Can a seller who did not deliver a TDS to the buyer in an all-cash transaction for a mixed-use property refuse to extend escrow so the buyer can obtain a purchase assist mortgage to fund closing?

Nasey v. Fell Holdings LLC

Facts: A buyer and seller of a mixed-use property containing commercial units and a residential unit enter into a purchase agreement for a cash sale without a financing contingency. The seller does not provide a transfer disclosure statement (TDS). The buyer does not exercise their right to cancel and instead proceeds to closing. To close escrow, the buyer lacks cash and needs mortgage financing from a lender which requires an invasive environmental assessment. The seller refuses to permit the invasive inspection. The buyer is unable to close escrow, and the seller refuses to extend the date for escrow to close.

Claim: The buyer claims they are entitled to an extension of escrow since the seller failed to provide a TDS which is required for a property containing a single family residence (SFR) and cannot be waved.

Counterclaim: The seller claims the buyer is not entitled to an extension since the buyer chose not to exercise their right to cancel for lack of delivery of the seller’s TDS and proceeded toward closing escrow by attempting to secure mortgage financing without a financing contingency in the purchase agreement.

Holding: A California appeals court holds a buyer is not entitled to an extension after a seller fails to deliver a TDS since the buyer waived their right to cancel for lack of delivery of the TDS and instead pursued mortgage financing to fund the close of escrow when the sale was not contingent on the buyer obtaining financing. [Nasey v. Fell Holdings LLC (2026) 122 CA5th 509]

Nasey v. Fell Holdings LLC

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