You asked for an analysis of Connecticut General Statute § 47-33a, Action on Agreement to Sell Real Estate, under the following scenarios: (1) as written, (2) with the clause "time is of the essence," and (3) with and without a date to determine when the agreement first becomes invalid.

This office is not authorized to issue legal opinions and this memorandum should not be considered as such.

SUMMARY

As written, the statute invalidates a real estate executory agreement either (1) one year and a day after the date specified in the agreement, (2) 18 months and a day after the date the agreement is signed, or (3) one day after the expiration of any extension period.

An agreement that contains a "time is of the essence" clause without more explicit language is invalid after a reasonable time when a lawsuit to enforce it seeks specific performance. Strict compliance with such a clause may be required when the suit to enforce it seeks monetary damages.

The courts have interpreted agreements both with and without a fixed date to require performance within a reasonable time. Thus, an agreement with or without a fixed date is invalid if the delay in performance is "unreasonable. " The court determines what is and is not reasonable based on the intention of the parties and the surrounding circumstance.

THE STATUTE

CGS § 47-33a states, "no interest in real property existing under an executory agreement for the sale of real property or for the sale of an interest in real property or under an option to purchase real property shall survive longer than one year after the date provided in the agreement for the performance of it or, if the date is not so provided, longer than eighteen months after the date on which the agreement was executed, unless the interest is extended as provided herein or unless action is commenced within the period to enforce the agreement and notice of lis pendens is filed as directed by section 52-325. "

As Written

An executory agreement for the sale of real property expires one year and a day from the date specified in the agreement or 18 months and a day from the date it was signed. If the agreement is extended, it expires one day after the extension or new agreement's period ends.

A lawsuit to enforce an executory agreement for the sale of real estate must be filed either (1) within one year of the date specified in the agreement or (2) if no date is specified, within 18 months of the date the agreement is signed.

With respect to the 18-month requirement, the statute provides two exceptions to the expiration period. The first is when the agreement is extended by re-execution or by execution of a new agreement that is recorded on the land records in the town where the real property is located. The second is when a lawsuit is brought within the 18-month period and written notice about the pending lawsuit is recorded on the land records in the town when the real property is located.

Time is of the Essence

A "time is of the essence" clause standing alone does not require strict compliance; a reasonable delay is permissible because the court in equity has discretion to determine whether a delay in performance is a material breach of the contract.

At common law, there was a presumption that time was of the essence in any contract, so that any delay constituted material breach. Today, this is no longer the rule.

Generally, in a lawsuit for damages (i. e. , a suit brought at law rather than in equity), the time stated in the contract will be deemed to be of the essence, unless a contrary intention appears.

But in a suit in equity (i. e. , a suit for specific performance), the general rule is that time is not of the essence, unless either: (1) the contract contains an express provision making time of the essence, or (2) such a provision is to be implied from the nature of the property or the surrounding circumstances. This means that, generally, even though the contract specifies a particular date for the closing, either party may obtain specific performance although he is unable to close on the appointed day.

The parties to a contract are free to make performance by a certain time an express condition of their agreement, in which case the rule requiring strict compliance with express conditions apply. However, a slight delay will not be considered a material breach solely on the grounds that the contract contains a "time is of the essence" clause. Either the parties must use expressly conditional language (e. g. , the buyer shall have no duty to pay for the land unless the seller delivers a marketable title on or before March 4^th), or the circumstances surrounding the agreement must indicate that performance by March 4^th is vital.

In a recent zoning case the court states, "if it is stipulated that time is of the essence, or circumstances are persuasive that that is the case, prompt performance is essential (Bethlehem Christian Fellowship, Inc. vs Planning and Zoning Commission of Town of Morris, 755 A. 2nd 249, 58 Conn. App. 441).

Specific Date

A delay in performance will generally constitute a material breach only if it operates to significantly deprive the other party of the benefit of the contract.

In Sternberg vs Infante, 537 A. 2d 523, 13 Conn. App. 473, the court states, "purchasers' one-day delay in signing real estate contract was not so unreasonable as to constitute breach by purchaser of binding agreement. Phrase `time is of the essence' did not appear in the binder agreement and the fact that date certain was fixed in agreement for signing of real estate contract did not make contract one requiring time of the essence. "

In the Bethlehem case the court indicates that where the time fixed in the contract for closing title is regarded as a formality only and that period has gone by, that time may nevertheless be made of the essence by formal demand that title be closed by a given day. But the time given must be reasonable. The fact that a contract sets a date for closing the transaction does not of itself make the contract one where time is of the essence.

Without a Specific Date

In a real estate sales contract that does not fix any time for performance, the law assumes that the parties intended performance to occur within a reasonable time.

Similarly, if a writing omits to state when an agreement for the sale of realty is to be performed, and it appears that the parties in making the contract failed to agree on that matter, the law raises a presumption that the contract be performed within a reasonable time.

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