Jennifer contracts to purchase a house in Albany from Steven for $400,000. The contract includes a clause requiring Jennifer to obtain homeowner's insurance before closing. Three days before closing, Jennifer's insurance application is denied due to the property's proximity to a flood zone. Steven refuses to extend the closing or modify the contract. Under New York law, what is the most likely result?
Correct Answer
D) Jennifer must find alternative insurance or be in breach
The insurance requirement is typically a condition that the buyer must satisfy. Jennifer's inability to obtain standard homeowner's insurance does not automatically discharge the contract. She must either find alternative insurance (such as flood insurance through NFIP) or be in breach of the contract condition.
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Related Topics & Key Terms
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Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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Previous Question
Under New York's Statute of Frauds, which signature requirement must be met for a real estate purchase contract to be enforceable?
Next Question
Carlos enters into a contract to purchase a condominium in Brooklyn. The contract states that Carlos will receive 'insurable title' rather than 'marketable title.' At closing, the title company discovers a minor lien that would prevent them from issuing a standard title insurance policy. Under New York law, can Carlos refuse to close?