“Time of the Essence” in New York Real Estate Contracts: What Sellers Need to Know

In New York real estate transactions, deadlines matter—but not all deadlines are created equal. One phrase that often appears (or is deliberately excluded) from residential contracts is “time of the essence.” This legal term carries significant implications for both buyers and sellers, especially when closing delays arise.

As a seller in Queens or anywhere in New York, it’s essential to understand what a “time of the essence” clause means, when it becomes enforceable, and how it can be used to protect your interests—or, if misunderstood, derail your deal.

What Does “Time of the Essence” Mean?

“Time of the essence” is a legal term that makes a specified date in a real estate contract strictly enforceable. If the party responsible (usually the buyer) does not perform by that exact date, they may be considered in default, and the other party can cancel the contract and seek legal remedies.

Without this clause, the scheduled closing date is considered approximate and courts generally allow reasonable extensions unless one party is materially harmed by the delay.

Why Does It Matter for Sellers?

As a seller, you may want to invoke a “time of the essence” closing when:

• The buyer has delayed the closing beyond a reasonable period.
• You need certainty in order to close on a purchase of your own.
• Market conditions have changed and you want to enforce the original agreement before further delays reduce your leverage.

Once a buyer has failed to close on time and no time of the essence notice has been issued, they may still be able to complete the deal without consequence. However, issuing a proper “time of the essence” notice sets a clear, legally binding deadline—and gives you recourse if the buyer does not perform.

How Is “Time of the Essence” Enforced?

To make a closing date “time of the essence,” the seller (through their attorney) must:

1. Issue a written notice to the buyer’s attorney.
2. State a new closing date that is reasonable (typically at least 10 business days out).
3. Clearly indicate that the new date is “time of the essence” and failure to close will be deemed a default.

The notice must be delivered properly and in good faith. Courts may refuse to enforce the clause if the notice is unreasonably short or issued in a coercive or manipulative manner.

What Happens if the Buyer Fails to Close?

If the buyer does not close on the “time of the essence” date, the seller has several options:

• Cancel the contract and retain the buyer’s down payment as liquidated damages (if the contract allows).
• Pursue legal action for breach of contract.
• Put the property back on the market and negotiate with a new buyer without legal entanglements.

That said, courts closely scrutinize time of the essence enforcement, and sellers should not attempt to invoke it without legal guidance.

Best Practices for Sellers

• Consult your attorney before attempting to enforce a “time of the essence” closing.
• Maintain a clear paper trail of all extensions and communications.
• Anticipate buyer delays and prepare for possible renegotiations or backup offers.
• Use the clause as leverage, not retaliation—it is a strategic tool, not a punishment.

Conclusion

In a real estate transaction, timing is everything—but only when it’s legally enforced. A “time of the essence” clause gives sellers the ability to draw a clear line in the sand and hold buyers accountable. However, it must be used carefully, strategically, and in compliance with New York real estate law.

If you’re selling a property in Queens, or anywhere in New York for that matter, and your buyer has delayed closing, speak with an experienced real estate attorney to determine whether issuing a “time of the essence” notice is the right move—and how to do it effectively.