Q: Our brokerage is located in the Bay Area so we use all 3 of the major purchase contract forms (CAR, PRDS and SFAR). We are confused as to how to count “Days” in each of these forms. Is the first day the day the contract is Accepted or is the next day the first day? Also, when a Notice to Perform is given to a Buyer, how do we count those days? What is a “legal holiday?”
A: Counting days is a source of confusion and the answer depends, in part, on which Purchase Agreement form you are using.
1. GENERAL RULES:
A.The general rule is that when a contract is Accepted (which is the date that the last signed, unchanged offer or counter-offer is delivered and personally received by the other party or their designated agent) that is Day ZERO. The next day is DAY 1 for purposes of counting the days for removal of contingencies, providing disclosures/documents and other contract obligations such as the Close of Escrow.
B. When delivering a Notice to the other party (such as a Notice to Buyer to Perform or in the CAR and SFAR contract forms a Demand to Close Escrow), the day that the Notice or Demand is Delivered to the other agent or party is Day ZERO, and the next day is DAY 1 for purposes of counting the days for the other party to respond.
C. The time of day (e.g., 3:00 p.m.) that a Contract is Accepted or a Notice is Delivered is NOT relevant because time frames are not calculated based about hours but only on full Days.
2. CALIFORNIA ASSOCIATION OF REALTORS’® PURCHASE AGREEMENT FORMS
The CAR Purchase Agreement forms have special rules regarding how days are counted, and these are found in Paragraph 30.F of the RPA which states:
“Days” means calendar days. However, after Acceptance, the last Day for performance of any act required by this Agreement (including Close of Escrow) shall not include any Saturday, Sunday or legal holiday and shall instead be the next Day.”
This means that you ALWAYS count ALL days including weekends and holidays when counting days. However, the LAST DAY FOR PERFORMANCE cannot be on a Saturday, Sunday or Holiday.
NOTE: The required time frame for performance when giving a Notice to Buyer to Perform (NBP) is 2 DAYS (not 48 hours) after the Notice is Delivered. The amount of time that is to be specified in the NBP can only be changed in the Purchase Agreement in Paragraph 14E. The required time frame for performance when giving a Demand to Close Escrow (DCE) is 3 DAYS after the Demand is Delivered; the amount of time that is to be given in the DCE can be changed in Paragraph 14G. Days are then counted as specified in Section 1B above, and those Days go until 11:59 p.m. (essentially midnight). See the Definitions in Paragraphs 30.F, G and H of the RPA.
NOTE: All time frames specified in the CAR Purchase Agreement forms are, by default, calendar days with the exception of the initial deposit which specifies business days.
3. EXAMPLES OF COUNTING DAYS IN A C.A.R.® PURCHASE AGREEMENT
Example 1: If, on a Wednesday, Seller issues a Notice to Buyer to Perform to remove contingencies, that day is Day ZERO. Thursday is DAY 1. Friday is DAY 2. If the applicable contingencies are not removed by midnight Friday, the Seller can issue a cancellation notice on Saturday.
Example 2: If, on a Thursday, the Seller issues a Notice to Buyer to Perform to remove contingencies, that day is Day ZERO. Friday is DAY 1 and Saturday is DAY 2. But, the last day for performance cannot be on a weekend or holiday, so the last day for performance is extended to Monday (unless Monday is a holiday and then the last day is extended to Tuesday). If the applicable contingencies are not removed by midnight Monday, the Seller can issue a cancellation notice on Tuesday.
Example 3: If, on a Saturday, Seller issues a Notice to Buyer to Perform to remove contingencies, that day is Day ZERO. Sunday is DAY 1. Monday is DAY 2 (unless Monday is a holiday). Then, if the applicable contingencies are not removed by midnight Monday, the Seller can issue a cancellation notice on Tuesday.
Example 4: The Buyer’s offer expires by default on the “third Day” (or a different time if modified in Paragraph 31 “Expiration of Offer”) but the time frame is specified as “after” the offer was signed by Buyer” not after it is Delivered.to anyone. If the Buyer signed the offer on Thursday, the third day will be Sunday. The reason for this is that in Paragraph 30.F the defined method of counting Days only takes effect after the Acceptance of the Agreement. Thus, offers and counter-offers can expire on weekends or holidays.
Example 5: If, on a Thursday, a Contract is Accepted, the Buyer has 3 Business Days to put the initial deposit into escrow. Friday is DAY 1 but Monday is DAY 2 and Tuesday is DAY 3.
4. COUNTING DAYS IN THE PRDS® PURCHASE CONTRACT
The counting and calculation of all Days in this Contract are calendar days with the exception of the initial deposit, which is counted in business days. However, if the last date for performance (e.g., contingency removal; delivery of disclosures/documents; Notice to Perform, Close of Escrow) falls on a weekend or holiday, the date for performance is extended to the next business day (i.e., a day that is not a weekend or legal holiday).
All time frames are specified as starting “from” or “after” an event. The date that any contract action or event occurs (e.g., Acceptance, the date that a Notice to Perform is Delivered) is thus considered “Day ZERO”; the next day is Day 1. (See PRDS Real Estate Purchase Contract Paragraphs 29F and M, for definitions of “Days,” “Delivery” and other essential terms.)
Counting days in the PRDS® Purchase Contract is exactly the same as described above in the CAR® Purchase Agreement forms with 2 exceptions: The time frame for Notices to Perform is always 2 Days, there is no flexibility to change those time frames (this eliminates some confusion in the CAR Notices to Perform which state: “2 or ___ Days”) and the Expiration of Offers specifies an actual date that the Buyer or Buyer’s Agent must receive the Seller’s signed documents.
5. COUNTING DAYS IN THE SFAR® PURCHASE AGREEMENT
The date that a contract action or event occurs (e.g., Acceptance, Delivery of a Notice to Perform) is considered “Day ZERO” and the next day is Day 1. Although all counting and calculation of days are calendar days (with the exception of the initial deposit which is counted in business days), the difference with the SFAR form is that if a date for performance falls on a weekend or holiday there is no extension of time to the next business day. SFAR carves out only one exception to this method of counting for the Close of Escrow, which is extended to the next business day because it is a practical impossibility to Close Escrow when the County Recorder’s Office is closed.
Thus, the big difference with the SFAR form is that if the date for the removal of a contingency, Delivery of Disclosures/Documents or other date for contract performance (except COE) falls on a weekend or holiday, the time frame for performance is NOT extended. (Note also that SFAR does not have a definition section.)
6. LEGAL HOLIDAYS: Legal holidays are defined in California Government Code 6700, which lists the following specific holidays and includes every Sunday:
- January 1st – “New Year’s Day”
- The third Monday in January – “Dr. Martin Luther King, Jr. Day“
- February 12th – “Lincoln Day“
- The third Monday in February – “Presidents’ Day”
- March 31st – “Cesar Chavez Day“
- The last Monday in May – “Memorial Day”
- July 4th – “Independence Day”
- The first Monday in September – “Labor Day”
- September 9th – “Admission Day”
- The fourth Friday in September – “Native American Day.”
- The second Monday in October – “Columbus Day“
- November 11th – “Veterans’ Day“
- December 25th
- “Good Friday” from 12 noon until 3 p.m.
- Thanksgiving Day
- Every day appointed by the President or Governor for a public fast, thanksgiving, or holiday
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