By Elliott Topkins, Esquire
4/28/11
I never really have viewed myself as an enabler. When I have friends or family with problems with alcohol or drugs, I have either helped with an intervention or conducted my own behavior so not as to tempt or encourage. I have never been as against anything in my life as much as domestic violence, and I would do anything in my power to curtail it even if it presented physical risks to me.

So why, you may ask, do I place an article in my standard purchase and sale agreement which states that “the closing is scheduled for June 15, 2011, but if the buyer through no fault of their own is unable to close on that date, because the buyer’s lender is not prepared to close on that date, the closing may be extended, without penalty or additional cost to the buyer, for a period not to exceed seven (7) days”?

We all know lenders read purchase and sale agreements. We know that they will often ask for corrections and additions that rarely make sense, but the Golden Rule (the lender having the gold) applies, and we comply with even the silliest requests. Doesn’t placing one of these provisions in the purchase and sale agreement just enable the lender to close pretty much “whenever they please”? Is this fair to a seller who believes that he or she has a “hard” closing date? Realistically, is it fair to a buyer who cannot know for certain whether the closing date in the purchase and sale agreement is, in fact, the date the transaction will close?

Unfortunately, I have recently been placed in situations like this without this provision, and it is uncomfortable. Without any license, the lender notifies all parties that the closing cannot take place on the closing date set forth in the purchase and sale agreement. chaos breaks loose. Neither side really knows what to do. Technically, in a state like Massachusetts, where we believe in “time is of the essence”, the buyer is in breach. Let’s assume that is the case. Does any lawyer representing a seller really believe that the seller can retain the deposit if the closing takes place two or three days late? I, who have been practicing law in Massachusetts for more than 40 years, have never seen that happen. So, the parties work something out; usually along the lines of the buyer’s paying PITI (principal, interest, taxes and insurance) for the short period in question. From an attorney’s point of view, it is better to work things out in advance. For a buyer (or seller), giving the lender the extra time is like committing “hari-kari.”

For your information, many times the seller will not agree to this “deal with the devil.” In the end, it hardly matters, because the parties will need to work out an “ad hoc” solution to achieve their desired ends. Setting the practical course in advance seems like the better way to handle this all too often recurring situation.

(Mr. Topkins is an attorney with Topkins & Bevans, Braintree Executive Park, 150 Grossman Dr., Braintree, MA 02184. His blog can be found at http://realtorsresourceblog.com. His e-mail address is etopkins@topbev.com.)