(They are not the Same)
While seasoned agents and real estate professionals might find the distinction between the “Acceptance Date” of a contract, and the “Effective Date” of a contract, to be clear and obvious, for those agents and real estate professionals new to the industry, the terms may “appear” to be the same, but they are not.
Under basic contract law principles, a buyer makes an “offer” to purchase real estate, and if the offer is “accepted” by the seller, the parties have just formed a Contract. Not so fast, however. In most Florida localities, agents are working with either the FR/BAR Residential Contract For Sale and Purchase, or the “AS IS” Residential Contract For Sale and Purchase (approved by The Florida Realtors and The Florida Bar, version (6/19) © 2017). It is by and through one of these contracts that a buyer will make an “offer”. The “offer” will contain many terms and provisions to be considered by the Seller in reaching a decision on whether to “accept”, “reject”, or make a “counter-offer”.
Some of those terms can be found in Paragraph 3. TIME FOR ACCEPTANCE OF OFFER AND COUNTER-OFFERS; EFFECTIVE DATE in both the “AS IS” and the “Standard” FR/BAR Contracts (Lines 43-49). This section of the contract specifically deals with “Acceptance” and “Effective Date”:
43 3. TIME FOR ACCEPTANCE OF OFFER AND COUNTER-OFFERS; EFFECTIVE DATE:
44 (a) If not signed by Buyer and Seller, and an executed copy delivered to all parties on or before
45 _____________________, this offer shall be deemed withdrawn and the Deposit, if any, shall be returned to
46 Buyer. Unless otherwise stated, time for acceptance of any counter-offers shall be within 2 days after the day
47 the counter-offer is delivered.
48 (b) The effective date of this Contract shall be the date when the last one of the Buyer and Seller has signed or
49 initialed and delivered this offer or final counter-offer (“Effective Date”)
In order for there to be a valid and binding contract, there must be an offer made by the buyer, and an acceptance by the seller. The date that the seller accepts the buyer’s offer is the “Acceptance Date”. However, under the terms of the Contract, it is not deemed enforceable until the fully signed Contract is delivered to all the parties. In order for the Contract to be “Effective” (and enforceable), it must be signed by Buyer and Seller AND delivered to all parties. The date that the last one of the Buyer and Seller signs the Contract (usually the Seller), and delivers the fully signed Contract to all the parties is the “Effective Date”.
The “Acceptance Date” is not nearly as important as the “Effective Date” because many of the Deposit, Due Diligence, delivery of lease copies [if applicable], Loan Approval Period, Title Commitment, Survey, Flood Insurance Notice, and Inspection Period, time periods are calculated based on the “Effective Date”.
So, the moral of this story is to know the difference between the Acceptance Date and the Effective Date, and pay very close attention indeed to the “Effective Date”.
Should you have any questions or concerns with regard to offer and acceptance, and the Effective Date of a contract, we urge you to contact or consult with your local real estate attorney, for additional guidance.
Mark C. Hanewich, Esq. email@example.com
Berlin Patten Ebling, PLLC
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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