Do I Need a Sales Contract to Buy Land or is a Deed Enough?
Full Question:
Answer:
A contract of sale is used to specify the terms of the sales transaction. It is important to have the terms of a real estate sale in writing, as oral agreements for land sales generally aren't enforceable. It is also advised to have do a title search to make sure there aren't any claims on the property so you can get clear title. The forms offered by USLegal may be modified to suit your needs. The real estate sales package includes a sales contract, disclosure statements, and a purchase offer.
A deed is the written document which transfers title (ownership) or an interest in real property to another person. The deed must describe the real property, name the party transferring the property (grantor), the party receiving the property (grantee) and be signed and notarized by the grantor. In addition to the signature of the grantor(s), deeds must be acknowledged to be recorded and acceptable as evidence of ownership without other proof. A valid deed must be delivered and accepted to be an effective conveyance. Most states assume delivery if the grantee is in possession of the deed. The deed also must be accepted by the grantee. This acceptance does not need to be shown in any formal way, but rather may be by any act, conduct or words showing an intention to accept such as recording the deed. To complete the transfer (conveyance) the deed must be recorded in the office of the county recorder or recorder of deeds in the county in which the real estate is located.
There are many situations in which it may be desirable to add or delete a person's name from a deed, such as adding or removing a spouse, child or sibling. A person can only be deleted from a deed with their approval, i.e., they must execute the deed (sign and have their signature notarized). A quit claim deed is often used between family members when there is no doubt as to the ownership or claims on the property.
There are two basic types of deeds: a warranty deed, which guarantees that the grantor owns title, and the quitclaim deed, which transfers only that interest in the real property which the grantor actually has. The only type of deed that creates "liability by reason of covenants of warranty" as to matters of record is a general warranty deed. A quit claim deed contains no warranties and the seller doesn't have liability to the buyer for other recorded claims on the property. The purchaser takes the property subject to existing taxes, assessments, liens, encumbrances, covenants, conditions, restrictions, rights of way and easements of record. However, a person who obtains a mortgage is still liable for mortgage payments after executing a quit claim deed on the property securing the mortgage. The quitclaim is often used among family members or from one joint owner to the other when there is little question about existing ownership, or just to clear the title.
Joint tenancy is a form of ownership by two or more individuals together. It differs from other types of co-ownership in that the surviving joint tenant immediately becomes the owner of the whole property upon the death of the other joint tenant. State law, which varies by state, controls the creation of a joint tenancy in both real and personal property. Joint tenancy property passes outside of probate, however, it may be severed so that the property becomes part of one person's estate and passes to that person's heirs. A joint tenancy between a husband and wife is sometimes known as a tenancy by the entirety. Tenancy by the entirety has some characteristics different than other joint tenancies, such as the inability of one joint tenant to sever the ownership and differences in tax treatment. In some jurisdictions, to create a tenancy by the entirety the parties must specify in the deed that the property is being conveyed to the couple "as tenants by the entirety," while in others, a conveyance to a married couple is presumed to create a tenancy by the entirety unless the deed specifies otherwise. Each joint tenant has an equal, undivided interest in the whole property. All joint tenants, and their spouses, must sign deeds and contracts to transfer or sell real estate. A joint tenant may convey his or her interest to a third party, depending on applicable state law. This conversion would in effect terminate the joint tenancy and create a tenancy in common.
Tenants in common hold title to real or personal property so that each has an "undivided interest" in the property and all have an equal right to use the property. Tenants in common each own a portion of the property, which may be unequal, but have the right to possess the entire property. There is no "right of survivorship" if one of the tenants in common dies, and each interest may be separately sold, mortgaged or willed to another. A tenancy in common interest is distinguished from a joint tenancy interest, which passes automatically to the survivor. Upon the death of a tenant in common there must be a court supervised administration of the estate of the deceased to transfer the interest in the tenancy in common.
In the case of a life tenant who holds a life estate, when the life tenant dies, their interest may pass to the remaindermen. Title may also return to the person giving or deeding the property or to his/her surviving children or descendants upon the death of the life tenant--this is called "reversion."
We can assist you with searching to locate forms or we can draft add forms you may need to our database. However, we cannot advise you to use one particular form over another that address the same matter. We can show you what is available. You can take a look at the forms and see if they fit your need. If they do not, let me know and we may be able to add a form for your needs.
