What is a ‘Cure Period’ ? : The Arizona real estate purchase contract is unique any material breach of the contract requires a notification by the nonbreaching party, a written notification giving the nonbreaching party in opportunity to cure the breach or render the contract subject to cancellation.
Section 7 of the new AZ real estate purchase contract provides that the non-breaching party provide in writing a 3-day Cure Period Notice to the party in breach. what does this mean?
Essentially, all critical dates have a built-in three-day extension. Though, this is not a legal interpretation but a functional one. For example, if close of escrow is on March 1 and one of the parties does not sign and close escrow by midnight of that day, the non-breaching party must issue a three-day sure notice indicating that the breaching party must fix the bridge or the contract would be canceled. Importantly, the notice cannot be delivered until the breach and begins three days after delivery of the notice, three calendar days.
Other breaches may include, but are not limited to depositing earnest money, providing the buyer access to the house for inspections, and delivery of a seller property disclosure statement.
However, there are certain time-lines in the Arizona real estate contract that are not necessarily breaches. For example, if you do not if the buyer does not deliver the seller a buyer inspection notice within the 10 day inspection period; That failure of notice is deemed buyer’s agreement to move forward; it is not a breach.
The three-day cure notice provision is an integral part of how you as a buyer or as a real estate seller negotiate the contract. Make sure your real estate agent, your Realtor are prepared to issue the appropriate rate in Cure Notice if those critical dates are important to you. For example, as a listing agent I do not recommend removing the three-day cure notice provision unless there is a cash offer on the table in which case the buyer should be prepared to close purchase commitment as a cash offer. However, financing a mortgage for real estate purchase in this market is a challenge. As a result, it may be unreasonable possibly unfair to put such a demand on a buyer. Though, in some cases a per-diem charge such as $50 per day every day past scheduled close of escrow might be reasonable.
As a buyer’s agent, I will not accept any offers removing cure period notices or limitation on dates and time-lines as permitted in the contract unless there is a significant advantage in terms of favorable purchase price or seller financing terms.
The language regarding Cure notices and breach of contract as it pertains to the Arizona real estate purchase contract are outlined on page 6 of the new at the bottom of page 7 line 272 through 285.
If you would like a copy of the new Arizona real estate purchase contract please e-mail me : DanWexler@Hotmail.com or call me anytime to discuss the real estate contract further at 480-200-9097. Have a great weekend
Daniel J Wexler, Phoenix AZ real estate consultant
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To me the cure period also inforces urgency in so many regards. I think it is the one card that if played, people typically recact, quickly.