An Alternative To On Or About Closing Dates

In the typical real estate transaction in New York, closing dates are identified as “on or about” dates, meaning the closing date in the contract is a target date only. This practice stands in contrast to other states where contract closing dates are firm: the parties are obligated to arrive at the closing table on that specific date to bring the deal to a conclusion.

Like any process, there are always arguments in favor of the way things are done, the most common of which is, “That’s just the way we do things.” The problem lies in the fact that “on or about” closing dates are confusing to the parties which leads to a significant amount of explanation by the professionals involved and, more importantly, a significant amount of frustration on behalf of buyers and sellers when a closing occurs after the closing date in the contract.

The argument that “on or about” closing dates are the way real estate deals are done in New York is flimsy, at best. Everything in the world is done a certain way until someone figures out a better way to do things. We had horses and now we have cars. We had candles and now we have electricity. We had fans and now we have central air conditioning.

See where I’m going with this?

To some degree, I’m exaggerating. One of the primary reasons why we still have “on or about” closing dates is because, if there’s one group of professionals that is resistant to change, it’s the New York legal industry. As a result, trying to improve upon the wishy-washiness of target closing dates and the headaches they can cause is nothing short of an uphill battle.

However, The Donaldson Law Firm has been having some success with replacing “on or about” closing dates with target windows during which the parties must close. For example, rather than the contract stating, “Closing shall occur on or about September 30, 2022,” it would state, “The buyer and seller agree that the closing shall occur no earlier than September 26, 2022 and no later than September 30, 2022 and either party maintains the right to declare that time is of the essence to compel a closing during this time frame and such declaration shall be considered reasonable based on the intent of the parties.”

This seems like a good compromise compared to the uncertainty associated with “on or about” closing dates where one party has the right to delay closing for more than thirty days, usually to the frustration of the other side. Of course, even with a firm closing window, the parties are always free to agree to adjourn a closing if either the buyer or the seller have a good reason to ask for a few more days.

However, if one party doesn’t show up at any point in that specific closing window of time, the other party has the right per the contract to make time is of the essence so that, if the other party still fails to show up, then that party is in default which, as we all know, is a very bad position to be in, especially for buyers.

While our office believes this is a better way to go into contract, it’s been our experience that the majority of attorneys are going to resist the idea of agreeing to anything other than an “on or about” closing date. (See note above about the New York legal industry’s resistance to change.) Yet if either party has to close by a certain date, either due to an expiring lease or any other circumstance, making the closing date firm within a certain window of time can serve as a simple solution.

If you have more questions or if you’d like to discuss a specific real estate issue, please give us a ring or send us an email.