First of all, there is a Second Requisition date. For some reason, not everyone truly appreciated this fact.
The date that is inserted is for the title search. Then, there’s a second date, for non-title searches.
All non-title searches include the work orders, deficiency notices etc. and they all have the same time period associated with the offer. This clause is a little confusing when calculating the date the non-title search completion.
Here’s how you calculate that date.
Let’s say the Offer is accepted, September 28, 202x. You have the offer conditional on financing until October 3, 202x. You have a closing date of November 30, 202x and in the Title Search Clause you insert November 10, 2016 as the requisition date.
The lawyer must complete the title search by November 10, 202x (look at what is registered on title – e.g., confirm who the owner is, liens/mortgages registered, easements, restrictive covenants etc.).
The non-title search time period is established by calculating which of the following dates (either #1 or #2) is the earliest:
1. In this section, it will be which of the following is later:
a) 30 days from the Requisition date (November 10) or
b) 30 days from when conditions are removed (let’s say October 3)
So for this section, the later date is November 10 – so 30 days from November 10 would be December 10, 202x
2. This section is 5 days before closing – Closing is November 30th, so this date would be November 25, 202x
Since you must use the earliest of the two, that would be November 25, 202x in order to do the non-title searches (Note that the other date of December 10, 202x is after the closing date – that’s why you take the earlier of the two).
Be careful how you read this, here’s what it says.
Until the earlier of:
- 30 days from the later of :
- the requisition date or
- the date on which the conditions in this Agreement are fulfilled or otherwise waived, or
- Five days prior to completion.
Let’s have another look at the calculations:
Until the earlier of:
- 30 days from the later of :
- the requisition date or (this is 10 Nov)
- the date on which the conditions in this Agreement are fulfilled or otherwise waived, or (3 October)
The later date of the two would be 10 November.
30 days after that would be 10 November plus 30 or 10 December
That’s actually after the closing.
The next section moves the requisition period into a relevant time.
Five days prior to completion. (completion is 30 November) five days prior is 25 November
The earlier of the two dates, namely 10 December and 25 November is 25 November.
This is a somewhat difficult calculation since you have to keep in mind both the “earlier” and the “later” at the same time.
Brian Madigan LL.B., Broker
Comments 2
I’m so glad I came across this! I’m in a situation where the second requisition date matters (a lot) and this is exactly how I interpreted that section of the sales agreement. I’ve since found out that most people (a lot of lawyers included) only consider the one requisition date for the title search and expect that date also applies to any objections related to off-title searches for work orders against a house and such.
I do wish the standard sales agreement wasn’t written using such unnecessarily complicated language. For a contract that facilitates one of the biggest purchases (and/or sales) in a person’s life, it really should be very clear and written in plain language that a grade 9 student could understand without explanation (considered by some to be the level the average adult reads at). Meanwhile, buyers, sellers, realtors, and lawyers sometimes find themselves getting tripped up by different interpretations of this section (and others), sometimes with disastrous consequences.
Anyhow, I’m glad to finally find someone else who is also certain there is a second requisition date in the sales and purchase agreement. 🙂
Author
It certainly could be drafted in a simple to understand format. Maybe that’s what causes some confusion now.