Time Clause Addendum scenario

RealtorĀ® Legal Tip – Here’s a simple “Time Clause” Addendum refresher.

Hypothetical: Suppose the Buyer makes an offer subject to the sale of her current home. The Seller counters with the Option to Keep House on Market Time Clause addendum. The Buyer accepts. A couple weeks go by and the Seller receives a back-up offer from another buyer. The Seller notifies the first Buyer that a back-up offer has been accepted.

What are the first Buyer’s rights and obligations at this point?

Answer: In this situation, the Buyer has two choices and will have to make a decision. The Buyer can either: (1) agree in writing to remove the agreed upon contract contingencies according to section 1.2 of the Time Clause addendum, or (2) decide not to remove the contingencies and allow the REPC to automatically become canceled.

One thing to note is that if the Buyer selects option 1 above, the Buyer is taking a risk. If he does not close the transaction (even without selling his current home), he would likely be in breach of contract. Then, if the F&A and Due Diligence Conditions were also removed from the REPC as part of section 1.2 of Time Clause Addendum, the Buyer takes on even more risk by choosing to move forward by not having the benefit of those contingencies. Buyers in this situation will need to talk this through with their agent to determine what the best decision is for them.

*Note – the UAR recently released a Seller Notice to Buyer of Accepted Offer form so be sure to check that out and understand when to use it.

Courtesy of Curtis Bullock

CEO Salt Lake Board of Realtors


RealtorĀ® Legal Tip – I’ve seen the Time Clause addendum and how it works get all messed up a few times lately so here’s a quick refresher. There are tons of contingent offers right now so understanding the technical aspects of this form is crucial to successfully representing your clients.
Quick fact scenario – Suppose Buyer #1 and Seller are under contract with a Time Clause and Subject to Sale of Buyer’s Property contingency. Seller receives a back-up offer from Buyer #2 a few days later that is a cash offer and significantly better than Buyer #1’s offer.
What does the Time Clause allow the Seller to do at this point? Can the Seller simply kick out Buyer #1?
Assuming the standard UAR forms are being used here, the Seller does NOT have the ability to kick out Buyer #1. Whether Buyer #1 cancels the REPC is entirely up to Buyer #1.
Section 1.1 of the Time Clause requires the Seller to notify Buyer #1 in WRITING within a certain agreed upon amount of time that Seller has received a back-up offer. Does an email or text suffice? NO – it must be in writing. When giving this Notice, PLEASE use the Seller Notice to Buyer of Accepted Offer (Time Clause) form. Once that happens, the clock starts ticking and the Buyer has a certain amount of time to remove their contract contingencies in writing.


  1. How much time does the Buyer have to remove the contingencies? It depends on how section 1.2 of the Time Clause is filled out. Typically there is 24-72 hours.
  2. What contingencies does the Buyer have to remove from the REPC? It depends on how section 1.2 of the Time Clause is filled out. It could be the Subject to Sale of Buyer’s Property, Due Diligence, F&A, or any combination of these contingencies.
  3. How should the Buyer remove the contingencies?As long as the Notice is in writing, signed by the Buyer, and received (See section 18 of the REPC) you are good to go.
  4. Does Buyer #1 have to provide financial proof they can perform with the contingencies removed? No, unless that was previously agreed to in the REPC. However, it would be a professional courtesy if you have a letter from a lender or a financial statement that you could send the listing agent to help alleviate any concerns the Seller may have.