What is a “Business Day” in the world of real estate? It depends on whom you talk to and the subject of discussion.
The typical definition of the business day:
Specific days when normal business transactions are taking place. It can vary by region, but usually means any day except Saturday, Sunday, or a holiday.
The Texas Administrative Code Section 153.1(2) defines a business day as it pertains to home equity loans. Closings must take place and notices must be given on what they determine to be a business day. This rule says a business day is:
… “all calendar days except Sundays and these federal legal public holidays: New Year’s Day, the Birthday of Martin Luther King, Jr., Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.”
When calculating days, tomorrow is considered Day One. If today is Tuesday and a document is due in three days; then Wednesday is Day One, Thursday is Day Two and Friday is Day Three – the due date.
Then there are the exceptions. Sometimes if a holiday falls on a weekend, the business holiday is considered to be the following Monday. But not always. It seems like most companies wing it and decide if or when they recognize a weekend holiday.
Within the banking and financial industry, a business day is typically Monday through Friday, but it could include Saturday. When it comes to issuing funds for a purchase or paying off a mortgage, Saturdays are not business days. When it comes to disclosures to meet TRID guidelines, Saturday counts as a business day.
TRID stands for TILA RESPA Integrated Disclosures. TRID rules dictate the time in which a mortgage lender must disclose information to a borrower. Basically, a lender must provide a borrower with a closing disclosure at least three business days before they sign their loan.
Oddly, business days are not defined by business hours. Two business days are not 48 hours. I can send you documents at 11:59 p.m. on a business day and it would count as delivered that day.
Contracts Are Different
When it comes to Texas real estate contracts, the days are counted as calendar days, not business day. If a seller, buyer or title company has a set number of days to deliver a notice or documents, then it is the actual number of days that count. Business and holidays don’t matter.
If a property has a mandatory homeowners association, the contract stipulated how many days the seller has to deliver HOA documents to the buyer. These are calendar days as well, not business days. HOA management companies in Texas have 10 business days to deliver documents once the fees are paid. This can get confusing for some folks. The contract might say 10 calendar days for delivery, but the HOA company would have 10 business days for delivery. It is important to pay attention to these details if you don’t want to miss a deadline or pay a rush fee.
Title Companies May Be Different
Many title companies are open only when banks are open. The fund or payoff of a loan only takes place when the financial institution is open. However, there is no law that says title companies must be open or closed on particular days. My office is open Monday through Friday and for MLK Day and Columbus Day. We close for Good Friday. Although in the world of real estate, some kind of business is occurring every day.