How to send a "Time of Essence Letter" without risking my deposit? Bank requested inspection before closing. (mortgage)

[New Jersey Home Buyer]

House was due to close on July 31 with the seller requested to remove underground oil tank and replace septic system. The bank requested inspection of the property after the repairs are done – they need at least 6 days prior to closing notice in order to send someone for inspection. Nothing was done so far by the seller.
We asked our attorney to send them a Time of Essence letter asking for a closing date of August 21 with the request that the repairs to be done by August 14- so the bank has time to inspect.
The attorney says that if they don’t finish the repairs in time for the inspection but finish them in time for closing, we cannot have the closing and will lose our deposit money. Unfortunately the law in NJ will consider a closing date as "on or about" If the closing is delayed beyond August 21 we start to loose money and I do not think this is fair. We already have to deal with the inconveniences resulted from a delayed closing date. As a plus, the mortgage rate lock will expire this month at the end and if forced to close at a higher rate we risk total loses of thousands of dollars.

Is there anything we can do? We want the house but what if they delay the repairs indefinitely?

[dmccauley]

What about getting the seller to put the money in an escrow account so you can close.

[New Jersey Home Buyer]

Originally Posted by dmccauley

What about getting the seller to put the money in an escrow account so you can close.

If you are referring to the money for removing the underground oil tank and replacing the septic, it will not work. The bank requires to inspect the property after the work was done and all the papers from the city are OK (inspections from the city).
For ex: The price to remove the oil tank is unknown. It is a huge difference if there is an oil leak in the ground or not. The price to decontaminate the ground if the tank leaked is huge.

[MaverickDD]

If your bank delay results from the Seller's delay and you can't close by the 21st, what "damages" will the Seller incur that justifies keeping your deposit? There's not a court around that will rule anything but specific performance as the remedy... and once the bank verifies that the Seller's repairs were done properly you can close.

[armx]

It is hard to understand what kind of advice the lawyer is giving? Aren't there operative contingencies in the agreement that will render the agreement null and void (due to non-performance by Seller) and return the deposit monies to Purchaser, New Jersey Buyer..... or did you outsmart yourself by not having such contingencies?

[Caro257]

Originally Posted by armx

It is hard to understand what kind of advice the lawyer is giving? Aren't there operative contingencies in the agreement that will render the agreement null and void (due to non-performance by Seller) and return the deposit monies to Purchaser, New Jersey Buyer..... or did you outsmart yourself by not having such contingencies?

Amen to that! And, what kind of lawyer tellshis own client you will loose the money if you don't have the inspection completed on time. This is B....t contingencies are very essential to the contract, the contract cen be amended as many times as possible and I'm sure this issue was mentioned at some point. Your attorney should have had the contract amended appropriately.

[JCParalegal]

Originally Posted by New Jersey Home Buyer

The attorney says that if they don’t finish the repairs in time for the inspection but finish them in time for closing, we cannot have the closing and will lose our deposit money.

That makes absolutely no sense. If the loan is contingent on the repairs being done and an the property passing inspection, then you would have your loan pulled by the lender. Loan being pulled through no fault of yours = an out under the mortgage contingency clause.

Originally Posted by New Jersey Home Buyer

We asked our attorney to send them a Time of Essence letter asking for a closing date of August 21 with the request that the repairs to be done by August 14- so the bank has time to inspect.

and

Originally Posted by New Jersey Home Buyer

The attorney says that if they don’t finish the repairs in time for the inspection but finish them in time for closing, we cannot have the closing and will lose our deposit money.

A TOE compels the seller to close, not comply with repairs and inspection. Those are issues that are dealt with separately. Issuing a TOE may have backfired on you. You are compelling the seller to close, but since your loan can't close, you are the one who is not in compliance with the TOE. See if your attorney can do an amended TOE.

Originally Posted by New Jersey Home Buyer

Unfortunately the law in NJ will consider a closing date as "on or about" If the closing is delayed beyond August 21 we start to loose money and I do not think this is fair. We already have to deal with the inconveniences resulted from a delayed closing date. As a plus, the mortgage rate lock will expire this month at the end and if forced to close at a higher rate we risk total loses of thousands of dollars.

It's totally fair. You just don't think so because it is going to cost you to extend your rate lock. Your lender, your loan, your inspection = your problem. Ask your lender if they will give you a short lock extension for free. Many lenders will grant this request.

Originally Posted by New Jersey Home Buyer

Is there anything we can do? We want the house but what if they delay the repairs indefinitely?

That really doesn't make sense at all. They are selling the property, not trying to hold on to it just so they can watch you pay for rate lock extensions.