FACTS: The buyer and seller entered into an Arizona REALTORS® Residential Resale Real Estate Purchase Contract (“Contract”).  The buyer failed to deliver a Loan Status Update (“LSU”) to the seller within ten days as required by Section 2e of the Contract.  The seller now wants to cancel the Contract with the buyer due to the delay in delivering the LSU. 

ISSUE: Is the seller entitled to immediately cancel the Contract due to the buyer’s failure to deliver the LSU within ten days as required? 

ANSWER: No.

DISCUSSION:

The buyer’s failure to timely deliver the LSU is a potential breach of the Contract.  Pursuant to Section 7a of the Contract, the buyer has an opportunity to cure this potential breach.  Therefore, the seller must send a cure period notice to the buyer.  If the buyer cures the breach by delivering the LSU within three (3) days after delivery of the cure notice, the seller is not entitled to cancel the Contract for this delay.  If the buyer fails to deliver the LSU within the three (3) days, the buyer is in breach of Contract and the seller may cancel pursuant the Section 7b.