I own two houses, and last winter, during a blizzard (a rarity
in
Virginia) the rental house suffered a fire.
The contractor, who is rebuilding it, told me that it would
be
finished by September (2003) and so I signed a contract to sell
it. The
buyer and I agreed on a closing date of October 15.
The house was not finished by then, so no one went to the
closing. We
set another date of Nov 15, but again the house wasn't finished.
Now (Jan, 2004) the contractor still hasn't finished the
house. I
haven't signed any more addendums agreeing to any new signing
dates.
(The buyer even demands I pay a $4000 penalty so he can continue
to lock in a
low interest rate he was given by the ban back in September.)
My question: Is the original contract still good? Does that
fact
that the closing date part of the contract has expired mean that
the
entire contract is no longer valid (good?)
The failure to perform the contract on time is a minor matter.
It's either a minor breach or a condition that has been mutually
waived. That failure doesn't have the effect of cancelling the
contract unless the contract says that. The contract continues
until it is performed or until one of the parties establishes that
time is of the essence and that any further delay will be a major
breach. That can be accomplished by a letter. After that, any
further delay will make it possible for the other side to cancel.
So you are still bound. You and the buyer can cancel by mutual
agreement, or you can extend the deadlines by mutual agreement.
Regardless of what the buyer demands, you don't have to agree to
pay the lock-in fee. Another option is to close the deal even
though the contractor isn't done. The buyer can buy the house
as-is, you can assign the contractor's contractor to the buyer,
with the consent of all three parties. You would discount the
price by the remaining amount the buyer will have to pay the
contractor.
McGvyer
