Albert Einstein once said that “The only reason for time is so that everything doesn’t happen at once.” That may be true, but when you are working on a deal, it can seem like weeks go by with no activity—and then, suddenly, everything does happen at once.
This is why qualified real estate lawyers believe that it is important to understand exactly how time, specifically, days, are calculated under the FR/BAR contract. The contract does not say that “time is of the essence” for nothing—Florida courts strictly enforce time deadlines. As a result, a party can be held in default of the contract by being one day late in his or her performance.
Paragraph F. of the FR/BAR contract starts out by proclaiming: “Calendar days shall be used in computing time periods.” That sounds easy enough: When determining a time period, you use calendar days, which include weekends and holidays, as opposed to business days, which exclude weekends and holidays. But then paragraph F. starts carving away at this general rule.
It goes on to say: “Except for time for acceptance and Effective Date as set forth in Paragraph 3, any time periods provided for or dates specified in this Contract, whether preprinted, handwritten, typewritten, or inserted herein, which shall end or occur on a Saturday, Sunday, or national legal holiday (see 5 U.S.C. 6103) shall extend to 5 p.m. (where the Property is located) of the next business day.” (Emphasis added). This means that only when you are determining time for acceptance (during the offer counter-offer stage) and effective date under paragraph 3, you count all days, even if the day in question occurs or ends on a weekend or holiday. That makes sense—a lot of negotiations occur on a weekend, and it would be too difficult and cumbersome to determine offer and counter-offer dates if you had to exclude weekends. (Per 5 U.S.C. 6103 the national legal holidays are: New Year’s Day, MLK, Jr. Day, Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veteran’s Day, Thanksgiving Day, Christmas Day.)
By contrast, if any other time period or date, such as loan approval period, inspection period, and closing date, ends or occurs on a weekend or national legal holiday, then it carries over to 5 p.m. the next business day.
That this means all instances, you count a weekend or holiday that occurs during (i.e. not at the end of) your time period. The only instance in which the day carries over until the next business day is if the time period ends on a weekend or holiday. (Or if it “occurs” on a weekend or holiday. This would rarely happen–only instance in which it would is if, say, you write your closing date as December 25. Don’t do that.)
Fair enough. But paragraph F. is as instructive for what it doesn’t say as much as for what it does say. Take, for example, a regular day, meaning a day that does not carry over from a weekend or holiday. Obviously, most days will fit into this category. But incredibly, Paragraph F. does not state when a regular day ends. Does it end at 5 p.m., or does it end at 11:59 p.m.? Fortunately, Florida case law takes over on this issue, and Florida case law says that a day ends at 11:59 p.m.
Just as unbelievably, paragraph F. fails to state what day you start counting—do you include today or do you start tomorrow? For example, let’s say your effective date was August 19, 2019. Your inspection period is 10 days. Do you include August 19, 2019 in your time calculations, in which case your inspection period expired on August 28, 2019, or do you exclude August 19, 2019, in which case your inspection period expired on August 29, 2019?
Quite candidly, there is absolutely no excuse for the FR/BAR contract drafters to fail to address commonly occurring issues in the contract. But here again, Florida case law comes to the rescue: It states that, when calculating time periods, the day the act begins to run shall not be included. So in our example, you would exclude August 19, 2019 in your time calculations, and your inspection period expired on August 29, 2019.
Time matters—life is really just a measurement of time. Due to some sloppy composition by the FR/BAR contract drafters, though, sometimes it seems like it takes an Einstein to figure out how to count time under the FR/BAR.
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Ned Hale is a Board Certified Attorney with over 20 years of experience. He has offices in Estero, Fort Myers, and Sanibel.