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<p>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?<br>
</p>
<pre class="moz-signature" cols="72">Kary L. Krismer
206 723-2148</pre>
<div class="moz-cite-prefix">On 12/1/2020 4:30 PM, Inge Fordham
wrote:<br>
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<p class="MsoNormal">Rich,<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">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:<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
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<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">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.
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">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. <o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">My two cents, for whatever it’s worth.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Best regards,<o:p></o:p></p>
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<p class="MsoNormal"
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style="font-size:13.0pt;font-family:"Cambria",serif;color:#203864">Inge
A. Fordham | Attorney</span></b><b><span
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<p class="MsoNormal" style="margin-bottom:3.0pt"><span
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Law, PLLC<o:p></o:p></span></p>
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Sixth Avenue | Tacoma, WA 98406<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><b><span
style="font-size:12.0pt;color:black">From: </span></b><span
style="font-size:12.0pt;color:black"><a class="moz-txt-link-rfc2396E" href="mailto:wsbarp-bounces@lists.wsbarppt.com"><wsbarp-bounces@lists.wsbarppt.com></a>
on behalf of Rich Holland <a class="moz-txt-link-rfc2396E" href="mailto:rich@pnwle.com"><rich@pnwle.com></a><br>
<b>Reply-To: </b>WSBA Real Property Listserv
<a class="moz-txt-link-rfc2396E" href="mailto:wsbarp@lists.wsbarppt.com"><wsbarp@lists.wsbarppt.com></a><br>
<b>Date: </b>Tuesday, December 1, 2020 at 11:57 AM<br>
<b>To: </b>WSBA Real Property Listserv
<a class="moz-txt-link-rfc2396E" href="mailto:wsbarp@lists.wsbarppt.com"><wsbarp@lists.wsbarppt.com></a><br>
<b>Subject: </b>[WSBARP] When is closing?<o:p></o:p></span></p>
</div>
<div>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<p class="MsoNormal">Interesting fact pattern – almost exam like
– from an out of state colleague:<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">PSA says property is AS IS, with all
faults, etc. Seller will not repair, knows nothing of the
property. Buyer agrees.<o:p></o:p></p>
<p class="MsoNormal">Closing is set for Day 1 (just for
simplicity). <o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">Day 1 Escrow has Buyer and Seller docs,
funds, etc. and sends docs out to record.<o:p></o:p></p>
<p class="MsoNormal">Day 2 Title receives but does not
record documents due to cut off.<o:p></o:p></p>
<p class="MsoNormal">Day 3 County is closed<o:p></o:p></p>
<p class="MsoNormal" style="text-indent:.5in">That night,
massive windstorm comes and does significant damage to the
deck on the property<o:p></o:p></p>
<p class="MsoNormal">Day 4 Buyer’s agent contacts Title and
forbids them from recording transaction<o:p></o:p></p>
<p class="MsoNormal"> Seller claims transaction
is already closed and recording is ministerial and property is
AS IS anyway<o:p></o:p></p>
<p class="MsoNormal">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.<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">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.
<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">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? <o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">Suffice to say, I responded with more
questions than answers.<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">Sincerely,<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">Richard L. Holland<o:p></o:p></p>
<p class="MsoNormal">WSBA#23921<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
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