The Notice to Perform, Explained

Why the notice exists at all

California runs on an active contingency system. Under the Residential Purchase Agreement, deadlines passing does not remove contingencies and does not end the deal; a contingency survives until it is removed in writing. That design protects buyers from losing rights by accident, but it leaves sellers needing a tool when a buyer sits on their contingencies past the agreed date. The notice to perform is that tool. It is the contract's way of saying: the deadline has arrived, act within the window or you hand me the right to cancel.

The seller's version, the NBP, can demand two kinds of action. The first is removing a contingency, or cancelling. The second is performing a contractual obligation: delivering the deposit, providing the verification of funds or the preapproval letter, returning signed statutory disclosures, or signing the separate liquidated damages form for an increased deposit. The buyer's version, the NSP, works the same way in reverse, typically demanding that a seller deliver required disclosures and reports or perform other obligations the contract assigns to them.

The two day window, and the two day limit on sending it early

The standard form gives the receiving party at least two days after delivery to perform, with days counted as calendar days under the contract's rules. The blank can be negotiated longer, never shorter than the printed minimum.

Just as important, the notice cannot be sent early. An NBP may not be delivered more than two days before the deadline it is based on. A seller who fires one off on day five of a 17 day investigation contingency has delivered a void notice. A notice that is premature, or that gives less time than the minimum, does not start the clock. The forms are precise about this because the courts are: a defective notice can unwind a cancellation months later, after everyone has moved on, which is an expensive way to learn the timing rules.

What actually happens when the clock runs out

Here is the part most people get wrong: nothing cancels automatically. If the window closes and the buyer has not performed, the seller gains a right to cancel. Exercising that right requires a separate written cancellation, delivered to the buyer. Until that cancellation is actually delivered, the buyer can still perform. A buyer who signs and delivers the contingency removal the morning after the window closed, before the seller has delivered a cancellation, has generally cut off the seller's right to cancel on that ground.

The same logic protects buyers on the other side. A seller cannot simply cancel because a contingency deadline passed. Without a valid notice to perform first, a seller's cancellation over unremoved contingencies is procedurally defective, and a wrongful cancellation exposes the seller to a breach of contract claim, including the possibility of specific performance, the remedy that forces the sale to completion.

A separate notice handles the end of the transaction: when the problem is a party failing to close escrow on time, the contract requires a demand to close escrow rather than a notice to perform, with its own three day minimum. That document has its own guide: the demand to close escrow.

Leverage, not litigation

In practice, the overwhelming majority of notices to perform never lead to cancellation. They lead to decisions. Escrows drift: an inspection report arrives late, a lender drags on underwriting, a buyer hesitates. The notice compresses that drift into a short window with a defined consequence, which is usually exactly what the transaction needs. Buyers respond by removing contingencies, by negotiating repairs or credits quickly, or occasionally by cancelling and recovering their deposit, which is a legitimate response the notice itself invites.

That last point deserves emphasis, because it is the notice's double edge. While an NBP is pending, the buyer's contingencies are still alive. A seller who sends one hoping to shake a hesitant buyer into removing contingencies may instead receive a cancellation and an instruction to return the deposit. Sellers should send a notice to perform when they are genuinely prepared for either answer, and ideally when a backup position exists. Nothing in the contract prevents a seller from accepting backup offers while a notice is pending, and a written backup offer is the thing that makes the notice credible.

For buyers, the right response to an NBP is rarely panic and rarely defiance. It is a fast, honest assessment with your agent and your lender: is the loan actually on track, did the inspections surface anything that changes the price, is there a reason to ask the seller for more time in writing rather than letting the window run. Sellers grant written extensions constantly when the underlying deal is sound. What they do not forgive is silence.

A note on form and tone, because both carry legal weight. The notice must be in writing on the proper form, delivered the way the contract defines delivery; a phone call, a text, or an agent's exasperated email is not a notice to perform and starts no clock. Equally, receiving a valid notice obligates nobody to respond in kind. The best agents answer a notice with a plan: a dated commitment from the lender, a signed removal, or a written extension request with a reason attached.

If cancellation happens, the deposit has its own rules

A cancellation, from either side, does not by itself move the money. Escrow releases the deposit only on instructions signed by both parties, which is why the cancellation form doubles as a release of deposit. California law discourages hostage taking here: under Civil Code section 1057.3, a party who refuses in bad faith to sign release instructions within 30 days of written demand is liable for the wrongfully withheld amount, a statutory penalty of up to one thousand dollars, and attorney's fees. There is a safe harbor for genuine disputes, but "I am annoyed" is not a genuine dispute. The mechanics of cancellation and deposit fights are covered in the demand to close and cancellation guide, and the money's path through closing lives in the escrow guide.

Common Questions

I received a notice to perform. Do I have to remove my contingencies now?

You have to choose, within the window, among three honest options: remove the contingencies and proceed, negotiate something in writing such as an extension or a credit, or cancel under your live contingencies and generally recover your deposit. The notice does not take away the third option; it exists to force the choice.

What happens if the buyer ignores a notice to perform?

When the window closes, the seller earns the right to cancel, and must still exercise it by delivering a written cancellation. Until that delivery, the buyer can still perform. After it, the transaction unwinds and the deposit is handled through mutual release instructions.

Does a notice to perform mean my deal is dead?

Usually the opposite. Most notices are schedule discipline, sent to compress a drifting escrow. Deals that are fundamentally sound almost always survive them; the notice simply converts an open ended delay into a decision.

Can the seller cancel escrow without sending a notice to perform?

Not for unremoved contingencies or the contractual obligations the notice covers. The contract requires a valid notice first, with a valid window, before a cancellation right exists on those grounds. A seller who skips the step risks the cancellation being invalid and the liability that follows.

Is sending a notice to perform a hostile move?

It reads that way the first time you see one, but in Los Angeles practice it is routine. Agents on both sides understand it as a deadline enforcement tool. Tone matters, though: a notice paired with a phone call explaining the seller's constraint keeps deals together far better than a notice sent cold.

Can a seller take backup offers while a notice to perform is pending?

Yes. Backup offers are written to activate only if the first contract is cancelled in writing, and a pending notice is precisely when sellers line one up. Buyers in contract should assume this is happening and act accordingly.

Timing disputes are where otherwise smooth transactions go sideways, and they are almost always avoidable with a calendar, candor between agents, and paperwork done in the right order. I track every contractual deadline for my clients from acceptance to closing.