Juntache, Both Buyer and Seller in San Francisco, CA

Does a 24 hour Notice to Perform (to remove loan contingency) expire over the weekend?

Asked by Juntache, San Francisco, CA Sun Aug 23, 2009

The Notice was served via email to the Buyer's agent on Thursday evening, and the agent verbally acknowledged receipt Friday morning. Is it considered failure to perform if the loan contingency was not removed until Monday morning?

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BEST ANSWER
You raise an interesting legal question about how contracts expire. While your agent can explain about the cancellation clauses, whenever you come across any grey areas, it is best to check with an attorney.

Since I am not a lawyer and cannot give legal advice, I discussed your situation with my real estate attorney. His opinion is that the 24 hours would normally begin when the agent acknowledges receipt and it is reasonable to expect the agent to contact the buyer on Friday. However, since the weekend is not considered “normal business hours”, your buyer would have a good argument that his agent has until Monday to get back to you.

Here are a few things to note about the California Residential Purchase Agreement:
- Section 17 of the contract specifics removal of contingencies and cancellation rights.
- Contract times are calendar days, unless specifically stated as business days (the deposit check must be deposited into escrow or trust account within 3 business days).
- Cancellation must be in writing and signed by both buyer and seller.
- If a buyer fails to remove a contingency, the contract will continue until a seller objects. Sellers are required to provide 24 hours for removal of contingencies (e.g loan pre-approval, inspections, sale of another property). There is also a Demand to Close form allowing buyers an additional three calendar days, but this form is currently optional.
- The Notice to Perform usually requires action within 24 (default) to 72 hours. During this period, the buyer would need to sign a release of contingencies. If the buyer is unable or unwilling to release the contingencies, he could use the Extension of Time addendum to request additional time.
- If a buyer fails to respond to the Notice to Perform, the contract is not automatically cancelled. At that point it could become voidable and the seller could cancel the contract using the Cancellation of Contract form.

In my experience, most people operate in good faith. In your case, I would make sure your agent is on top of the situation by staying in touch with the buyer’s agent.

Good luck!
0 votes Thank Flag Link Tue Aug 25, 2009
It expired on Saturday...

Gregory Garver - Commercial Real Estate Broker
Broker License# 01716531
(415)225-9894
gregory.garver@gmail.com
http://www.gregorygarver.com
0 votes Thank Flag Link Tue Sep 1, 2009
Everything is negotiable...but it's not an agreement until you have it in writing and signed by both parties to the contract....especially if it's a verbal agreement between two agents who do so without client's consent or involvement. Going down the legal slippery slope... I would advise you to speak with a real estate attorney.
0 votes Thank Flag Link Thu Aug 27, 2009
Thanks, everyone for your answers. We are about to mediate. Both agents were aware that the Notice to Perform expired Saturday.

Now my question is: If Seller's agent makes a verbal agreement (about extension) with Buyer's agent without Seller's knowledge or consent, is Seller still liable? We know Seller's agent breached her fiduciary duties to Seller (that's a separate dispute), but does Buyer still have a case against Seller and force Seller to sell even though Seller did not allow any extension of the NBP?

Thanks in advance!
0 votes Thank Flag Link Thu Aug 27, 2009
Juntache,
24 Hr contingency means just that 24 hrs.


Good Luck!
0 votes Thank Flag Link Mon Aug 24, 2009
24 hours is 24 hours. All of the standard contracts are actual days. It is defined in the definitions section of the contract. Another point that defined there is when does time begin. Is the first day the day you received it or the following day. If your agent was e-mailed notification at a minute after midnight do you have till a minute after midnight to take the action. Depends. I've heard it argued that e-mail is not notification, it has to be personal or fax and to the broker's office not the agent, since the broker is technically the agent.

Consult an attorney and the broker of record, your agents managing broker with further questions. But clearly it is not working days it is actual days.
0 votes Thank Flag Link Mon Aug 24, 2009
Jed Lane; Fog…, Real Estate Pro in San Francisco, CA
MVP'08
Contact
Unless otherwised stated, the time on the contract is calendar days not business days.
0 votes Thank Flag Link Sun Aug 23, 2009
Hi Juntache,

CAR Form NBP (Notice To Buyer To Perform) states:

"BUYER: If you do not remove the contingency(ies) (C.A.R. Forms RR and CR) or take the contractual actions specified above within 24 (or ________) hours (but no less than the time specified in the Agreement) of receipt of this Notice to Buyer to Perform, Seller may cancel the Agreement."

If the default 24-hour time was not modified by filling in a longer period, and/or the Buyer has not removed the outstanding contingencies, it would appear you are now in the position of canceling the agreement if desired. You should check with your agent to make sure the Buyer has in fact not sent any communications removing contingencies before acting.

Best, Steve
0 votes Thank Flag Link Sun Aug 23, 2009
Juntache:

Most time frames in purchase agreements are actual days, not business days, and weekend days count. Without looking at the contract, I'd say it has expired.
Web Reference: http://www.carlmedford.com
0 votes Thank Flag Link Sun Aug 23, 2009
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