What does Time is of the Essence mean?
Here is an article courtesy of Curtis Bullock and written by UAR Attorney Kreg Wagner:
Time is of the Essence
On the hotline, I often hear callers use the phrase “time is of the essence” when describing their question. I want to discuss the contractual meaning of this phrase and why you should be aware of it.
What is time of the essence? Section 21 of the REPC states that “performance under each Section of the REPC which references a date shall absolutely be required by 5:00 PM Mountain Time on the stated date…and…the term "days" and “calendar days” shall mean calendar days and shall be counted beginning on the day following the event which triggers the timing requirement (e.g. Acceptance).”
First, all deadlines under the REPC are by 5:00 p.m. Mountain Time. I have had hotline callers simply assume that it was 7:00 p.m. or 12:00 a.m. or some other time period. Not knowing that deadlines are at 5:00 p.m. Mountain Time could be a costly mistake for clients (i.e. improper buyer cancellation and losing earnest money).
Second, anytime the REPC refers to days, it means calendar days. NOT business days. Using calendar days is easier to track, but it does require you to pay attention to days of the week (i.e Settlement deadline falling on a weekend).
Lastly, days are to be counted after the event triggers the timing requirement. The easiest example of this would be earnest money. Under the REPC, the buyer has 4 days to deliver earnest money to the real estate brokerage. So, if the buyer’s offer is accepted on 12/3, then the buyer has 12/4, 12/5, 12/6 or 12/7 to deliver the earnest money.
As REALTORS®, please pay close attention to the deadlines and the REPC language. Your understanding with the REPC is one of the greatest value propositions you have to offer your clients.
If you have any REPC questions, feel free to call the UAR’s Legal Hotline at 801-676-5211 on Monday, Wednesday, or Friday from 8:30 a.m. to 4:00 p.m.
Kreg E. Wagner, J.D.
UAR Legal Counsel