Legal obligation by seller if buyer/lender unable to meet closing date
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Legal obligation by seller if buyer/lender unable to meet closing date
I have a vacant land purchase agreement with no contingencies and a closing date
‘no later than x date’ that has now expired. No agents or attorney involved, no
earnest money taken. Buyers lender set a closing date with closing company for 10
days past contract date even though I stated the current purchase agreement is not
valid as the closing date has expired with buyers, lender and closing company on e-
communication. There has been no formal request to extend the closing date and
the terms if they did want it or how I would be compensated if I accepted. Do I hade
any legal requirements to stay in this? My thought is that the p.a. is no longer valid
and i am not obligated to do anything. Failure to perform on the part of the
lender/buyer as they did not meet the closing date. The default is on their end, not
mine as title was clear, closing company was ready etc. One piece of info is I gave
buyer list of lenders to consider going but buyer made choice of which to actually
engage with, not me.
Asked on July 1, 2017 under Real Estate Law, Minnesota
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
You are correct: if there was a firm closing date and the buyers failed to close by it for *any* reason which was not your fault--including their lender's slowness--the buyer is in default or breach and you may keep their deposit/earnest money and sell to someone else; you may also use their default as leverage to get additional compensation from them, should you choose to go ahead with the sale, though with a history of defaulting, you would be well-advised to have them escrow any such additional money to make sure it is available.
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