Are My contingencies cleared if my buyer has not signed off within the 17-day period?

Asked by heymjo, Las Vegas, NV Thu Feb 7, 2013

My buyer has cleared all of the contingencies except signing off on the inspection results. It has now been 6 days past his 17 day contingency period. He had his inspection done over 3 weeks ago, and he has yet to sign off on the inspection contingency. My agent has let things slip as I have been bugging her to get him top sign off and she is supposed to have sent him a 48-hour demand to perform. So my question is this, since he did not sign off within the 17 days, is that contingency legally considered cleared? If he backs out of the purchase at this point, do I get to keep his deposit? Does he still have the 48 hours to back out or is it too late and the 48-hour notice to perform is just considered a courtesy?

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Marty Walker’s answer
Marty Walker, Agent, Los Angeles, CA
Thu Feb 7, 2013

Contingencies need to be removed actively, which means in writing, and preferably on a contingency removal form. You would be entitled to keep the buyer's deposit only if he/she backs out of the transaction after removing all contingencies. Since the 17-day contingency period has passed, and since you've delivered a notice to perform, you can now cancel the transaction if the buyer doesn't remove the contingency within 48 hrs of receiving the notice. But you would not be able to keep his/her deposit.

Please don't hesitate to call or email me if you have more questions. Good luck!

Marty Walker
eXp Realty
1 vote
sam.deanj, Home Buyer, Spring Valley, CA
Sun May 11, 2014
You have a LAZY agent. Fire him or her because they aren't representing you in a professional fashion. That demand to sign off on contingencies should have been issued on that 17th day, especially if they had the inspection three weeks prior.

It's very common for buyers agents to become lazy with meeting timelines and it's made easier by lazy sellers agents. If they are serious and want the home then playing hard ball will NOT jeopardize the transaction. They will perform or do a request for repair or credit if they are legit and if they don't you just ended what would have been inevitable anyway. Remember, all this time wasted is time you could have had another prospective buyer.

Have they done any requests for repair or credit towards closing? You didn't have this in your original post. This is imperative and your agent should be on the negotiating table with any issues and asking for your consent to move the process forward.

If you're really upset and frustrated let it be known to your agent. A simple email or call to your agent telling him or her you want to cancel if the process isn't moving forward will be enough to get the ball rolling because you have the right to cancel if they aren't performing and the situation you have is clearly in violation of those.
1 vote
In other words let the message be known to the prospective buyer that you want to cancel. The responses are sometimes enough to get a good laugh. CANCEL? WHAT?

Amazing how the word "CANCEL" will get the ball rolling again.
Flag Sun May 11, 2014
Stephanie Me…, Agent, Schenectady, NY
Sun Dec 22, 2013
If the buyer did not sign off within the 17 days, the contingency remains in place until signed off. So no, the contingency is not cleared. If the buyer backs out of the purchase at this point, with the contingency still in place, they are entitled to their deposit back. If they do not perform and remove the contingency, YOU can choose to cancel, but you would also have to release their deposit back to them; you do not get to keep the deposit if you cancel.

My advice would be to work with the buyer and buyer's agent to find out what the holdup is, and if they really intend to move forward with the purchase. If they do want the house, try to work things out and get the transaction closed. If they don't, move on ASAP. It's very possible that the buyer doesn't even realize that he or she needs to sign off on the contingency.
1 vote
Endre Barath, Agent, Beverly Hills, CA
Sat Jul 13, 2013
This is a great question and timeless until the Purchase Forms are change. Currently the Contingencies have to be removed by the Buyer in writing hence if one has not received a contingency removal the buyer's Earnest Money Deposit is protected should the buyer decide to cancel.

