Removing conditions on time
You know that saying “time is of the essence”? Well in real estate, it really truly is. The purchase contract has strict timelines that must be followed – literally to the minute – in order for the transaction to remain “alive”. One missed step and the contract ends.
Timing is particularly important when it comes to the removal of conditions, as most purchase contracts include at least one. The standard residential agreement requires a condition to be removed “in writing” on or before 9pm on the Condition Date in order to be valid.
The buyer and seller can agree to extend a deadline by both parties signing an amendment to the contract, providing its signed before the expiry of the condition. But why would a party not agree to an amendment to keep the deal together? Here are just a few reasons:
- The buyer may not want to complete the transaction and instead of signing a non-waiver of conditions – which is a courtesy – allows the deadline to remove the condition(s) to lapse, collapsing the sale.
- The seller might have another, better offer in the wings and is hoping the buyer can’t or doesn’t remove their conditions on time, leaving them open to pursuing the waiting offer.
In both cases, getting a mutual release signed as soon as possible after the condition lapse is recommended to avoid any confusion of on-going contractual obligations by either party.
There are also situations where the contract has ended because a condition was not removed and the parties still want to continue the transaction. It is not possible to amend or “revive” a contract after it has collapsed without significant and complicated modifications to the original purchase contract, so what do you do in this case? The Real Estate Council of Alberta (RECA), the real estate licensing and regulator in Alberta, suggests simply – write a new contract. It’s the cleanest, safest way to protect both parties.
Another one of the many reasons to have a professional, like me, on your side every step of your real estate journey. My 30+ years of full-time experience has given me invaluable insights to the perils and pitfalls that can affect a transaction and I’m ready to anticipate each one for you. Visit me on Facebook and Google!