Asked and AnsweredWe are selling our co-op and the buyer is not obtaining a mortgage in connection with the purchase. The contract required the Board package to be submitted within 10 business days after the fully-executed contract was returned to the buyer. The buyer is two weeks late in submitting the package. Is the buyer in default?
Technically, yes. When the buyer is not obtaining financing, the standard form of co-op contract does require the submission of the Board package 10 business days after the fully-executed contract is returned to the buyer. The Board package consists of a number of annoying documents, including personal and business reference letters that can be time consuming to obtain. Sometimes, despite the buyer’s best efforts, complying with that ten-day period is difficult, if not impossible. When a Board package is late, and the buyer is subsequently turned down by the Board, the seller may attempt to use the buyer’s late Board package submission as a ground for not returning the contract deposit. Where the buyer is a few days late, but was proceeding in good faith, keeping the deposit over a tardy Board submission will only enrich the attorneys who are processing that lawsuit. Unless the buyer is intentionally or willfully failing to submit the Board package in a timely manner, have your lawyer turn up the heat, but in most cases, blowing up the deal over a Board package that’s a few days late, isn’t a good plan.