Posted by Carey_PA on February 12, 2001 at 21:24:03:
lol i know johnboy, but hell i was just so excited to have my first sfh offer accepted…next time i’ll be smarter 
“Time is of the Essence” - Posted by JoeKaiser
Posted by JoeKaiser on February 12, 2001 at 20:54:19:
Interesting thread below regarding the notion that a “time is of the essence” clause, when not included in a contract, implies that time is NOT of the essence.
Anybody have any experience to support this notion?
I’m having a hard time believing it to be true.
Joe
Re: “Time is of the Essence” - Posted by ray@lcorn
Posted by ray@lcorn on February 13, 2001 at 17:28:49:
Joe,
Had an interesting experience with this…
I bought a foreclosure that called for a 10 day close. There was no TIOTE clause in the foreclosure notice, or announced at sale, or in the contract. Knowing that I often play both sides of a deal at once, my attorney told me that we could string it out a while if needed because of the omission. I took the advice, and took my own good time about getting the funds together to close. The foreclosing attorney sent a notice on the eleventh day after the sale notifying me that my contract was void. After about a week of back and forth, my attorney sent him a copy of a cashier’s check for the balance due as evidence of my performance, and a copy of a lawsuit for breach based on the lack of a TIOTE notice… told him he would deliver either to his office. The foreclosing attorney immediately backed down, and we closed about three days later. My attorney had a good laugh, because the foreclosing attorney was a former law partner and had taught him the tactic!
To this day, I always look for the clause when reading foreclosures for just that reason. I also notice that that particular attorney has run that TIOTE clause in every foreclosure notice I have seen with his name on it ever since, and that was several years ago. So in my neck of the woods, TIOTE better be in there, or it ain’t!
ray
Re: “Time is of the Essence” - Posted by TD
Posted by TD on February 13, 2001 at 16:39:35:
As Bronchick et al have no doubt noted, it’s a legal term with specific legal meaning and precedent behind its use - in this case, it is used to note that when a specific item, clause or condition of a contract is not fulfilled, completed or otherwise satisfied by the time period set for such action, a material breach of the contract can be said to have occurred. Use of this term puts all parties on notice that all “time-sensitive” items must be treated as such - and the penalties for not doing so in a timely manner are said to constructively breach the terms of the contract.
Re: “Time is of the Essence” - Posted by Rob FL
Posted by Rob FL on February 13, 2001 at 13:00:23:
With all the crazy interpretations that some of these judges do nowadays, anything is possible. Everybody in the world knows that 2+2=4 but if you get it in front of the right judge with the right lawyers, 2+2 could very well equal 3 or 5. Go figure.
Re: “Time is of the Essence” - Posted by William Bronchick
Posted by William Bronchick on February 13, 2001 at 11:11:33:
“Time is of the essence” is a legal term that means the deadlines in the contract are firm. With this clause, a missed deadline may not be considered a breach of contract.
Re: “Time is of the Essence” - Posted by JHyre in Ohio
Posted by JHyre in Ohio on February 13, 2001 at 08:36:24:
Just spoke with a lawyer friend…he specializes in contracts, has 25 years of experience and does contracts in most of the country. He says that if TIOTE clause is not included, a judge would typically move performance deadline by 30 days, though 60 days is not unheard of, particularly in states like NY or CA.
John Hyre
What “NO Time is of the Essence” Means - Posted by Frank Chin
Posted by Frank Chin on February 13, 2001 at 06:41:31:
As I mentioned in the earlier thread, my attorneys advised against “Time is of the Essence” in several Real Estate transactions.
I’m told that here in New York, the date on the contract is really means ON or ABOUT, and the parties understand that there is an UNSPOKEN 60 days extension.
After the 60 days, either party can press and take legal action to force the issue. In my case, when the flip fell through, I was almost 90 days past the ON or ABOUT date. The Sellers attorney reminded my attorney that I’'m more than 60 days over.
In my current transaction, I have a 2-28-01 closing date with a one month extension to 3-31-01. My attorney explained that the buyer has an unspoken extension to 5-31-01. This will give me 60 more days for me to handle any unexpected issues.
My attorney discussed the issue with the buyer’s attorney and they agreed that since the buyer will be an investor, with no big rush to move in, the buyer will press for re-imbursement for any costs if the contract goes past the unspoken 60 days. I agreed to it - though theres nothing actually written.
Re: “Time is of the Essence” - Posted by JohnBoy
Posted by JohnBoy on February 12, 2001 at 21:21:39:
BTW, where is that thread you’re referring too?
