Last week this article discussed a valid use of the Unilateral Extension. This week, we present an example of an attempt to use the Unilateral 8-day extension incorrectly.
This is the relevant language:
“Buyer/ Seller hereby gives notice to the other parties to the above-referenced purchase and sale Agreement that the closing date is extended for eight (8) days for the following reason(s):
Example 1 - The property is a part of a condominium and the seller is so behind on monthly assessments that the association has filed a lien on the property. The lien can be lifted by payment of the back assessments, but the seller hasn’t paid. Is this a valid subject of the 8-day extension? Is this even a title issue?
Example 2 – The Seller withheld the final payment to a roofer to have his roof replaced. The roofer timely filed a materialman’s claim for payment.
Example 3 – The IRS and the State of Georgia have liens on the property for non-payment of taxes.
Example 4 - The owner’s ex-wife has a judgment for child support and has filed a lien on the property for payment.
If a title insurance company will not insure the title at its regular rates and subject to only standard exceptions, there is a title issue. So, yes, these are all examples of liens that would prevent a title company from issuing a title policy. However, this is where the GAR exceptions come into play. These are all liens that can be satisfied and released by payment of money. Therefore, the GAR Unilateral 8-day extension cannot be used by the Seller.
Of course, there is always the other way to extend the Agreement – a bilateral agreement to extend, executed by both parties!
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