Is Time Of Essence clause standard in Sales contracts
I understand this to mean if buyer does not close by a time period specified in the contract then the downpayment is forfeited. My attorney’s answer is non-committal in an avoid-litigation manner (i.e some contracts do, some don’t). So I just wandered how common this is. I’m a newbie.
I understand this to mean if buyer does not close by a time period specified in the contract then the downpayment is forfeited. My attorney’s answer is non-committal in an avoid-litigation manner (i.e some contracts do, some don’t). So I just wandered how common this is. I’m a newbie.
Your lawyer sounds like a bit of a pussy, so beware at all costs of the shilly-shally he brings out. Take the bull by the urns, and only buy it if you want in now. My boyfriend tried to talk me out, and I just bought the best thing I could at that time. Which if you ask my humboldt opinion, was the right thing then and also now.
Its not in most contracts but its not uncommon either. It depends on the situation.
Provided the date is far enough out that you can meet, I don’t think its unreasonable for a TOE clause to be included. The sellers are agreeing to hold the property for you for x period of time while you secure financing. You shouldnt have an unlimited amount of time to do your bit. Provided you are planning on purchasing the home by the date you set forth in the contract, why would you have a problem if the sellers held you to it? In all likelyhood, they are just trying to protect themselves from the few unscrupulous buyers out there who take advantage of the loseness around closing date in NYC.
Your lawyer is both right and too general. Don’t accept it unless it is a dealbreaker or if you are paying cash. Your lawyer should push back. If seller insists, get your lawyer to find out why — as in what are the seller’s circumstances that warrant it. If you must accept the term, push the TOE date out as far as possible. Your lawyer shoyuld be able to give you advice as to how much time that actually buys you, as there is practice and caselaw out there as to how much time you have after the TOE date before it is truly enforceable to void the deal and cost you your deposit. If you do accept the term, tell everyone — appraiser, bank, anyone who might delay you, that it is a TOE deal and therefore they must act fast. Let them feel a bit of the heat so they move faster so you breathe easier. make sure you can live with the TOE date, and clear it with your bank that they can turn the loan around and close that fast, including time to line up the bank lawyer and title closer for closing.
If your lawyer won’t fight over the term for you, get another one.
keep in mind that if the delay is the seller’s fault and not yours then TOE doesn’t apply. Be sure to put down all of the items you require such as repairs, curing of violations, due diligence items, etc. If they get them to you in a timely manner (set forth in the contract) then you can’t drag your feet nor should you. If they don’t then the TOE clause become invalidated.
In New York, time of the essence provides broad latitude due to innumerable holdups. Outside of New York it has more teeth.