I just had a question come up on a purchase contract regarding how to count the days for a contingency removal. I knew the answer depended upon which contract was being used, but decided to do some further research into the 3 most common contracts used in the Bay Area ( CAR-California Association of REALTORS, SF-San Francisco and PRDS-Peninsula Regional Data Service purchase agreement). There are some interesting differences between the deposit/increased deposit and contingency removals I’m happy to clarify for you here!
All three contracts allow a user to negotiate contingency removals/closing dates and deposits by a set amount of days from acceptance.
When reading the specific language on the three contracts, all describe the count as “days.”
The difference between them is that the CAR contract defines what “days” mean. Specifically, if the count falls on a weekend or holiday, it’s then moved to next business day (Yay for agents who don't want to work on Christmas!).
Since the San Francisco and PRDS contracts don’t offer a definition of days, they are counted as regular calendar days (including weekends and holidays). With these contracts, a contingency removal might then be due on a Saturday, Sunday, New Year’s or Fourth of July.
Let’s see how the logic works for the deposit and increased deposit.
All three contacts define the original deposit as “business days.” This means we don’t count (or we skip) weekend days or holidays. An example of this is if we have contract acceptance on a Thursday and the following Monday is a holiday. Day one is counted as Friday, day two is Tuesday, and day three is Wednesday.
The increased deposit changes slightly:
CAR contracts...since the increased deposit is defined as days, we then count the calendar days, and if it falls on a weekend or holiday, move it to next business day.
For the PRDS contact, since a specific date must be identified by the buyer/agent, the definition of days can vary.
The San Francisco contract defines the count for additional deposit as days. It may then be due on weekends or holidays. The tricky part is that escrow offices may not be open on weekends or holidays so a buyer would technically need to deliver the deposit prior to the weekend/holiday to fulfill the contractual obligation.
Below is a cheat sheet summary I pulled together for my team.
I had a lot of fun on this mini-project of defining “days” for each contract!
The Transaction Coordinators at EscrowCoord.com understand the importance of correctly calculating out time frames to ensure contractual obligations are met. We carefully monitor important milestones and keep you notified. Call Diana today at 925-305-9625 to find out how we can enhance your real estate practice!