FACTS: After the buyer and seller entered into an AAR Residential Resale Real Estate Purchase Contract for the property, the Small Business Administration (SBA) filed a lien against the property.  The seller does not have the funds to satisfy the SBA lien. 

ISSUE: What are the buyer’s options if the seller cannot close escrow due to the SBA lien?

ANSWER: See discussion. 

DISCUSSION:

If the seller does not close escrow on the close of escrow date, the buyer may issue a Cure Period Notice pursuant to Section 7(a) of the contract.  If the seller does not close escrow within three days after the buyer issues the Cure Notice, the seller is in breach of contract and the buyer may cancel the contract and/or proceed against the seller for specific performance or damages subject to the Alternative Dispute Resolution obligations set forth in the contract (See, Section 7(c)).