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Counting Days and Loopholes in CAR Real Estate Purchase Agreement Forms

On Behalf of | Oct 13, 2016 | Civil Procedure, Contracts, Real Estate |


A common question is how to count the days referred to in the Real Estate Purchase Agreement and related CAR (Calif. Assoc. of Real Estate) forms.  In October 2016 CAR published a concise article on this in their magazine.  In essence the CAR attorneys confirmed that every day counts, even holidays, but if the last day is a weekend or holiday, then the next business day would be the last day.  That confirms with Code of Civil Procedure §12.  More specific examples how to apply this are as follows and are in this great article and summarized below.  See page 10 at http://www.onlinedigitalpubs.com/publication/?i=341167#{%22issue_id%22:341167,%22page%22:10}

RULE NO. 1: “Acceptance” requires the return and personal receipt of the signed offer back to the offeror.  “Acceptance” in the RPA-CA is the day when the offer (or counter offer) is accepted in writing and then delivered back and “personally received” by the other party. Only when this occurs is there a binding contract.  It is from that day that the contingencies and other further dates are calculated.  Note, there is no requirement for a separate written “Confirmation of Acceptance” to be provided.

Loophole No. 1:  The “personal receipt” must be by the actual seller or buyer UNLESS the party’s (actual seller/buyer) put the NAME of his agent into the blank space above the party’s signature in paragraph 31 (for a buyer) of the RPA-CA.  You will see each form has a place for the agent’s name.  So choose to include the agent or not to make a binding agreement.  –> Loophole No. 2: Note the multiple counter offer form is different ad it reserves the right of the seller (not agent) to have the final say as to if a binding agreement is created.

RULE NO. 2: Count every day. In all of the C.A.R. purchase agreements, “days” mean calendar days .

Loophole No. 3: The RPA-CA provides for delivery of disclosures within 7 days and that includes all holidays, no extensions to an 8th or 9th day if there is a weekend or holiday.

Loophole No 4:  Deposits must be placed into escrow exactly as stated in the RPA, e.g. if 3 business days, however, if the last day is a weekend/holiday, then an extension to the next business day is provided.  (Follows CCP §12)

RULE NO. 2: Count every day. In all of the C.A.R. purchase agreements, “days” mean calendar days.  As in above, only if the last day is a non business day is the time to act the next business day.

Loophole No. 5:   Offer and Counter Offers are NOT bound to this next business day extension rule.  The Same applies if possession after closing is on a weekend, the seller must vacate and deliver possession even on the weekend!

RULE NO. 3 –> Notice to Buyer to Perform:  In counting the Notice to Buyer to Perform (NBP), the day it is personally
received is counted as day zero. The very next day is day one.  In other words, the counting begins at the next full calendar day.  This is also consistent with the Code of Civil Procedure.

–> Note If buyer/seller’s agent’s name is in the box on the last page of the contract, then delivery to count the days is from delivery to the agent.

Strategy Hint: The new CAR form Delivery of Notices Addendum (Form DNA)  allows receipt of a Notice to Buyer to Perform or Demand to Close Escrow to be effective upon mail or email depending which box you select.

Strategy Hint: When can Notice to Buyer to Perform be given?  The RPA says the NBP cannot be given more than 2 days before expiration of the applicable time.  This allows the NBP to be given in advance, so you do NOT need to wait until the breach occurs!  Further, this two day issue is not extended by any weekend or holiday!

Hint How Many Days to Provide by Default? See Page 9 of the RPA-CA under “Definitions”.