It’s that time of year again when we are going to have legal holidays in rapid succession! So it’s also a good time to double-check that you know how to handle the various timing issues for Notices to Buyer to Perform (NBP).

Multiple Choice Question: Let’s say that a seller and buyer have entered into a C.A.R. Residential Purchase Agreement (RPA). The seller properly serves the buyer with a 2-day NBP to remove applicable contingencies. Which one of the following statements is false? Pick the best answer:

A. The seller can serve the NBP on a legal holiday.
B. Before service of the NBP, the buyer’s 17-day contingency period can end on a legal holiday.
C. After service of a 2-day NBP, if the last day for the buyer to remove contingencies falls on a legal holiday, the buyer can wait until the next business day to remove such contingencies.
D. A seller cannot cancel on a legal holiday.
E. None of the above. 

Answer: Answer A is a true statement, so it’s not the correct answer. A seller can serve an NBP on any calendar day, as long as service is not more than “2 Days” before the end of the buyer’s contingency period (see paragraph 14E of the RPA). That capitalized word, “Days,” is specifically defined in the RPA as “calendar days” (see paragraph 25J), so it includes Saturdays, Sundays, and legal holidays.

Answer B is a true statement, so it’s also not the correct answer. Before a seller serves an NBP, the buyer’s “17 Day” contingency period is just a straight 17-day timeframe. Again, a “Day” is specifically defined as a calendar day (see paragraph 25J of the RPA), so the last day can fall on a Saturday, Sunday, or legal holiday.

Answer C is also a true statement, and not the correct answer. After a seller serves an NBP, the buyer has only 2 days to remove contingencies or face cancellation (see paragraph 14E). It is precisely the service of the NBP that transforms the buyer’s removal of contingencies into an “act required by the Agreement.” Under the RPA, if performance of an “act required by the Agreement” falls on a Saturday, Sunday, or legal holiday, the contractual party’s performance is excused until the next business day (see paragraph 25.I.).

Answer D is a false statement, and so it’s the correct answer! A seller can cancel on a legal holiday. As stated above, we only exclude Saturdays, Sundays, and legal holidays for performance of an “act required by the Agreement.” But if a seller serves an NBP, and the buyer misses the deadline to remove contingencies, the seller may have the right to cancel, but the seller’s cancellation is not an “act required by the Agreement.” Hence, the seller can cancel on a Saturday, Sunday, or legal holiday.

As an example, let’s say that a seller properly serves an NBP to give the buyer a deadline until Thursday, November 10, 2022, at 11:59 p.m. to remove contingencies. The buyer misses that deadline. The seller can cancel on Friday, November 11, 2022, at 12:00:01 a.m., even though that particular day is Veterans Day, which is a legal holiday. The reason the seller can cancel on a legal holiday is because the seller’s cancellation is not an “act required by the Agreement.”

Copyright© 2022 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of November 7, 2022. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals. Written by Stella Ling, Esq.