What does a buyer owe the seller to extend the option period?

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12/18/2015 | Author: Editorial Staff

My buyer client is on the eighth day of his 10-day termination-option period, and the seller still hasn’t turned on the utilities to allow the buyer to have the property inspected. The seller promised to have the utilities on next week, so my buyer just wants to extend the termination-option period another 10 days. Will the buyer have to pay another option fee even though the extension is because the seller breached the contract? 

Yes. If the buyer in this situation chooses to request an extension of the termination-option period instead of exercising the default remedies available to him in the contract, then he must agree to offer something of value as consideration to the seller to ensure that the extension is legally enforceable. This is often done by paying an additional termination-option fee. 

Case law in Texas suggests a termination-option period cannot be extended without an additional option fee, so a buyer should pay another option fee to reliably extend the option period. 

Read more legal FAQs on texasrealestate.com.  

Categories: Forms, Legal, Buyers, Sellers
Tags: option fee, option period, termination option, contracts, forms

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Legal disclaimer

The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

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