Legal Lines: September 2019

This month’s legal lines question deals with unilateral extensions.

Question: We have a situation where a contract is expiring  that was contingent on the sale of another home. The contingency home has not closed because the appraisal came in low and they are appealing the appraisal. In the mean time we have another offer that has come to the table as a back up that is a much better offer. The buyer of the first contract is trying to utilize the eight day unilateral extension stating the reason the contingency home has not sold is at no fault of the buyer. Bottom line is the seller wants to let the contract expire and does not think they have a right to the eight day unilateral extension. Both buyers are represented by a co-op broker so it has nothing to do with agent commissions but simply a better deal for the seller. Please advise if the unilateral extension is applicable in this situation.

Answer: If the other property has not yet sold, the contingency has not yet been fulfilled. Therefore, the buyer does not have to purchase the property. However, I do not think the buyer has a unilateral right to extend the contract for eight days. That can only be used in limited circumstances which do not apply here. The reason the buyer is not closing is because the sale of the other property has not yet occurred. The eight day right to unilaterally extend is not a blanket right to extend. It can only be used if there is a title problem, or the lender or closing attorney are not ready.  Again, in this case, the problem is that buyer’s other property has not yet sold.

In our Legal Lines column, we feature a question from GAR’s Legal Helpline each month. Answers to these questions are provided by GAR General Counsel, Seth Weissman. Questions and answers are edited for brevity and clarity. Click here to learn more about our Legal Helpline or to submit a question.