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The buyer and seller executed an Arizona REALTOR® Residential Resale Purchase Contract with a standard 10-day inspection. On the 12th day after the Contract was entered into, the buyer provided a Buyers Inspection Notice and Sellers Response (“BINSR”) requesting that several items be repaired. The seller claims that the late BINSR is a breach of the contract and issued a three-day cure. The three days have now passed and the seller is attempting to cancel the contract so he can sell to another buyer for significantly more money.


Is the seller allowed to cancel the contract because the BINSR was late?


See discussion.


The inspection contingency and the BINSR process afford the buyer an opportunity to inspect and either request repairs or cancel the transaction provided the repair requests are made within the agreed upon inspection timeframe. Here, the buyer provided the BINSR two (2) days after the inspection period expired. The result of the late BINSR is that the buyer has lost the inspection contingency; he no longer has the right to cancel the contract based on the property condition or request repairs. The buyer is contractually obligated to close escrow regardless of the items requested in the BINSR. The late BINSR, however, does not give the seller the legal right to cancel the contract.