ADRIAN DEVELOPERS CORP., A FLORIDA CORPORATION; ADRIAN HOME COMMUNITIES, LTD., A FLORIDA CORPORATION; AHC AT MONARCH LAKES, LTD., A FLORIDA CORPORATION; ADRIAN HOMES WITH PMBC; MILLER SOUTH CORP., A FLORIDA CORPORATION, AND PEDRO ADRIAN, APPELLANTS/CROSS-APPELLEES,
v.
FRANCISCO DE LA FUENTE, INDIVIDUALLY AND AS TRUSTEE, AND BARBARA LEWIS DE LA FUENTE, APPELLEES/CROSS-APPELLANTS
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This appeal concerns whether a seller properly terminated a real estate purchase agreement when the buyer made a required deposit seven days late. The court holds that the seller waived its right to terminate by not rejecting the late payment timely, and remands for the buyer to proceed with specific performance.
The seller did not properly terminate the contract because it failed to timely reject the late payment. Although the deposit was made seven days late, the seller did not condition acceptance or assert a right to terminate until February 22, sixteen days after the late payment, by which time the payment had already been received. The buyer should be allowed to proceed with specific performance and the parties should be restored to the status quo prior to the seller's unsuccessful termination attempt.
[1] A party seeking to enforce a time of the essence provision in a contract must act promptly to terminate the agreement upon a breach.
[2] Failure to timely reject a late performance under a time of the essence contract may constitute a waiver of the right to terminate based on that lateness.
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Join FLexlaw to unlock all legal intelligence“one who wishes to claim under a time of the essence provision must do so in a timely manner”
Establishes the standard for enforcing time-of-the-essence breaches; the seller must act promptly to preserve its right to terminate.
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Join FLexlaw to unlock all legal intelligenceOn August 8, 2001, Adrian Developers Corp. agreed to purchase real estate from Francisco de la Fuente under a time-of-the-essence contract requiring c…
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PER CURIAM.
This appeal involves a time of the essence contract in which a payment was not timely made but which, when made, was not timely rejected. Thus, the issue is whether a right to terminate an agreement flowing from a time of the essence provision is waived by not terminating the agreement in a timely manner. We affirm the trial court’s determination that the agreement was not properly terminated but reverse on the issue of whether the purchaser should be permitted to proceed to purchase under the agreement.
On August 8, 2001, Adrian Developers Corp., as buyer, and Francisco de la Fuente, as seller, entered into an agreement to buy and sell certain real estate. The contract contained a time of the essence provision and required that the transaction close by February 6, 2003. The contract, after some earlier modifications, provided that a second deposit in the amount of $130,000 be made on or before February 6, 2002. However, the second deposit was not made until February 13, some seven days late, at which time buyer requested an addendum authorizing this late payment.
Some ten days after the second deposit was made, the seller notified the buyer that the addendum authorizing the extension of time for making the second deposit would be granted only if the buyer waived certain title objections. When the buyer rejected this condition, the seller brought an action to quiet title and to determine that the contract had been properly terminated. The buyer counterclaimed for breach of contract and specific performance.
The trial court, in essence, held that one who wishes to claim under a time of the essence provision must do so in a timely manner. Even though the second deposit had not been made on the 6th as required by the contract, it was not until the 22nd that the seller put a condition on accepting the addendum which would have extended the payment date. By this time, however, the payment had been made. And when buyer rejected seller’s condition causing seller to terminate the contract, seller did not instruct the escrow agent to return the deposit.
The trial court, on the authority of Lance v. Martinez-Arango, 251 So. 2d 707 (Fla. 3d DCA 1971), determined that the contract was not properly terminated. We agree and affirm.
However, even though the court held that the contract had not been properly terminated, it refused to grant relief to the buyer on the basis that the buyer had not proved that it was ready, willing and able to proceed to closing. The buyer did not show, said the court, that it had sufficient funds in its account to close nor did it show that financing arrangement had been made. The trial court further explained that the buyer had not conducted the environmental audit nor had it completed a survey of the property, both of which would have been necessary to obtain financing. It appears to us, however, that when the seller announced its intent some ten months before the scheduled closing to terminate the contract and filed action to do so, it relieved the buyer from proceeding to financing until the matter was resolved. The buyer in this case was not seeking to force an immediate, premature closing but merely to require the seller to comply with its obligations under the contract so that buyer could do what was required of it to meet its contractual obligations. In other words, the buyer requested the court to restore the parties to the status quo by putting them in the position they we in prior to the seller’s unsuccessful attempt to terminate. We believe the court erred in not doing so.
AFFIRMED in part; REVERSED in part, and REMANDED for further action consistent with this opinion.
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DE LA Fuente v. Adrian Developers Corp., 967 So. 2d 251 (Fla. 3d DCA 2007)…deposit, the seller brought a declaratory action to quiet title. The buyer counterclaimed for specific performance and, in March 2003, filed an amended notice of lis pendens on the property.2 Subsequently, in Adrian Developers Corp. v. de la Fuente, 905 So. 2d 155, 155-56 (Fla. 3d DCA 2004) (“Fuente /”), we affirmed the trial court’s determination that the seller’s attempt to terminate the agreement was improper but found that the trial court erred in not restoring the parties to the “status quo,” which was t…1 / 2
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Davis v. Ivey, 984 So. 2d 571 (Fla. 5th DCA 2008)…72, 1275 (Fla. 4th DCA 2005). The court made no such finding, nor would the Buyers’ decision to delay the expense of finalizing financing until they completed a title examination constitute unclean hands. See Adrian Developers Corp. v. de la Fuente, 905 So. 2d 155, 156 (Fla. 3d DCA 2004) (holding that the buyer was relieved from arranging for financing until the seller complied with its contractual obligations). There is evidence to suggest that the letter from the Buyers’ lawyer complaining about a potential…
Authorities Cited
- Lance v. Dr. Carlos Martinez-Arango et ux., 251 So. 2d 707 (Fla. 3d DCA 1971)
- Griffin v. State, 251 So. 2d 707 (Fla. 1st DCA 1971)