B. Real Property Contracts

Question 1

What is required for real property sale contract?*

Answer 1

1) In writing
2) Signed by party to be charged/lawful agent

3) Relevant material terms
- Purchase price
- Description
- Party’s name
- Date of transfer title

Question 2

What must Seller disclose prior to real property sale?*

Answer 2

NO duty to disclose info (Caveat Emptor)

EXCEPTIONS

a) Property Condition Disclosure Statement
- ONLY for residential family dwellings (1-4 individuals)
- Seller must disclose through actual knowledge of defect condition on Seller’s part
- To Buyer/Buyer’s agent before signing contract
- Otherwise Buyer receives $500 credit at closing

b) Housing Merchant Implied warranty
- New constructed home
- Builder implies home will be free of ‘material’ defects
- 6 years from closing

c) Active concealment
- Seller’s conduct rises to level of active concealment (more than mere silence)
- Seller must disclose info re property

Question 3

What are the parties’ rights if legal title/possession is NOT transferred to Buyer?*

Answer 3

If ALL/material part of property is destroyed/taken + Buyer is NOT at fault;

• Seller can NOT enforce contract
• Buyer can recover any portion of price paid

If immaterial part of property is destroyed/taken;

• Seller/Buyer can enforce contract
• Purchase price will be abated

Question 4

What are the parties’ rights if legal title/possession is transferred to Buyer?*

Answer 4

Buyer bears loss

- Between time contract was entered + property conveyance