In early March 2022, two parties executed a contract of sale for a four-family property in Brooklyn. The property contained tenants with expiring leases, an expired access agreement, and a myriad of title clearance issues. After the expiration of the closing period, with no inclination that Purchasers would close, the Sellers realized that they needed to hire alternative representation.
Desperate to close and fund a major home improvement project, the Sellers sought the aide of Adam Leitman Bailey, P.C. Since the Sellers were situated in Berlin, Germany, and the deal had been in contract for months, Adam Leitman Bailey, P.C. needed to act quickly.
Due to the acrimonious background, we knew the only way to get the Purchasers to the closing table would be a Time is of the Essence (TOE) Closing. If hypothetically, the Purchasers did not close by the Time Of The Essence date, we would seek to hold them in default of the contract and retain the down payment as damages. Given Adam Leitman Bailey, P.C.’s extensive experience litigating these matters, the clients agreed this was the best route. Generally, Time is of the Essence Letters cannot be sent until the party setting the closing is “ready, willing and able to close” under the terms of the Contract. Unfortunately, as the file transitioned to our office, we instantly recognized the Sellers were not ready per the terms of their agreement.
In a matter of days, we coordinated an LLC resolution with the clients in Berlin, received an updated mortgage payoff authorization, and coordinated the removal of multiple city violations. As soon as all conditions were clear, we delivered the Time is of the Essence Letter to the purchaser’s counsel.
Although 30 days is the earliest the Time Of The Essence Letter could set the closing, the Purchasers and their attorney knew from reputation, that Adam Leitman Bailey, P.C. words were not empty threats. After a week of getting funds in order, the Purchasers agreed to close three weeks prior to the Time Of The Essence date. Since some leases were expired or expiring soon, closing earlier saved the clients from having to pay the mortgage out of their own pockets. Closing earlier also gave them earlier access to funds without litigation. Most importantly, however, it gave them closure and peace of mind.
The transaction and pre-litigation preparation were handled by the Transactional and Banking Departments at Adam Leitman Bailey, P.C.