The following are VA statutes:
§ 55-517. Applicability. —
The provisions of this chapter apply only with respect to transfers by
sale, exchange, installment land sales contract, or lease with option to
buy residential real property consisting of not less than one nor more
than four dwelling units, whether or not the transaction is with the
assistance of a licensed real estate broker or salesperson. For the
purposes of this chapter, a "real estate contract" means a contract for
the sale, exchange, or lease with the option to buy residential real
estate subject to this chapter.
§ 55-519. Required disclosures. —
With regard to transfers described in § 55-517 of this
chapter, the owner of the residential real property shall
furnish to a purchaser a residential property disclosure
statement in a form provided by the Real Estate Board
stating that the owner makes the following representations
as to the real property:
1. The owner makes no representations or warranties as to
the condition of the real property or any improvements
thereon, and purchasers are advised to exercise whatever due
diligence a particular purchaser deems necessary including
obtaining a certified home inspection, as defined in
§ 54.1-500, in accordance with terms and conditions as may
be contained in the real estate purchase contract, but in
any event, prior to settlement on a parcel of residential
real property;
2. The owner makes no representations with respect to any
matters that may pertain to parcels adjacent to the subject
parcel and that purchasers are advised to exercise whatever
due diligence a particular purchaser deems necessary with
respect to adjacent parcels in accordance with terms and
conditions as may be contained in the real estate purchase
contract, but in any event, prior to settlement on a parcel
of residential real property;
3. The owner makes no representations to any matters that
pertain to whether the provisions of any historic district
ordinance affect the property and purchasers are advised to
exercise whatever due diligence a particular purchaser deems
necessary with respect to any historic district designated
by the locality pursuant to § 15.2-2306, including review of
any local ordinance creating such district or any official
map adopted by the locality depicting historic districts, in
accordance with terms and conditions as may be contained in
the real estate purchase contract, but in any event, prior
to settlement on a parcel of residential real property;
4. The owner makes no representations with respect to
whether the property contains any resource protection areas
established in an ordinance implementing the Chesapeake Bay
Preservation Act (§ 10.1-2100 et seq.) adopted by the
locality where the property is located pursuant to
§ 10.1-2109 and that purchasers are advised to exercise
whatever due diligence a particular purchaser deems
necessary to determine whether the provisions of any such
ordinance affect the property, including review of any
official map adopted by the locality depicting resource
protection areas, in accordance with terms and conditions as
may be contained in the real estate purchase contract, but
in any event, prior to settlement on a parcel of residential
real property;
5. The owner makes no representations with respect to
information on any sexual offenders registered under
Chapter 23 (§ 19.2-387 et seq.) of Title 19.2 and that
purchasers are advised to exercise whatever due diligence
they deem necessary with respect to such information, in
accordance with terms and conditions as may be contained in
the real estate purchase contract, but in any event, prior
to settlement pursuant to that contract;
6. The owner represents that there are no pending
enforcement actions pursuant to the Uniform Statewide
Building Code (§ 36-97 et seq.) that affect the safe,
decent, sanitary living conditions of the property of which
the owner has been notified in writing by the locality,
except as disclosed on the disclosure statement, nor any
pending violation of the local zoning ordinance which the
violator has not abated or remedied under the zoning
ordinance, within a time period set out in the written
notice of violation from the locality or established by a
court of competent jurisdiction, except as disclosed on the
disclosure statement; and
7. The owner makes no representations with respect to
whether the property is within a dam break inundation zone.
Such disclosure statement shall advise purchasers to
exercise whatever due diligence they deem necessary with
respect to whether the property resides within a dam break
inundation zone, including a review of any map adopted by
the locality depicting dam break inundation zones.
55-520. Time for disclosure; termination of contract. —
A. The owner of residential real property subject to this chapter shall
deliver to the purchaser the written disclosure statement required by
this chapter prior to the acceptance of a real estate purchase contract
or otherwise be subject to the provisions of subsection B of this
section. For the purposes of this chapter, "acceptance" means the full
execution of a real estate purchase contract by all parties. The
residential property disclosure statement may be included in the real
estate purchase contract, in an addendum thereto, or in a separate
document.
B. If the disclosure statement required by this chapter is delivered to
the purchaser after the acceptance of the real estate purchase contract,
the purchaser's sole remedy shall be to terminate the real estate
purchase contract at or prior to the earliest of
(i) three days after
delivery of the disclosure statement in person;
(ii) five days after the
postmark if the disclosure statement is deposited in the United States
mail, postage prepaid, and properly addressed to the purchaser;
(iii)
settlement upon purchase of the property;
(iv) occupancy of the property
by the purchaser;
(v) the purchaser making written application to a
lender for a mortgage loan where such application contains a disclosure
that the right of termination shall end upon the application for the
mortgage loan; or
(vi) the execution by the purchaser after receiving the
disclosure statement required by this chapter of a written waiver of the
purchaser's right of termination under this chapter contained in a writing
separate from the real estate purchase contract.
