When I buy or sell a home in New York do I have to close on the closing date in the contract?
Almost all contracts for the sale of homes, including contracts for the sale of co-op apartments and condominiums, in the New York Metropolitan area have an "on or about" closing date. This date is typically approximately 60 calendar days after the date the contract has been signed by both the buyer and seller. The legal significance of the phrase "on or about" is that it has been interpreted by the New York Courts to mean that both parties have a reasonable time beyond that date in which to close.
While the New York Courts haven't stated the number of days which would be considered reasonable, attorneys in the New York Metropolitan area have come to a consensus that 30 calendar days is a reasonable time absent any unusual circumstances. For example, if your contract has an "on or about" closing date of July 22, 2013, both the buyer and seller have until August 22, 2103 to close the transaction. After the expiration of 30 days if a party is unwilling or unable to close, the attorney for the other side will typically send a "Time of the Essence" letter setting forth a new closing date, usually within 10 days of the date of the letter. If the delaying party is unable to close by the "Time of the Essence" date, they will be in default under the terms of the contract.
If the buyer is ultimately determined to be in default by a court, the seller will be entitled to keep the buyer's down payment as damages. If it is the seller who is determined to be the defaulting party, the buyer may either cancel the contract and receive their down payment back or the court may order the seller to close, a remedy called "Specific Performance" which is unique to real property contracts.
It is always a good idea before you sign a contract, either as a buyer or seller, to discuss with your attorney when you would like to close so your attorney can adjust the "on or about" closing date if necessary.