Legal Question in Real Estate Law in California

I am a California seller who has issued a "Notice to Proceed" to the buyers because the close of escrow date has already been exceeded and they have not funded their loan. I also issued a "demand to Close" knowing that there is no way they can fund the loan and close in 3 days. They have responded by sending me a Notice to Proceed to have the contractually agreed upon termite work done and claim they have not been able to close because I have not done the termite work. They are claiming they will sue me for breech of contract and force the sale of the house. Since they have not fullfilled their contractual obligations by funding the loan by close of escrow, what right do they have to try and sue me? Does my "Notice to Proceed" supercede theirs, and I can terminate the contract with risk of them sueing?


Asked on 3/31/12, 1:50 pm

1 Answer from Attorneys

The notices mean nothing unless they are backed up by contractual obligations that have not been met. If a condition of closing escrow is for you to do termite work, and their lender will not fund until the work is done, it is YOU who are in breach and you sending a demand before they did does not change that. The buyer and lender are under no obligation to fund the escrow when prior conditions to close that are your obligation have not been done. They have no obligation to have their lender fund until close is due. If you have not fulfilled your obligations that are conditions of closing escrow, they are under no obligation to fund or close.

Read more
Answered on 3/31/12, 3:12 pm


Related Questions & Answers

More Real Estate and Real Property questions and answers in California