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We are in Florida, USA.

We accepted a contract for our home, with a closing date of August 18. A couple of weeks after the contract was signed, the buyers requested a new closing date of August 11 (verbal through our agents). We agreed.

  • August 10, we had our house packed on a truck by a moving company.
  • August 11-am, we find out there's a delay on the buyer's end
  • August 11-pm, we find out they can't close that day due to complication in the selling of their condo
  • August 13, we're informed they're going to close their condo that they're selling the next day
  • August 14, we find out they're not able to close again but are on track to close the morning of the 15th
  • August 15, we find out there's actually something really wrong in their paperwork for the condo, and they likely can't close at all this week (missing even the original date of the 18th)

The reason, we're finally told, that they haven't been able to close is because someone at their title or lender company failed to file the proper paperwork, thus delaying the entire process.

What this has meant for us:

  • We've been charged an additional $2,000 in moving fees from the moving company (since our entire house is now packed in a warehouse somewhere, with no delivery in sight)
  • We've had to eat out every meal, every day, because at any moment we could get a call that they're closing and want to do a final walk-through
  • We've had to sleep on the floor for going on a week (including our two toddlers)
    • We've had to buy clothes for the whole family since we only kept 2 days worth
  • We can't close on our new home yet, which is in a different county, resulting in a 45 minute drive to and from a new school for our 5 year old who just started Kindergarten (and a 1.5 hour drive each way to and from work because of this).

We're panicking. We don't know what to do now. Our daughter just started a new school, and loves it, but we don't even have a house near the school yet. We don't know if we can or should even try to close on this house still. We can't afford to keep our house stored though... the total moving cost has already doubled from what was originally planned.

Do we have any legal recourse here if the closing doesn't happen by the contracted date? Can we take action against whatever company it is that delayed the process of their condo selling? Even if we do, wouldn't it probably mean the buyers would back out, resulting in even more heartache because we'd have to unpack our house, relist it, withdraw our daughter from one school and enroll her in another... it's really just a nightmare.

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    I'm curious, why haven't you been able to close on your new place? And aren't you delaying the seller of that place by not closing? – mikeazo Aug 15 '17 at 20:11
  • It's a new construction, so no one is living in it. We haven't closed because the proceeds from our current home will be the down payment on our new home. – MrDuk Aug 15 '17 at 20:12
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    You could look into a bridge loan in order to close on the new place. But that could be risky. Do you have a realtor who is helping you? Unfortunately, it has been my experience that dates on real estate contracts are fluid unless one side or the other puts their foot down. Your agent (if you have one) should be able to help you know your options (which include relisting the home and finding a new buyer, negotiating some compensation from the current buyer). – mikeazo Aug 15 '17 at 20:16
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Let me start by saying that real estate contracts are some of the most heavily regulated contracts and details vary enormously by jurisdiction. That said ...

To vary a contract, the contract must actually contain provisions that allow for it to be varied and variations must be in accordance with those. These sorts of clauses are common in long-term contracts (building, mining, logistics etc) but are less common (but not unknown) in transactional contracts like real estate sales.

If the contract does not contain such provisions then it can only be varied by a collateral contract which has the same basic requirements of any contract - in this particular case, were you offered something in return for agreeing to delay settlement? If you weren't you do not have a collateral contract that varies the original contract.

Notwithstanding, even though the other party delaying settlement from the 11th to the 18th is a breach of the contract by them, by agreeing to it you would be prevented from enforcing your rights under the contract by the doctrine of promissory estoppel. This presumes that they actually settle by the 18th - if they don't all bets are off and you can enforce the rights you have from their breach by failing to settle on or before the 11th - just don't agree to any more extensions.

What you remedies are will be detailed in the contract. These would normally include issuing a notice for them to settle by a given date - if they don't do that you can terminate the contract and keep the deposit. You could also sue for damages. Don't do any of this (or anything else) without getting legal advice first.

Edit

The OP has put in a comment a rather vital piece of information: there is a clause making settlement contingent on the buyer selling their condo.

If the delay is in accordance with that clause then the vendor is stuck, even if settlement takes 10 years.

  • Thanks Dale, quick question for you -- what sort of legal actions are there for someone missing a closing date? Say if they aren't able to close on the 18th, what can we do? And I thought the initial deposit went to the lender -- but you're saying that would be sent to us? – MrDuk Aug 16 '17 at 14:45
  • I should note that they have a contingency in the contract for the sale of their condo. – MrDuk Aug 16 '17 at 15:02
  • "If the delay is in accordance with that clause then the vendor is stuck, even if settlement takes 10 years." -- The verbiage around this clause is almost always accompanied with a closing date of the contingency property. "Contingent on sale of -blah blah-, on or before <date>" – MrDuk Aug 17 '17 at 14:21
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In agreeing to the modifications of the contract, and not specifying any compensation or other conditions, you have no options. At the point where a buyer seeks to change the terms of the contract (e.g. they offer to make the new closing date be something later), the seller can just refuse, accept, or counter-offer. For example, if you can anticipate expenses from the delay, you can require compensation up to some limit; you can change the selling price (though that would only work if they have a cash cushion). These contracts typically have a clause that says that the buyer's purchase of the house in dependent on their being able to sell their existing home. Another option would have been to have your move-out be some number of days after closing. Ultimately, the best option is to have retained a real estate lawyer to guide you through the process, and advise you of the risks that you were taking.

However, there are some factual details that are unclear. With real estate contracts, verbal modifications to the contract are not a good idea. If you accept a modified contract changing the date from the 18th to the 11th, that becomes the new contract. The other party cannot just "cancel" that change. So unless you also accept their cancellation and it is absolutely completely totally understood that the new date is the 18th (i.e. what it was originally), their "cancellation" is without effect. Common sense says that when they say "we're cancelling the modification", they are implying "and we want the new contractual closing date to be the 18th", but unless they actually assert that, they could also mean "we'd like it to be whenever we can get our condo sold".

If you did not accept their "cancellation", then they would be in breach of the contract. You may have some options in that case (which you should discuss with your attorney: it's okay to also talk to your agent, but do not assume that real estate agents are totally on top of things w.r.t. law). The main leverage you have is the (threat of) cancellation of the sale, and perhaps forfeiture of their earnest money. The exact options should be discussed with your attorney (at the risk of being repetitive). Your agent, on the other hand, would be best able to inform you of the value of a bird in the hand.

  • To be clear, we agreed to move the closing from the 18th to the 11th -- we never agreed to continuously push out the closing date, a day at a time after the 11th was canceled (by them). – MrDuk Aug 15 '17 at 20:11
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    Your agents and your attorney should be advising you about your options to insist upon immediate closing, as originally agreed ("time is of the essence") and they can offer to pay your hotel and storage bills if they cannot conform to their contractual obligations. – Upnorth Aug 15 '17 at 20:47
  • Sure but this is just more of a curiosity thing right now - we don't plan on taking legal action immediately, if we can help it. I'm wondering though, if they had the contingency in their contract to sell their condo, it sounds like if they can't close on the contracted date because of the condo not selling, we actually may not have any legal grounds. – MrDuk Aug 16 '17 at 14:52

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