Legal Question in Real Estate Law in California

Re: Lease options

The owner will probably lose. This is not a significant breach in the agreement to call for more than any monetary damages he might have.

If he fights you, you can sue and tie up the property. Call me if you need help or a letter.

Re: Lease options

Options are strictly construed, and if it called for you to close by January 31, that may be a good defense by the owner. But there are many reasons why the delay of one day may have been beyond your control. And if the landlord is involved in just one of those reasons, you should win. If the only way, besides the direct communication approach, to get the house is by a law suit, make sure there is a good case that allows the one day of delay to be excused in an option on real estate - before you spend money chasing the owner in court.

Re: Lease options

There is no grace period. You're dealing here with a breach of the agreement. As to what the court might do after both parties spend a lot of money in court is a crap shoot. However, it's now past Feb. 1, 2002, and the owner either accepted the money or has turned it down. The ball is then in your court.

Re: Lease options

You have received somewhat conflicting opinions so far, and at the risk of further confusing you I'd like to take a shot at straightening things out.

Your situation may have come under two different sets of rules regarding excusable delay at various stages.

First, at an early stage, you had an exercisable option to purchase the property. The exercise of options is subject to a rather strict deadline rule; you must give notice of exercise of the option prior to the deadlne, and in the specified manner, or you're out of luck; there is rarely any exception to that rule.

However, exercise of the option and closing the sale transaction are, I think, probably legally distinct events. Once you have exercised the option, you are in contract to buy, but you have not yet bought; that happens when escrow closes and the deed records.

The rules for excusable delay in closing are somewhat more relaxed than the rules for exercising an option. Just how relaxed they are depends upon whether either the purchase contract or the escrow instructions contain a 'time is of the essence' clause. If not, closing within a reasonable time after the time formally specified will not kill the deal.

Even if there is a 'time of the essence' clause, a short delay does not necessarily end your rights to have the transaction proceed. A party invoking a time clause against the other must show he was ready to perform and tendered performance, that he demanded your performance and you did not perform and had no valid reason, etc. etc.

In short, if a distinction can be made between exercise of the option, on the one hand, where strict observance of time is necessary, and closing of a contract of sale created by such timely exercise, on the other hand, you might prevail under the more relaxed rules applicable to the latter.

Whether you actually win or not will depend on a judge or jury's evaluation of the facts, relative harm to the parties, validity of reasons for slow performance, seller's relative blame, etc.