I’m Ready to Close But The Other Party Is Not Ready: Sending a Time of The Essence Letter May 22, 2009
A contract of sale must contain a closing date. Once the date has passed and you want to close and the other side doesn’t what to an you do to get a closing date? If the contract allows have your attorney send a TIME OF THE ESSENCE letter to demand a closing. If the other side does not respond and close you can declare the contract breached and seek damages.
Being a real estate attorney in Staten Island sometimes I am approached with the following question: “My contract date has passed and I want to close. How can I force the other party to close?”
The contract should detail what actions (or omissions) will cause an event of default. When a party breaks the contract (event of default) it triggers rights including cancellation of the contract and/or a suit for monetary damages. Missing the closing date by an unreasonable amount of time can be cause for seeking to declare a default. When a default is declared it is good practice to put the other party on notice that a default is being declared so that you can enforce your rights to cancel the contract and start a lawsuit. Most NY contracts have a closing date clause which is written “ON OR ABOUT” date. This is a target date and allows either party to wait a reasonable time after the date before being obligated to close. REASONABLE is always a term of art but most case law calls for a minimum of 30 days after the ON OR ABOUT date. If it gets beyond the reasonable (30 day) mark and you want to close you must give the other side notice of your intention to force a closing. This is done by sending a Time of the Essence (TOE) letter demanding a closing date upon the threat of a default. If the party receiving the TOE letter fails to close a default can be declared.
You must first make sure a reasonable amount of time has passed and then send a Time of the Essence letter. This will force the other side to respond and if their response is not what you want be prepared to declare a default and enforce your contract rights.
Steven Decker is a New York Personal Injury attorney specializing in New York real estate law , New York business law, and New York franchise law. You can visit his Law Firm Decker, Decker, Dito and Internicola website by clicking here, download his FREE New York Car Insurance book, or call him at 718-979-4300 or 1-800-310-5520 for a free case analysis.
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