RE: RPA Deadlines
CALCULATING RPA DEADLINES
How are deadlines in the RPA calculated? There are three major deadlines in the RPA: (i) a 7 day deadline for Seller to deliver all Reports to the Buyer; (ii) a 17 day deadline for Buyer to remove all Contingencies and (iii) a 2 day deadline for buyer/seller to respond to a NBP or NSP.
1. PARTIES have 2 days to RESPOND to a NBP or NSP.
How are deadlines for a NBP or NSP calculated? When can a buyer/seller cancel based upon failure of the other party to respond?
Under the new RPA to be released in November, 2014, the NBP and NSP each require a response within 2 days.
Response time rules are summarized as follows:
I. The day that the NBP or NSP is served does not count. For example, if you serve a NBP or NSP on Tuesday at 9:00a.m., then you cannot cancel until after
11:59p.m. on Thursday night. In other words, only complete days counts toward calculating the deadline.
II. The time of day that you serve the NBP or NSP is irrelevant. For example, if you serve the NBP on Tuesday at 9:00a.m., then Wednesday and Thursday are the two days that count. The buyer has until11:59p.m. on Thursday to respond regardless of the time that you served the notice.
III. Deadlines that fall on Saturday, Sunday or a legal holiday are extended until the next business day. For example, if you serve a NBP or NSP on Thursday, then the deadline would be Saturday at 11:59p.m. However, since the deadline falls on a Saturday, the responding party has until11:59p.m. on Monday to respond.
2. SELLER has 7 days after ACCEPTANCE to deliver ALL REPORTS to the BUYER.
Seller has 7 days after Acceptance to deliver all “Reports” to the buyer. “Reports” mean the Transfer Disclosure Statement, Natural Hazard Disclosure, Supplemental Tax Disclosure, Lead-Based Paint Disclosure and every other disclosure required by the RPA.
The Acceptance Date is the date that the offer or final counter offer .is signed by all parties. For example, if seller signed a counter offer on Tuesday, but buyer does not sign until Wednesday, then Wednesday is the Acceptance Date.
The Acceptance Date does not count towards calculating the deadline. If, for example, the Acceptance Date is on Wednesday, then seller has until 11:59 p.m. on the following Wednesday to deliver all Reports to the buyer.
If the 7th day falls on a Saturday, Sunday or legal holiday, then seller has until11:59 p.m.
on the next business day to produce Reports. For example, if the deadline falls on Saturday, then seller has until11:59p.m. on Monday to produce the Reports.
3. BUYER has 17 days after ACCEPTANCE to REMOVE all CONTINGENCIES.
Buyer has 17 days after the Acceptance Date to remove all contingencies or cancel. The Acceptance Date does not count towards calculating the deadline. If, for example, the Acceptance Date is on August 1st, then seller has until 11:59 p.m. on August 18th to remove all contingencies or cancel.
If the 17th day falls on a Saturday, Sunday or legal holiday, then seller has until11:59 p.m. on the next business day to respond. For example, if the deadline falls on Saturday, then seller
has until11:59 p.m. on Monday to remove contingencies or cancel.
However, remember that the RPA does not penalize the buyer for failing to remove contingencies unless seller has served a NBP. Paragraph 14B4 of the RPA states that all contingencies continue to run in favor of the buyer until removed in writing.
Once seller serves a NBP, then buyer must either remove all contingencies within 2 days or seller can cancel. Your buyer should not be anxious to remove contingencies until after the NBP is served.