Transitioning to the New Generation of Communication
Communications between parties to a real estate contract have changed significantly since the 80’s. With the ever-growing technology at our fingertips, society is moving at a faster pace than ever before. Efficiency, speed and reliability. Communication via email and facsimile can be received by another party by the click of your mouse in mere seconds. Which makes you wonder why changes to old ways had not come sooner. But now it has.
A change has come my way of the New Jersey Supreme Court ruling under Conley v. Guerrero which has changed an old rule from the 80’s regarding service of disapproval during the three-day attorney review provision of your Contract of Sale and has brought us up to speed with the new generation. Prior to New Jersey Supreme County ruling, a notice of disapproval under the three-day attorney review window must be provided by certified mail, by telegram or by delivering it personally. This mandatory clause came to be by ruling under New Jersey State Bar Association v. New Jersey Association of Realtor Boards. Given the new ruling by the New Jersey Supreme Court, notice of disapproval can be provided by fax, email, personal delivery, or overnight mail with proof of delivery. Why the change? Simple, keeping up with the times. It has been customary practice that communication between the Buyer and Seller’s real estate be handled by emails and facsimile, including disapprovals during the three-day attorney review period. I am sure counsel would not be inclined to send a telegram anytime soon to disapprove of a Contract.
In Conley v. Guerrero, a bidding war commenced at the onset of the transaction. The Seller accepted the higher bid from the Buyers. One day prior to the expiration of the three-day attorney review period, Seller’s attorney communicated with the Buyers’ attorney disapproving of the Contract via email and facsimile. The Buyers’ attorney rejected the approval stating that the disapproval was improper under the terms of the Contract, attorney review expired, and the parties were legally bound by the terms of the Contract. Buyers then filed a complaint with the Superior Court for breach of contract demanding specific performance and temporary restraining order to prevent the Seller from selling to anyone other than the Buyers. The trial court denied the Buyers’ temporary restraining order and on motion for summary judgment dismissed the complaint. On appeal, the Appellate Court affirmed the trial court’ decision confirming that actual notice to the Buyers was sufficient and the notice of disapproval was satisfied. The Court granted the Buyers’ petition for certification and determined whether the disapproval notice language as written in the Contract must be strictly enforced.
Buyers argued that the trial court and Appellate Division improperly modified the three methods of notification of approval as set forth in Bar Ass n, supra, 93 N.J.at 476, 480 encroaching on the New Jersey Supreme Courts exclusive authority to rules governing the practice of Law. That realtors and attorney alike should be left to the same standard when enforcing the strict enforcement of the terms provided for in the attorney review provision. Sellers argued common practice in real estate law has changed over the last 30 years. That actual notice of the disapproval was provided to the Buyers within the three-day attorney review period by way of email and facsimile of which such communication in real estate transactions if common practice.
It was undisputed that the Buyer received actual notice. Justice Solomon opined that if the notice of disapproval transmitted by the Seller is determined to be deficient because of the manner in which it was transmitted then it would elevate form over the protective purpose for which the attorney review provision was adopted in Bar Ass n. That the Court specifically reserved the right to modify the settlement agreement reached by in Bar Ass n. That notices by way of telegram are obsolete and faxes and emails are faster and more reliable.
The Supreme Court affirmed the Appellate Division decision wherein notices of disapproval of a real estate contract can be transmitted via fax, e-mail, personal delivery, or overnight mail with proof of delivery. As is the common practice in real estate, the ruling eases the strict enforcement of the disapproval language of the attorney review provision allowing for further modification in the future.