Re: “Time is of the Essence” - Posted by Todd
Posted by Todd on February 12, 2001 at 21:20:58:
Joe, here is a great post on this subject. http://www.creonline.com/wwwboard/messages/11021.html
Re: “Time is of the Essence” - Posted by JohnBoy
Posted by JohnBoy on February 12, 2001 at 21:20:47:
Here is the legal definition found in a law dictionary:
time is of the essence
n. a phrase often used in contracts which in effect says: the specified time and dates in this agreement are vital and thus mandatory, and “we mean it.” Therefore any delay-reasonable or not, slight or not-will be grounds for cancelling the agreement
Re: “Time is of the Essence” - Posted by Carey_PA
Posted by Carey_PA on February 12, 2001 at 20:57:55:
In my last offer, I found that time was NOT of the essence…i had in there the offer had to be accepted the next day! (maybe that was too much, but heck i wanted to get some kind of sign)
anyway, a week goes by and no word from them whatsoever, and THEN bam they call and say they’ll accept the offer…
makes ya wanna say hmmmmmmmm
CAREY
Re: “Time is of the Essence” - Posted by Patti-FL
Posted by Patti-FL on March 25, 2001 at 21:23:43:
What is TIOTE? And exactly what stages does a REI take to contact a Foreclosured owner? How long does he/she have after listing in the legal?
Thanks,
PGJ
Re: “Time is of the Essence” - Posted by JoeKaiser
Posted by JoeKaiser on February 13, 2001 at 12:35:56:
Bill,
I assume you meant to say “without this clause.”
So, I’ve got an option to purchase your property, the option date comes and goes, and I go into court and ask for an extention because there was no “time is of the essence” clause in the contract?
Hard to believe I wouldn’t get laughed out of court.
Joe
Re: “Time is of the Essence” - Posted by JoeKaiser
Posted by JoeKaiser on February 13, 2001 at 12:38:20:
Thanks John.
Again, find it hard to believe but apparently you’ve got it covered.
Joe
Understood . . . - Posted by JoeKaiser
Posted by JoeKaiser on February 12, 2001 at 22:15:40:
But that’s pretty much my point . . . I’d like to hear from someone who knows through experience that, absent the clause, time is not of essence.
I just don’t believe it works that way.
Joe
Re: “Time is of the Essence” - Posted by JohnBoy
Posted by JohnBoy on February 12, 2001 at 21:18:49:
Would make me wanna say, somewhere around several thousand less now!!! LOL
Re: “Time is of the Essence” - Posted by ray@lcorn
Posted by ray@lcorn on March 26, 2001 at 09:24:51:
TIOTE= Time is of the Essence: a contract clause.
This clause means that the closing date in the contract is certain, and if the date passes, the party responsible for the delay is in default.
As to contacting pre-foreclosures, Joe Kaiser has probably the most information written on the subject. See his materials in the CRE Online bookstore. Foreclosure laws vary greatly from state to state, so the time period after listing could be anywhere from 5 days to 90 days, or longer.
ray
Re: “Time is of the Essence” - Posted by Irwin
Posted by Irwin on February 15, 2001 at 03:46:00:
Hi Joe:
Let me jump in and say that I agree with Bronchik. And yes, in an option situation, you would get laughed out of court for asking for an extension there. The reason is that the TIOTE issue doesn’t apply to an option contract. That’s because the exercise date of the option IS THE ESSENTIAL ELEMENT OF THAT CONTRACT, NOT JUST A PERFORMANCE DATE, which could be subject to interpretation as to it’s importance to the overall agreement. When an option date passes unexercised, there is no longer any contract that can be subject to interpretion, so there’s nothing for a Court to rule on. Also, this doesn’t mean that there can’t be a breach of contract when a performance date is missed and TIOTE is absent. It’s just more difficult to prove.
Re: “Time is of the Essence” - Posted by JHyre in Ohio
Posted by JHyre in Ohio on February 13, 2001 at 13:13:08:
To the best of my recollection, contracts require “substantial compliance”. TIOTE clause gives notice that something more than substantial compliance is required, that is, exact compliance. The lack of such a clause makes it more likely that a court will decide that compliance was “close enough”, if not exactly what was contemplated by the contract. However, certain kinds of contracts are by their nature “time sensitive” and a judge is less likely to permit a deadline extension…I think an option may be such a contact. In addition, while judges may allow “little people” to fudge, they feel much less sympathetic where big, bad investor types are concerned.
But then again, real estate contracts are not my specialty. Let’s see what Bronchick says about extending the date on an option, where you are the one who wants it extended. My guess is no extension.
John Hyre