June 12th, 2023 at 4:10 pm
Multiple Choice Question: When does the timeframe expire for the buyer’s contingency to review seller documents? Pick the best answer:
A. Day 10.
B. Day 12.
C. It depends on whether Day 10 or Day 12 is a Saturday, Sunday, or legal holiday.
D. Two days after the seller serves a Notice to Buyer to Perform (NBP).
Answer: Answer A is the correct answer! According to paragraph 14B(3) of the RPA, the buyer has until the timeframe specified in paragraph 3L to remove the applicable contingency.
Answer B is wrong. Although the RPA has what we commonly call the “5-Day Rule,” that rule only applies if the seller fails to timely deliver the seller documents (see paragraph 14B(3)). More specifically, the RPA says that, if the seller fails to timely deliver the seller disclosures, the buyer shall have: (1) the timeframe specified in paragraph 3N(1), or (2) 5 days after delivery, whichever is later, to remove the applicable contingency. But in our situation, the seller did not fail to timely deliver the seller documents, and so the 5-Day Rule does not apply.
Answer C is wrong. We do not count Saturdays, Sundays, and legal holidays if they are the last day to perform “an act required by” the RPA (see paragraph 25.I.). But the expiration of the buyer’s timeframe is not the last day to perform “an act required by” the RPA. In fact, the RPA specifically states that, even after the buyer’s contingency period expires, the contingency continues on until the buyer removes the contingency, or the buyer or seller cancels (see paragraph 14B(4)).
Answer D is wrong, but mostly because of semantics. It is true that buyers should generally refrain from removing any contingency until after the seller serves an NBP. It’s also true that the buyer has 2 days after service of an NBP to remove an applicable contingency (see paragraph 14E). However, the Multiple Choice question posed was “when does the timeframe expire,” and not “when must the buyer remove the contingency.”
-Thank You to Clara Eisenman (Tustin Manager) for suggesting this week’s legal tip!
Like what you see here? Sign up for more! Our free e-newsletter informs you of listings in your community, insider real estate tips, the latest in home trends, and more.
