Legal Question in Real Estate Law in California

As usual in my responses, it depends on what the contract says. Does it make time of the essence? Was the builder/ seller aware of your hope to get a tax rebate? Absent a time of the essence provision, the court will infer a reasonable time to perform, which may not meet your unilateral expectations.

I agree with Mr. Roach, and I'd like to propose two other possible solutions based on complying with the tax-rebate law despite delayed completion of construction.

The first possibility is that maybe the law reads differently than you assume. (I hasten to add that I DON'T KNOW myself). Possibly the law's deadline is based on when you make a binding commitment to buy and take ownership and possession, not when you actually get possession. This is worth checking out.

The other possibility is that you might be able to buy and close before completion, if eligibility for the tax credit requires taking title before the deadline in addition to making a binding commitment to buy. This might not be possible because of lender requirements that the property be certified as complete and ready for occupancy, but also is worth checking.

I disagree with both my colleagues. Time is always of the essence of a real estate purchase contract. Mr. Whipple is correct that you should confirm that the credit requires you to close by the deadline, rather than be under contract, but I think it does require escrow to close.

When a real estate sale contract fails to close on time due to fault of the seller, the buyer has two options, terminate the contract and rescind it, or keep the contract in effect and sue for damages. If in fact the failure to close on time results in the loss of the credit, I think the developer owes you an $8,000 credit back in the escrow, plus any incidental costs and expenses you may have incurred due to the failure to close on time.