Need Help: Changing Closing Date at last minute

10 Replies

Hello BP Community -

Need your suggestion here

One week before closing the seller came back saying he wants to push the closing date by 4 weeks. What this means my future tenant has to wait for 4 weeks and also the my property is not making money and I have to wait because of the seller.

What are the options I have to go back to seller

1. I understand walking out would be one of the solution, but do not want to do that as I like the property.

2. I can ask my future tenant if thats okay to wait.

Should seller be reimbursing me any costs associated, or what are the options I have?

Unless the contract gives the seller the unilateral right to postpone closing, you can always say no and be prepared to close on the original date.

The reason you have a contract is so the rights and obligations of all parties will be spelled out. Refer to your contract for the right of the seller to move the closing date. If you don't understand the contract language (and you certainly should), then seek the advice of legal counsel. 

@Dan Mackin - Looks like the current tenant is unable to move out and is asking for more time which seller got informed today and wants to push closing date

@Guy Gimenez - On looking at the contract closely, it only says if there is a default and any of parties fail to complete the settlement, the defaulting party will assume all the legal costs. It does not mention anything specific to closing dates.

Even if the contract does not give the unilateral right to seller, I can say no and would proceed with closing. But if the current tenant has not moved out, it is still a problem which needs to be solved. Looks like the seller has more flexibility than the buyer during property closing..

Originally posted by @Nilesh Makhija :

@Dan Mackin - Looks like the current tenant is unable to move out and is asking for more time which seller got informed today and wants to push closing date

@Guy Gimenez - On looking at the contract closely, it only says if there is a default and any of parties fail to complete the settlement, the defaulting party will assume all the legal costs. It does not mention anything specific to closing dates.

Even if the contract does not give the unilateral right to seller, I can say no and would proceed with closing. But if the current tenant has not moved out, it is still a problem which needs to be solved. Looks like the seller has more flexibility than the buyer during property closing..

 It sounds like in this case, somebody is homeless for a month.  Either your tenant or the current tenant.  I don't think it *must* be your tenant.  You can tell the seller No, but then his tenant will have to be evicted if the denial of a longer closing date doesn't force them to move, even if it is into a temporary situation like a hotel.

If your tenant has some flexibility, I'd go ahead and agree to this, but demand some concessions if your market will allow it.  If your tenant doesn't have any flexibility, then the concessions you get from the seller will probably need to go to some temporary housing for your tenant for a month or you'll need to break your contract with them.

It sounds like two families need housing for a month - this doesn't have to be the end of the contract, but I think that somehow the 4 folks involved - the two families, you and the seller, should be able to hash out something workable.

@Nilesh Makhija

If a closing date is described in the contract, then the wording in the paragraph regarding the closing date will let you know the rights of a party to change a closing date...but unless you're using a seller (or seller's attorney) drafted contract, I doubt one party to the agreement can decide they want to change the closing date without incurring liabilities. 

Bottom line is this.  No one here has seen or read your contract so your best bet is to contact an attorney and provide him/her a copy of the agreement so they can tell you with more certainty what rights YOU have to stop such an action by the seller.

@Linda Weygant - The situation you laid down is completely accurate. I am trying to work with both the families and trying to make sure it works for all. But as you not everyone thinks mutually and dont care as much as others.

@Guy Gimenez - One of the investors suggested we can add a delay closing clause contract which says each day you delay closing it $100 penalty, which I think makes sense and is a lesson learned. (do not have anything similar like this in my contract). 

A good deal is only good if the contract relating to the deal is properly drafted.  I suggest you get very familiar with contracts and contract law for your state. As you can see, a little bit of knowledge on these matters can leave you highly exposed. I don't want to leave anything to chance on my deals, so my contracts are buttoned up very well. Then, when the other party states they are going to do something, I simply explain the section of the contract that shows they will NOT do it without my written approval. 

I personally would rather the seller deal with a departing tenant than me having to once I own it. However, for a considerable closing date change I'd ask for something in return and see what they say (reduced price or closing cost credit). 

@Chris Bounds - The seller agreed to give $500 for closing credit which I think is okay for this transaction. And yes I have the similar opinion dealing with current tenant is seller's responsibility and as a buyer we had asked for vacant possesion

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