Often times, in the event of a failure to close in a real estate transaction, liability can turn on tendering. In essence, tendering serves as evidence of a party’s readiness, willingness and ability to close. Put differently, where a real estate transaction falls through, the party claiming repudiation of the contract can use their tendering as evidence that they were not the cause of delay or default, and that they had been acting in good faith.
For the seller, tendering could mean the delivery of keys to the property and the production of an executed mortgage discharge in registrable form. For the buyer, tendering could mean the tendering of the purchase price funds that have been secured via a mortgage.
Tendering is not always required. Sometimes, parties can choose to waive tendering conditions – this will generally occur where the other party had clearly repudiated the agreement, or has otherwise indicated through their conduct that they would not be willing or able to complete the transaction (i.e., in the event of an anticipatory breach).
It should be noted that tendering is not an absolute defense to a breach of contract. Even though a tender does not have to be perfect, where tendering is required, a deficient tender could nevertheless leave the tendering party vulnerable to liability. As best practice, both buyers and sellers to a real estate transaction should seek legal representation to ensure that they meet their obligations. Properly tendering can bolster your position at the litigation stage.
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