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How long is a banking day?

By Robert Hof

Sheri-Lee Weslock agreed to sell her home in Burlington to Neil Sexton on March 30, 2008, for $647,500. The deal was conditional for 4 banking days on the buyer obtaining satisfactory financing. If the notice was not delivered, the deal would be cancelled. Mr. Sexton claimed that his real estate agent told him that the clause meant that he had until 4 pm on the last day, being April 3, 2008, to deliver the waiver, or the deal would be cancelled. There was no reference to 4 pm in the condition. Mr. Sexton admits that he faxed his waiver to his agent at 3:30 pm on April 3, 2008 but that he then immediately changed his mind and told his agent not to send it after all, because he did not have confirmation that he had obtained his financing. The waiver was however, faxed to the seller’s agent at 6:30 pm on April 3, 2008. This was not disputed.

Mr. Sexton attempted to cancel the deal the next day, saying that he did not get his financing, did not intend to send the waiver and if it was sent, it was sent too late, because the banking day already ended.

Ms. Weslock then re-sold the property for $520,000 because the market turned and sued Mr. Sexton for her loss, which including carrying and other costs, which exceeded $180,000.In a Superior Court decision dated February 7, 2012, Judge William Hourigan determined that a banking day is no different than a regular day and ends at 11:59 pm. If Mr. Sexton had wanted the condition to be time sensitive, such as 4 pm, it should have said so in the condition. Therefore, the waiver sent by Mr. Sexton was in fact sent in time and he could not get out of the deal. Mr. Sexton thus had to pay the entire buyer loss of $180,000 plus $14,000 in costs. Mr. Sexton represented himself, without a lawyer.

There are many lessons to be learned from this case. Under the Real Estate and Business Brokers Act, a business day means a day that is not Saturday, Sunday or a statutory holiday. However, that is not the universally accepted definition of a business or banking day. There are also arguments as to when you start counting the days. In addition, many banks are now open on Saturdays and Sundays.

In my opinion, not only should the words “calendar day” be used in any condition, it is better to pick an exact date when the condition will expire and it should also be clear that the condition is open until 11:59 on the final day, so that there is no confusion or misinterpretation. Never send in a waiver for a financing condition until you have a written signed commitment from a lender agreeing to give you your money.

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