Endre Barath,Jr.
Prudential California Realty
A Berkshire Hathaway Affiliate

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1 vote
What if contingency isn't actively removed AND buyer doesn't cancel and the house closes? What is their recourse? Like a neighborhood review in which buyer wasn't provided the information the contingency required but they didn't cancel the purchase either. Do they have legal recourse later against and HOA?
Flag Thu Jul 2, 2015
Tristam Biel…, Agent, South Pasadena, CA
Tue May 20, 2014
The standard Purchase Agreement used in CA requires "active removal", meaning that the contingency remains in place after the time period (normally 17 days) until it is cleared in writing. Once the 17th day is reached and the contingency is not cleared, you can have your agent draw up and serve a "notice to perform" and get the buyer to resolve ASAP.
0 votes
My NC Homes…, Agent, Chapel Hill, NC
Mon May 19, 2014
Rather than post your question on the Internet, why don't you simply pick up the phone and either speak to your agent or if you lack confidence that they know what their doing call their office and ask to speak to the Broker in Charge and run this by them. I'm not an attorney, but I am a Broker and have worked in a number of states over the years though not in CA. In every state I've worked when a contingency date passes the contingency is deemed to have been satisfied.
0 votes
Mitchell Lub…, Mortgage Broker Or Lender, SHERMAN OAKS, CA
Mon May 19, 2014
First, it is definitely something, which should be handled by your agent, and if she is ignoring you then she is in violation of applicable law. The best way to find about this issue is to read your contract - Purchase Agreement, usually it explains it in a simple manner. As a standard in California, and again it depends on the stipulations negotiated in your Agreement, if the term of condition expired that means that condition is not valid anymore, and any other actions, like Notice to Perform, are not necessary. At that point, this condition is considered to be ”signed-off". My guess is that you are in good shape, and should proceed to the closing of your transaction.
0 votes
Brad Korb, Agent, Burbank, CA
Sat Dec 21, 2013
You need to look at your contract,if it is a standard California Realtor's real estate contract then all contingencies have to be removed in writing,sorry ,good luck !
0 votes
Jason Galardi, Agent, Beverly HIlls, CA
Wed Oct 2, 2013
First off, you are the client and your agent needs to listen to you so I would start with the dialogue about open communication. Your agent has put you in a difficult situation but that is for another time.

The bottom line is (if your contract was a standard contract and no revisions were made to it,) that you need to give a notice to perform. The buyer has 48 hours to act on that notice otherwise the deal is null an void. You might have a case to withhold some monies for damages but that is really a legal question and in all honesty, do you want to go down that road for $10,000? or less?

My advice would be to initiate the notice to perform and see what the reaction is. If they don't release contingencies well then, you didn't have a real buyer in the first place I guess. Get rid of that Realtor and hire someone who is on your side for the next time. You'll probably get more money for your home! hahaha

Call me if you would like to schedule a time for me to talk to you about my services.

P.S. My statement is in opinion and I am not an attorney. You should get legal counsel for any of these matters.

Jason P. Galardi
Multi Million Dollar Listing Agent
Keller Williams Beverly Hills
C 310-980-1256
BRE# 01322753
0 votes
Heather Paul, Agent, Santa Monica, CA
Sun Feb 17, 2013
Your Realtor should be going through all of this in depth with you and I would highly recommend speaking with them about this as they have all the details of your contract. Generally they are not removed until the contingency removal is signed, but again-your agent should be the first one to turn to. If you continue having issues with your Realtor, you can also try to speak with their broker.

Have a great day,
Heather Paul, Realtor
Coldwell Banker
0 votes
Jeri Creson, Agent, Studio City, CA
Sun Feb 17, 2013
This depends on the verbiage in your contract. If you are using the CAR form, and have not modified it in any way to make the contingencies passive, rather than active (the default), then, no, the contingencies are definitely in place unless you have a written document removing them. Don't allow your broker to play around with this…time is of the essence. This is a time to be firm but fair. There were agreements regarding time commitments. If they can't be met, then renegotiate a reasonable solution, or give notice of your intent to rescind the contract and move on. Doing nothing at this point is almost never in your best interest.

Good luck -
0 votes
Donny Opoku, Agent, Ladera Heights, CA
Thu Feb 7, 2013
You need to have a contingency removal agreement signed in order for the contingency to be lifted. Good Luck.
0 votes
Caroline Har…, Agent, Northridge, CA
Thu Feb 7, 2013
Oh I love this question. If you have issued a contingency removal and they have come back and removed all contingencies except for the inspection, they still hold the contingency. If you haven't issued the contingency removal, and they have requested an extension (whether you responded or not, but didn't cancel escrow) they still may hold the contingency. If you issue the notice to perform and they do not agree, they can back out of the deal and keep their deposit within the Notice time frame. If you didn't request a contingency removal and they didn't request an extension of contingencies, then it may be automatically removed (read the contract to see if contingencies are automatically removed- they usually are in CA).

