TIME IS OF THE ESSENCE EXPLAINED
July 5, 2017 | Richard Sites
What is “Time is of the Essence”?
“Time is of the Essence” is a phrase found in Florida real estate contracts, specifically those standard FAR-BAR contracts used in residential home sales and purchases.
Without getting into the legalities of real estate basically this phrase means that time periods and specific dates are contractual obligations on the part of both buyers and sellers.
In other states, particularly New York, contracts may not contain the “Time is of the Essence” clause which in those areas gives the parties to the deal flexibility. But not in Florida.
Why is it Important?
When Time is of the Essence both parties are obligated to perform certain things by certain dates or times.
If the parties fail to perform under the terms of the contract by these specific dates, they are technically in default of the contract and there could be legal or financial consequences as a result.
In practical terms, if both parties wish to continue the deal it can move forward but once one of the parties is in default the deal could fall apart.
This is especially true when one party is looking for a way to get out of the deal.
Here’s an example: Seller accepts an offer containing a financing contingency. In other words, buyer must provide mortgage approval by a certain date.
In the meantime, another offer surfaces at a higher price that the seller would like to accept.
If the buyer fails to get the necessary approval by the contractual approval date, the seller could cancel the deal and accept offer #2.
There are some legal technicalities involved that a Florida real estate attorney could interpret and this is just one reason having an attorney oversee your deal is a smart idea.
What Role Can an Attorney Play in Your Deal?
I always recommend clients use a Florida real estate attorney. Using your attorney “back home in Jersey” is not a good idea since real estate laws differ from state to state.
When buying or selling in Florida you should use a good, Florida real estate attorney.
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If you would like to have a conversation about meeting your real estate goals contact me at 561-762-4073. And be sure to visit My You Tube Channel where there are over 400 videos on Jupiter real estate and the Coastal Florida lifestyle.