We’ve been asked if the closing date for a residential contract can be set a year after the execution date. If a residential contract does not close within 180 days (six months) of it being executed, Texas Property Code Sections 5.061 to 5.085 come into effect, adding notice and disclosure requirements that are not contained in the TREC residential contracts. Before setting a closing date for more than six months after the contract’s execution, the parties should consult with an attorney.
—Traci Jackson, associate attorney
So, what do Texas Property Code Sections 5.061 to 5.085 have to say about longer-than-six-month closings?
What flashed through my mind as I read further into this was the issue of disclosure. I would imagine updating the Seller’s Disclosure should need to be updated. Given the rule of 180 days, for a party not wanting to pay for an attorney, couldn’t the contract be rewritten? Although, the real question is the appraisal. I should think if it’s a financed transaction, the appraisal shouldn’t happen until closer to the time of closing. So if rewriting the contract for another 180 days, at the conclusion of the original contract, the representative agents should be rerunning comps to see… Read more »
I was told this was created to protect the consumer on Contract for Deed and Lease Purchases. These are written with a promise to transfer the deed in the distant future. Lease Purchase Sellers would put in the agreement that if the tenant was late x amount of days the Option Fee paid (many times $5000+) was forfeited and then they would evict the tenant. Or the Seller would default on the loan, or stop paying taxes and insurance. The tenant would lose their option money. (especially in the market around 2007-09) See Executory Contract requires for more info. My… Read more »
Wouldn’t an extension work as well?
Please read link below regarding closings past 180 days. The old saying that “time is money” holds very true in many real estate deals.
This is a lawsuit waiting to happen… Seems that anyone attempting to execute a contract of this length is really trying to avoid hiring an attorney to write a lease purchase. NO NO NO. Don’t do it EVER!
So, what if it’s the buyer who wants to close nine months after signing the contract due to not wanting to take money out of investments which will roll over at the end of the year. Wants to close in January. Willing to put down large deposit to hold the deal and close right after first of the year….this is a cash sale…Is this a simple thing or are we as sellers risking anything. It’s and RV lot and has been on the market for two years.