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What Are Legal Holidays For Purposes Of Counting Days

by | Jan 6, 2023 | Contracts and Forms, Forms, Uncategorized

BROKER RISK MANAGEMENT

WEEKLY PRACTICE TIP

Q:  What is a “legal holiday” for purposes of counting days in a purchase contract?

A:  That is a good question.  Most real estate purchase contracts provide that, when counting days for removal of contingencies, performing contract obligations, or close of escrow, the last Day* for performance cannot be a “legal holiday” without specifying a definition.  Until the December 2022 revisions, this was an issue with the CAR purchase agreement forms. That omission has led to confusion as to which holidays are “legal holidays” for the purpose of counting days.

* The word “Day” is capitalized here because the CAR RPA defines capital “D” Days as meaning “calendar day or days. However, delivery of deposit to escrow is based on business days.”

With the December 2022 revision to the CAR purchase agreement forms, there is now a definition of “Legal Holidays,” at least when using those forms (See, for example, paragraph 25I of the RPA).  Those definitional paragraphs state that Legal Holiday “shall mean any holiday or optional bank holiday under Civil Code §§ 7 and 7.1, any holiday under Government Code § 6700.”

That is hardly helpful since Civil Code 7.1 defines state holidays and Government Code 6700 defines “optional bank holidays.” There is a lot of overlap between the two statutes, and numerous differences.

Here is a list of “Legal Holidays” for use when using the CAR purchase agreement forms from the December 2022 revision and later:

  • Every Saturday and Sunday
  • January 1st
  • The third Monday in January, known as “Dr. Martin Luther King, Jr. Day”
  • February 12, known as “Lincoln Day”
  • The third Monday in February
  • March 31st, known as “Cesar Chavez Day”
  • The last Monday in May
  • June 19th, known as “Juneteenth”
  • July 4th
  • The first Monday in September.
  • September 9th, known as “Admission Day”
  • The fourth Friday in September, known as “Native American Day”
  • The second Monday in October, known as “Columbus Day”
  • November 11th, known as “Veteran’s Day”
  • December 25th
  • Good Friday from 12 noon until closing
  • The Thursday in November appointed as “Thanksgiving Day”
  • Any Monday following any Sunday on which January 1st, February 12th, July 4th, September 9th, November 11th, or December 25th falls
  • Any Friday preceding any Saturday on which July 4th, September 9th, or December 25th falls

The SFAR and PRDS purchase agreement forms do not have a definition for “legal holiday.”

NOTE: There can be additional holidays in two rare statutory instances which are not listed anywhere:

  1. Every day appointed by the President or Governor for a public fast, thanksgiving, or holiday. Govt Code 6700.
  2. Any closing of a bank because of an extraordinary situation, as that term is defined in the Bank Extraordinary Situation Closing Act. Civil Code 7.1

 

This Weekly Practice Tip is an attorney-client privileged document for the exclusive use of clients of Broker Risk Management and their agents.  It may not be reproduced or distributed without the express written consent of Broker Risk Management.  The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather to suggest good risk management practices.