you are out of luck unless you can negotiate something with the buyer. Of course, in this market, sellers may be willing to work something out.
Posted by: southslope11215 at July 1, 2009 9:19 PM
My understanding is that the seller can stay in the property past closing, however, he/she will have to pay you a daily rate for the privilege. The amount to be paid should be specified in your contract (usually a deposit against damage and then a per diem amount-- and one rate for day 1-30 and then a higher deposit and rate thereafter). This seems to be standard language, so I wouldn't let the fact it's included in your contact worry you. Hopefully the seller have been upfront with you about when they are prepared to move (before July 24th) but if they do stay past closing you will be compensated.
Posted by: fawn at July 1, 2009 10:29 PM
I think southslope has a more accurate take on the problem. Your lawyer should be able to explain this better, and don't take this as legal advice, but your 7/24 specified closing date does not give rise to any leverage that would compel them to close by then. It does allow you to declare "time of the essence" then, which could lead to a seller Have your lawyer start pushing hard for a timely closing and see what happens.
Posted by: slopefarm at July 1, 2009 10:48 PM
Ves, I assume that you maybe a first time homebuyer, even so, someone: your lawyer, your broker, a friend, should have told you that closings get delayed as often as they happen on time. I'm also baffled about your retorical statement "My lawyer said that the seller does have 30 days extra if he wants it to go to closing. Is this true?" It's either you know this or you don't, especially if time was of the essence to you. Do you have copy of the contract? Contracts usually state: "on or around" a specific date. If the seller can't move because of a problem on their side, you may have had a case but if there is a 30 day clause, you are probably out of luck. Ask your LL if you can stay another month or go to a hotel/storage. If there is no clause, you have to let your Lawyer earn his/her pay by sorting it out.
Posted by: Crownlfc at July 1, 2009 10:53 PM
Yes the seller may have to pay a daily "rent" for each day past the closing but I'm sure that doesn't help you. Your Lawyer should have explained all of this to you.
Posted by: Crownlfc at July 1, 2009 10:59 PM
You cannot cancel the contact and get your down payment back at this point.
You do not mention whether this is a co-op or condo, but I am assuming that if it is a co-op you already have board approval or if it is a condo the board has already submitted the waiver.The "on or before" phraseolgy is a little bit of a gray area BUT
The "on or before" phraseolgy is a little bit of a gray area BUT
You should advise the attorney that you want him or her to serve a time of the essence notice for a july 24th closing TODAY upon the seller's attorney. In that notice your attorney should indicate that not only will the sellers be responsible for damages (ie: paying your accomodations, moving fees, etc) but that you will have the option to hold the sellers in default if they don't close by July 24 and subsequently be entitled to your down payment back.
YOu are paying all-cash and you have to make the sellers feel like they may lose this deal and spoil all of their plans if they don't get their s**t together to get out in time.
Posted by: realestateconfidential at July 2, 2009 7:03 AM
There are lots of short term rentals available right now in Manhattan since the rental market is so bad.
Why not have your moving company put your stuff in storage and rent a furnished rental or find a short term sublet for the extra month?
Sure you're being inconvenienced, but you won't be out of pocket that much money. I bet you could even cut a deal with a hotel (vacancy rates have soared) and not have to even make your own bed for an entire month.
Posted by: IronBalls at July 2, 2009 7:38 AM
Have your lawyer try to negotiate for the seller to pay YOU to stay somewhere during the time between 7/24 and actual closing. Apparently some of the other posters don't understand your question, but southslope & slopefarm are correct, you can't back out because of this
Posted by: daveinbedstuy at July 2, 2009 8:09 AM
Many thanks to all who so kindly replied. Yes, I am a first-time homebuyer. No, my lawyer didn't tell me upfront. And yes, I asked him to do the time of essence notice. Thank you all again!
Posted by: vesnaspring at July 2, 2009 9:46 AM
You said "My landlord will not renew my lease for only one month"
And if you don't move out on time? What will happen? Eviction proceedings take months.
If you a really in a bind have a talk with your landlord - don't just take 'no' for an answer - offer a bit more than a standard one month rent for a one month extension.
If all else fails, play hard-ball!
Posted by: SenatorStreet at July 2, 2009 9:50 AM
I'm with SenatorStreet. You've been put in an unfortunate situation that you unfortunately will have to "pay forward" to your landlord, whether he likes it or not. Homelessness is not an option!
Tell him kindly that you will be staying for another month and will be paying him for it in usual fashion. Then make sure the sellers pay for your time accordingly.
Posted by: feral at July 2, 2009 12:22 PM
They can even get another 30 days out of it for a total of 60 days in NY. 30 days from the closing date and then you can issue a time of the essence closing which gives another 30 days. It's unfortunate but these things happen more often then you think.
Good luck, there are a lot of short term rentals out there.
Posted by: Adam Incognito at July 2, 2009 1:01 PM
Sending a time of the essence letter now has no legal effect at all - zero - and if your contract has an "on or about" closing date, then you'll have to wait until August 24 to declare time is of the essence. Also, you can not seek rent and/or carrying costs unless you have in fact purchased the property, and the former owner is still living there whether purcuant to a post-closinf possession agreement or otherwise. Your lawyer screwed up by failing to tell you that unless the contract has a time of essence clause, a closing can be adjourned up to 30 days without repercussions.
Posted by: jnjnjn2 at July 2, 2009 1:20 PM
We've been through the same thing recently."On or around" allows 30 days of wiggle room. "On or before" is a harder definition. It means there is a breach of contract if the closing does not happen within that time frame. Whoever delayed forfeits the deposit. So if your seller pushed past the "on or before" date you can step out of the deal and reclaim your deposit. Your lawyer should explain all this to you.
Posted by: marlowe at July 2, 2009 8:10 PM
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