[WSBARP] When is closing?

Tue Dec 1 16:36:47 PST 2020

Whatever happened to "There is no late in Real Estate!"?  If the 
transaction doesn't close on the closing date, and there's no clause 
extending closing in the event of failure to record due to no fault of 
either party, how can you force either side to proceed to closing?

Kary L. Krismer
206 723-2148

On 12/1/2020 4:30 PM, Inge Fordham wrote:
>
> Rich,
>
> It seems that S and B have a binding contract in which B agreed to 
> accept the property AS-IS. There may also be a clause that required S 
> to maintain the property in its current condition until closing.  The 
> standard Form 21 RREPSA contains the following language at paragraph 
> f, Closing and Possession:
>
> There could be an argument over whether a weather event constitutes 
> “normal wear and tear,” but if this language was included in the PSA, 
> S may have an obligation to return the property to the condition it 
> was in when the parties reached a mutual agreement.  Absent that 
> language, or if the PSA is clear that the property is being sold AS-IS 
> no matter what the conditions (which could change between mutual 
> acceptance and closing), I don’t believe S would. Have any obligation 
> to perform repairs.
>
> I don’t believe that the fact the transaction did not close on Day 1 
> (absent any fault on the party of S or B) provides sufficient grounds 
> for rescission or to void the transaction.  If the transaction failed 
> to close due to the negligence of S or B (i.e., one of the parties 
> signed late), then my analysis would change.  Assuming all docs were 
> signed and ready to record on Day 1, I believe the title company may 
> have some liability for its role in failing to record the documents on 
> the instructed date.
>
> My two cents, for whatever it’s worth.
>
> Best regards,
>
> uc%3fexport=download&id=1W3rEcChy0_E0cCfV5up02mkhwnL6eWIs&revid=0B4P5JoIHdbFaR29EbHlRWHFseFV5STZpSUVGeUNPWldkVDFVPQ
>
> 	
>
> *Inge A. Fordham | Attorney***
>
> Fordham Law, PLLC
>
> 3218 Sixth Avenue | Tacoma, WA 98406
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> *From: *<wsbarp-bounces at lists.wsbarppt.com> on behalf of Rich Holland 
> <rich at pnwle.com>
> *Reply-To: *WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> *Date: *Tuesday, December 1, 2020 at 11:57 AM
> *To: *WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> *Subject: *[WSBARP] When is closing?
>
> Interesting fact pattern – almost exam like – from an out of state 
> colleague:
>
> PSA says property is AS IS, with all faults, etc.  Seller will not 
> repair, knows nothing of the property.  Buyer agrees.
>
> Closing is set for Day 1 (just for simplicity).
>
> Day 1     Escrow has Buyer and Seller docs, funds, etc. and sends docs 
> out to record.
>
> Day 2     Title receives but does not record documents due to cut off.
>
> Day 3     County is closed
>
> That night, massive windstorm comes and does significant damage to the 
> deck on the property
>
> Day 4     Buyer’s agent contacts Title and forbids them from recording 
> transaction
>
>                 Seller claims transaction is already closed and 
> recording is ministerial and property is AS IS anyway
>
> Day 5     Buyer’s agent still blocking title and states that Buyer’s 
> insurance refused claim because Buyer wasn’t the owner on the date of 
> the storm.
>
> Now, I have a number of thoughts about this but was curious about the 
> collective wisdom.  Clearly, to me, if one removed the escrow company 
> from the equation, ownership transferred on day 1 when S gave B the 
> deed and B gave S the funds.  Recording has to do with notice; not 
> effectiveness of a transfer.  I wonder, therefore, whether that is 
> changed because of the neutral third party.  This also reminds me of 
> the recent thread on here about when Closing actually occurs. To me, B 
> has no real claim against S regardless of Closing. Either it was 
> already B’s or B had already contracted to purchase the property AS 
> IS.  To be clear, I am not given to understand that the Buyer wants 
> rescission or to cancel the transaction (depending on the 
> interpretation of when closing occurs), but, of course, wants S to 
> replace the deck which, of course, S is not going to do for B or anyone.
>
> I am curious of your thoughts on this.  Was the transaction closed?  
> Did the title company do the right thing by refusing to record?  Does 
> the S have some sort of claim against B since S remains the listed 
> owner with the County for taxes etc.?  Given the incredible 
> oversimplification and understanding that it depends on what the 
> contract actually says, does B have a legitimate claim to halt the 
> title company when S has already delivered the deed? And, for that 
> matter, when is “delivery” from S to B when an escrow is involved?
>
> Suffice to say, I responded with more questions than answers.
>
> Sincerely,
>
> Richard L. Holland
>
> WSBA#23921
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