Effective Dating
The effective date of a contract is the date on which all parties have executed and delivered the contract to the other party. If you, as a buyer, were not in the presence of the seller when you signed the contract, the effective date is the date the last person signed and initialed any changes and delivered the contract to the other party. Every contract is executed in a different manner so there are many fact scenarios to consider. I always suggest when a contract is signed that all parties communicate to confirm the effective date. In that way everyone knows the date and will be in agreement when calculating time periods. Simply circulate an e-mail so that everyone can easily confirm or voice an objection. Your real estate agent will facilitate this process.
I was recently contacted by a buyer who did not receive all the pages of the contract from the seller. Delivery of the contract, and all accompanying disclosures and riders, is a key component of the effective date. In this instance the seller had not delivered the contract to the buyer and the effective date had not yet occurred. None of the time periods which were calculated from the effective date had begun. The date for inspections and the mortgage commitment due date are dependent upon the effective date.
In another transaction, I was contacted by the listing real estate agent because the buyer’s lender requested a legible copy of the contract be circulated for signatures. It was vital for the parties to include a provision in the second contract to confirm it was a duplicate of the first and executed for legibility purposes only. Otherwise the second contract would be considered a new contract with a different effective date from the first contract. There could have been disastrous consequences if either party believed the second contract was independent from the first. It was fortunate that the listing agent had contacted me when she received the second contract.
We always want to be conscious of the execution and delivery of contracts so that the effective date is known to all parties. I call it “Effective Dating” of the contract.
Real Estate Attorney, Jupiter, FL
James A. Cioffi is one of the most experienced attorneys in South Florida today. In fact, he writes a legal advice column under theme of “The Juris Doctor” Feel free to contact James A. Cioffi confidentially regarding your legal question and he will personally respond. He can be reached at 561-747-6000 or visit his website at https://jamescioffi.com In fact, he writes a legal advice column under theme of “Ask The Juris Doctor”.
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James A. Cioffi, Esquire
The Juris Doctor
250 Tequesta Drive, Suite 200
Jupiter, FL 33469
561-747-6000