You can feel free to call me to discuss or email me the documents you have so I can explain further.

Caroline Harabedian
RE-Search Concept
8700 Reseda Blvd., Suite 213-B
Northridge, California 91324
(818) 967-9626 mobile
(818) 979-0226 fax
0 votes
Jane Peters, Agent, Los Angeles, CA
Thu Feb 7, 2013
As everyone has said below, that Notice to Perform should have been sent, and if not signed, a cancellation of contract could have been issued. Since the buyer has not signed of on their contingency you are not entitled to keep the deposit, but you should be moving forward one way or another. If this buyer is getting a loan they still have that contingency in place so the fact that they are not removing the inspection contingency would seem suspicious. Also, in this sellers' market I would not worry about finding another, more serious buyer. I would issue a cancellation. Of course they still have to sign it but it might make them move a little quicker.
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0 votes
Cindy Davis, Agent, San Diego, CA
Thu Feb 7, 2013
As others have said, I would send a notice to perform can't assume it's been removed. If your agent isn't performing properly, go to his or her broker. This needs to be addressed promptly.

Best of luck.
0 votes
Janey Bishop, Agent, Encino, CA
Thu Feb 7, 2013
The notice to perform is not a courtesy. Have your agent send the notice and find out what the hold up is. If Buyer doesn't want to proceed find out and move to someone serious. If they don't perform with the notice then you can cancel and move on.
0 votes
carlos parra…, Other Pro, Monrovia, CA
Thu Feb 7, 2013
Your agent needs to send a Notice to perform immediately. That will limit him to 3 more days and then no more.
0 votes
Dorene Slavi…, Agent, Torrance, CA
Thu Feb 7, 2013
Dear Heymjo,

It would be better to complete the purchase since you are so far along in the process and the house has effectively been taken off the market during this time. However, three weeks is much too long to wait for a signature. It does appear that no one really knows what is going on with the buyer you are in the dark and You Need To KNOW!
Have your Agent set up a meeting with the Broker and Buyer Agent and your Listing Agent and get to the bottom of it. Hopefully a clarification of the buyers intent and a Notice to Perform will get your signature for you and your house sold.
0 votes
stephen webb…, Agent, Kirkland, WA
Thu Feb 7, 2013
Good Morning
The inspection Addendum states the time requirements very clear. I have not read the california addendum for years so cannot be specific for you. One thing to keep in mind. Sometimes its better let a reluctant buy off the hook and move back into the market. If you go for their earnest money and they object, the process will tie up the property.
Some of the Inspection Addendums state that if the buyer does not repond as the addendum dictates the addendum and the rights it offers all become mute and all reverts back to the purchase and sale agreement as if the inspection addendum was not written.
But if the lender requires a repair and you will not make that repair the buyer has a clean out.
0 votes
Lena Samigou…, Agent, Los Angeles, CA
Thu Feb 7, 2013
The answer is NO. Unless you have the contingency removal in righting ( meaning signed on the form) the contingency is still there and your buyer can walk away from the deal and keep the deposit. Your agent has to be aggressive in getting the contingency removal from the buyer, giving the buyer Notice to Perform, and if the Buyer doesn't perform within the specified time frame, you can send the Buyer the Cancelation of Agreement. Good luck.
0 votes
Christopher…, , Los Angeles, CA
Thu Feb 7, 2013
Technically it is passed the time period as per the agreement. The buyer has failed to perform on the terms of the contract they agreed to. I would not kill the deal over it, and a deposit is not worth losing a buyer and time over. Send them a notice to perform and then if you don't hear anything after that, then go ahead and proceed with canceling the transaction.
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0 votes
Ron Thomas, Agent, Fresno, CA
Thu Feb 7, 2013
How about giving him a NOTICE TO PERFORM
do not take anything for granted
bend over backwards to accomodate
cover your deriere.
0 votes
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