In South Carolina, the question of whether you can receive compensation for delayed closing depends on several factors, including the specifics of your contract and the circumstances of the delay.
Delays in real estate closing can stem from a variety of issues, ranging from financing problems to last-minute paperwork errors. These setbacks can be frustrating and costly, leaving you wondering if there’s any recourse for the time and money lost. In South Carolina, the law provides certain protections and remedies for parties affected by a delayed closing.
At Savage, Royall & Sheheen, LLP, our real estate lawyers help clients figure out what their rights are when a real estate deal hits a snag.
What Causes a Delayed Closing in South Carolina Real Estate Deals?
Here are the most common causes of delayed closings in South Carolina real estate transactions:
Financing Delays
Even when a buyer is pre-approved, the lender’s underwriting process can hit unexpected snags. Missing documents, last-minute credit issues, or changes in income can delay loan approval.
Title Issues
Problems with the title can also cause delays. These might include undiscovered liens, disputes over property boundaries, or issues with the title that were previously undisclosed or unresolved.
Inspections and Repairs
If significant issues are discovered during the home inspection, it may delay closing until these issues are resolved. Negotiations over who is responsible for the repairs and ensuring the work is completed satisfactorily can extend the expected closing date.
Appraisal Discrepancies
If the appraisal comes in lower than the expected value, it can lead to delays as parties may renegotiate the purchase price, or the buyer may need to secure additional funding.
Contingencies Not Being Met
Many real estate contracts include contingencies that must be met before the transaction can close, such as the sale of the buyer’s current home, approval of homeowner association (HOA) documents, or other contractual conditions. If these are not met by the specified deadlines, the closing can be delayed.
When Is a Closing Officially Considered “Delayed”?
A closing is officially considered “delayed” when the transfer of property ownership does not occur on the date specified in the real estate purchase agreement, and there is no mutual agreement between the buyer and seller to extend this date.
Many real estate contracts include a built-in provision known as a grace period, which allows a brief window for either party to finalize details without facing penalties. However, if this grace period passes or if your contract does not include one, and either party is unable or unwilling to complete the transaction on the specified date, the closing is officially considered delayed.
Can a Buyer or Seller Get Compensation for a Delayed Closing?
If you’re the seller and the buyer is the reason for the delay, you may have a right to compensation. This is especially true if the delay caused you to take on extra costs, like additional mortgage payments, utility bills, storage fees, or even missing out on another sale.
Buyers may also seek compensation if the seller fails to clear title issues, complete agreed-upon repairs, or meet other conditions necessary for closing. In such cases, the buyer could claim damages for additional costs they face, like extended rental agreements or temporary housing, and potentially lost opportunities for more favorable mortgage terms that were available at the planned closing time.
Penalty for Buyer Not Closing on Time in South Carolina
When a buyer fails to close on the agreed date, they can face significant penalties if a “time is of the essence” clause is included in the contract. Here’s what can happen if a buyer doesn’t close on time:
Loss of Earnest Money Deposit
If the buyer fails to close as scheduled, they risk forfeiting the earnest money deposit to the seller as compensation for the breach of contract.
Daily Penalties or Per Diem Charges
If daily financial penalties for delayed closing are within the contract, per diem charges can occur each day past the closing date.
Breach of Contract and Lawsuits
If the delay is significant or if the buyer refuses to close altogether, the seller may have grounds for a breach of contract lawsuit.
Missed Opportunities for the Seller
If the seller was planning to use proceeds from the sale to purchase another property or pay off debts, the delay could have a domino effect.
How a Real Estate Lawyer Can Help
At Savage, Royall & Sheheen, LLP, we help clients across South Carolina protect their interests during every stage of a real estate transaction, including:
Reviewing Your Contract
Most real estate contracts contain clauses that spell out what happens if the closing is delayed. We’ll help you understand what rights and obligations you have, and whether you’re entitled to compensation for a delayed closing.
Negotiating Extensions
Sometimes, a short delay can be resolved with a formal extension. We can step in to negotiate on your behalf, making sure your rights are protected while keeping the deal alive.
Enforcing Penalties or Defending Claims
If you’re a seller dealing with a buyer not closing on time, we can help enforce penalties, including keeping the earnest money or pursuing additional damages. If you’re a buyer seeking compensation for delayed closing by the seller, we can help you seek fair compensation or take legal action if necessary.
Resolving Disputes
Whether it’s miscommunication, financing issues, or failure to meet contractual obligations, we help resolve disputes before they escalate—and we’re ready to litigate if they do.
Contact Our Real Estate Lawyers In South Carolina
If you’re dealing with a delayed closing and want to know your rights or pursue compensation for a delayed closing, reach out to us at Savage, Royall & Sheheen, LLP.
We have helped clients with real estate matters for decades, and we’re ready to help you, too. Contact our real estate attorneys at 803-432-4391 to request a consultation.