Problem with a Late Deposit on Back-Up Offer

3 Steps to Good Judgement and Decision Making - David Barrett

Ontario

Question:

First: My listing, the property is conditional (different buyer agent) on SBP (sale of the buyer’s property) with 48 hour escape clause.

Second offer (not mine) comes in a month later and is accepted conditional on first offer failing.

First buyer is put on notice with 48 hours’ Notice to Remove Conditions

Second offer deposit is not delivered in time (24hr from acceptance) as it was a late night deal, and Buyer wasn’t informed by his agent to get it done in the morning. Buyer is to go to bank today (35 hours later)

Do we still have a second offer in play?  Can the first offer cry foul?

Second: Can the Seller just accept the deposit as is or does it require an amendment to extend the time to receive the deposit?  They definitely want to keep #2 alive.  Will be firm sold if #1 can’t waive.

Answers:

First:

No, the deposit is simply a term of the contract. The second Buyer is in breach.

Now, it’s up to the Seller to decide to:

1) accept the breach and terminate the contract, or

2) ignore the breach and provide an extension.

This has nothing at all to do with the first Buyer.

They are in breach with the late deposit.

Second:

The Seller can just accept it, and not raise the issue.

If you were on the “buy side” you might want the “lateness” noted and waived in an Amendment.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

Leave a Reply

Your email address will not be published.