Reviewed July 2020
A buyer and seller entered into a Residential Resale Real Estate Purchase Contract (the “Contract”). Incorporated into the Contract was a Buyer Contingency Addendum (the “Contingency”). The box at line 34 was marked, indicating the Contract was contingent on the closing of the buyer’s property. Line 37 indicated the buyer’s real property must be sold by June 28, 2016.
Subsequently, the buyer’s real property did close by June 28. The listing agent is now insisting that the buyer must provide an addendum to remove the Contingency.
Must the buyer create an addendum to remove the Contingency after it is satisfied?
A contingency is a clause that requires the completion of a certain act before the parties are obligated to perform their contractual obligations.
Here, lines 47-49 of the Contingency indicate that “If Closing [of the Buyer’s real property] does not occur by the date specified on line 37 [June 28], this Contract shall be deemed cancelled and earnest money shall be released to Buyer.”
However, because the buyer’s real property did close by June 28, no further action is needed and all parties may proceed with the Contract.