What happens to my purchase and sale agreement when the closing date has to be moved for permit delays? – North Carolina

Short Answer

In North Carolina, moving a closing date is a contract change that typically requires a written addendum signed by buyer and seller. Many residential contracts also contain a short, built-in grace period to complete settlement if all parties are acting in good faith, but that window is limited. Permit delays usually do not automatically excuse performance unless the contract makes them a contingency. Any invoices to be paid from closing proceeds are disbursed only after documents are recorded and funds are collected under North Carolina’s Good Funds Settlement Act.

Understanding the Problem

The issue is whether a North Carolina real estate purchase agreement remains enforceable and how it changes when the parties must move the closing date because required building permits are not yet issued. The actor is the contracting buyer and seller; the action sought is an extension of the settlement/closing date; the trigger is a permit approval delay from the permitting office. The question is: can the closing date be shifted without breaching the contract, and what must occur to keep the deal on track?

Apply the Law

Under North Carolina law, contracts for the sale of real property must be in writing and signed, and material modifications—like changing the settlement date—should also be written and signed. Unless the contract states that “time is of the essence” for closing, North Carolina law generally allows reasonable flexibility, but most residential forms address this directly with a defined delay/extension mechanism. Separate from contract timing, the Good Funds Settlement Act governs when a settlement agent may disburse closing funds, including payment of professional invoices from proceeds: disbursement may not occur until recording and receipt of collected funds.

Key Requirements

• Written modification: Changing the closing/settlement date is a material term; use a signed written addendum.
• Contract delay/extension terms: Follow any built-in grace period or notice steps in the contract; if more time is needed, use a negotiated addendum.
• Permit contingency: Permit approvals affect closing only if the contract conditions closing on them; otherwise, seek an agreed extension.
• Good Funds rule: The settlement agent cannot disburse from proceeds (including invoices) until documents record and funds are collected.
• Recording first: Deed and deed of trust must be recorded with the Register of Deeds before funds are disbursed; wires are typically treated as collected funds the same day.

What the Statutes Say

• North Carolina Gen. Stat. § 22-2 (Statute of Frauds for land contracts) – Agreements for the sale of land must be in writing and signed.
• North Carolina Gen. Stat. § 45A-4 (Good Funds Settlement Act—no disbursement before recording/collected funds) – Settlement agent may not disburse until recording and receipt of collected funds.
• North Carolina Gen. Stat. § 45A-5 (Definitions, including collected funds) – Defines “collected funds” and related terms for closings.

Analysis

Apply the Rule to the Facts: Here, the closing was postponed because permit approvals are still pending. That change to the settlement date should be documented by a signed addendum, unless the contract’s delay clause still covers the rescheduled date. Permit delays do not by themselves excuse performance unless the contract makes permits a condition of closing, so an agreed extension is the cleanest path. The plan to pay the law firm’s invoice from proceeds will occur after the settlement agent records the deed and receives collected funds under the Good Funds rule.

Process & Timing

1. Who files: Buyer and seller (through their brokers or closing attorneys). Where: Via the settlement agent/closing attorney handling the transaction in the North Carolina county where the property is located (recording at the county Register of Deeds). What: A written contract addendum extending the settlement/closing date and, if needed, clarifying any permit-related condition. When: Execute the addendum before the original settlement date or within any contractual delay window.
2. Settlement agent coordinates updated lender figures, payoffs, HOA statements, and tax prorations; signing occurs on the new date; the agent submits deed and deed of trust for recording. eRecording and recording cut-off times vary by county and can affect same-day disbursement.
3. After the deed and deed of trust are recorded and funds are collected (wires typically same day; checks may add time to clear), the settlement agent disburses proceeds, including any agreed invoice from closing funds, and issues final closing statements.

Exceptions & Pitfalls

• “Time is of the essence” for closing: If the contract makes closing time-critical, missing the date can be a breach without a negotiated extension.
• Oral extensions: Relying on verbal promises to move closing risks enforceability under the Statute of Frauds; use a signed addendum.
• Permit not a contingency: If the contract does not condition closing on permits, the delay needs an agreed extension or the parties must otherwise resolve performance.
• Funding method: Using certified or personal checks can delay disbursement under the Good Funds Act; wires usually count as collected funds faster.
• Recording logistics: Register of Deeds holiday/closure or eRecording cut-offs can push recording (and thus disbursement) to the next business day.
• Lender and payoff timing: Rate locks, per diem interest, and HOA or tax certifications may expire; build in time to update figures when closing moves.

Talk to a Real Estate Attorney

If a closing date must shift due to pending permits and there are questions about extensions, contingencies, or disbursements, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.