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Time is of the essence for real estate deals

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  • Time is of the essence for real estate deals

    Have any of you ever seen a buyer send out a time of the essence letter to the seller? Usually it's the other way around, a buyer is dilly dallying and trying to get out of the deal and the seller has to send this TOE letter threatening them to close.

    I've only seen it once a year or so ago. Essentially the buyer was angry because he felt that the listing agent had materially misrepresented facts about one of the major appliances. However, any misrepresentations were made verbally so there was no way to prove any of this.

    However, on the day of closing the buyer found a few minor glitches with some other appliances which technically allowed him to delay the closing because per standard coop and condo contracts appliances must be delivered in working order.

    Here's the kicker. One of the minor issues was a kitchen ventilation system that we found out was for decorative purposes only, and did not actually vent. So technically it's not in working order, and definitely not in good working order as the contract rider dictated (a bit of a sly change added by buyer's attorney).

    So basically the buyer could then send a time is of the essence letter to the seller because the closing didn't happen, and the seller most likely won't be able to get the vent installed within the 30 day time frame. Especially if there are holidays, and you need to get coop or condo board approval. And because the seller most likely won't be able to get it done in time, the buyer would then have a right to cancel the contract and walk away with his or her deposit. That's a terrifying prospect for the seller especially if the market has weakened.

    Just curious if anyone else has encountered this very interesting, and very heavy handed tactic. Thanks!

    What is time is of the essence as it relates to real estate transactions? What happens in practice for re-sales vs new construction deals in NYC? We’ll explain what buyers and sellers need to know about the time is of the essence clause and show you a sample sponsor closing notice with time is of the essence language.

  • #2
    If it was for "decorative purposes only" then it was in "working order". It is supposed to sit there and look pretty, and that's exactly what it was doing. Unless the contract represented that it was a functioning vent, but that is very rare to see in NY contracts.