Escrow & Title
A Connecticut closing is delayed because the buyer's lender needs additional time to process the loan. The 'time is of the essence' clause in the contract has passed. The seller is not required to extend. The buyer asks the seller for a 7-day extension. The seller:
AMust grant the extension since the buyer's lender is at fault
BMay agree to the extension or declare the buyer in default; if declaring default, the seller may retain the earnest money or sue for damages✓ Correct
CMust return the earnest money if they refuse to extend
DMust extend since the delay was caused by the lender, not the buyer
Explanation
If the contract has a 'time is of the essence' clause and the buyer has not closed by the deadline, the seller has the right to declare the buyer in default. The seller may choose to extend as a courtesy, but is not obligated to do so. If the seller declares default, they may retain the earnest money or sue for additional damages.
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