In order to terminate a
real estate purchase contract when permitted by this chapter, the
purchaser must, within the times required by this chapter, give written
notice to the owner either by hand delivery or by United States mail,
postage prepaid, and properly addressed to the owner. If the purchaser
terminates a real estate purchase contract in compliance with this
chapter, the termination shall be without penalty to the purchaser, and
any deposit shall be promptly returned to the purchaser.
C. Notwithstanding the provisions of subsection B of § 55-524, no
purchaser of residential real property located in a noise zone designated
on the official zoning map of the locality as having a day-night average
sound level of less than 65 decibels shall have the right to terminate a
real estate purchase contract pursuant to this section for failure of the
property owner to timely provide any disclosure required by § 55-519.1.
§ 55-509.4. Contract disclosure statement; right of
cancellation. —
A. Subject to the provisions of subsection A of
§ 55-509.10, a person selling a lot shall disclose in the
contract that
(i) the lot is located within a development
that is subject to the Virginia Property Owners' Association
Act (§ 55-508 et seq.);
(ii) the Act requires the seller to
obtain from the property owners' association an association
disclosure packet and provide it to the purchaser;
(iii) the
purchaser may cancel the contract within three days after
receiving the association disclosure packet or being
notified that the association disclosure packet will not be
available;
(iv) if the purchaser has received the
association disclosure packet, the purchaser has a right to
request an update of such disclosure packet in accordance
with subsection H of § 55-509.6 or subsection B of
§ 55-509.7, as appropriate; and
(v) the right to receive the
association disclosure packet and the right to cancel the
contract are waived conclusively if not exercised before
settlement.
For purposes of clause (iii), the association disclosure
packet shall be deemed not to be available if (a) a current
annual report has not been filed by the association with
either the State Corporation Commission pursuant to
§ 13.1-936 or with the Common Interest Community Board
pursuant to § 55-516.1, (b) the seller has made a written
request to the association that the packet be provided and
no such packet has been received within 14 days in
accordance with subsection A of § 55-509.5, or (c) written
notice has been provided by the association that a packet is
not available.
B. If the contract does not contain the disclosure required
by subsection A, the purchaser's sole remedy is to cancel
the contract prior to settlement.
C. The information contained in the association disclosure
packet shall be current as of a date specified on the
association disclosure packet prepared in accordance with
this section; however, a disclosure packet update or
financial update may be requested in accordance with
subsection H of § 55-509.6 or subsection B of § 55-509.7, as
appropriate. The purchaser may cancel the contract:
(i) within three days after the date of the contract, if on
or before the date that the purchaser signs the contract,
the purchaser receives the association disclosure packet or
is notified that the association disclosure packet will not
be available;
(ii) within three days after receiving the
association disclosure packet if the association disclosure
packet or notice that the association disclosure packet will
not be available is hand delivered or delivered by
electronic means and a receipt obtained; or
(iii) within six
days after the postmark date if the association disclosure
packet or notice that the association disclosure packet will
not be available is sent to the purchaser by United States
mail.
The purchaser may also cancel the contract at any time
prior to settlement if the purchaser has not been notified
that the association disclosure packet will not be available
and the association disclosure packet is not delivered to
the purchaser. Notice of cancellation shall be provided to
the lot owner or his agent by one of the following methods:
1. Hand delivery;
2. United States mail, postage prepaid, provided the sender
retains sufficient proof of mailing, which may be either a
United States postal certificate of mailing or a certificate
of service prepared by the sender confirming such mailing;
3. Electronic means provided the sender retains sufficient
proof of the electronic delivery, which may be an electronic
receipt of delivery, a confirmation that the notice was sent
by facsimile, or a certificate of service prepared by the
sender confirming the electronic delivery; or
4. Overnight delivery using a commercial service or the
United States Postal Service.
In the event of a dispute, the sender shall have the burden
to demonstrate delivery of the notice of cancellation. Such
cancellation shall be without penalty, and the seller shall
cause any deposit to be returned promptly to the purchaser.
D. Whenever any contract is canceled based on a failure to
comply with subsection A or C or pursuant to subsection B,
any deposit or escrowed funds shall be returned within
30 days of the cancellation, unless the parties to the
contract specify in writing a shorter period.
E. Any rights of the purchaser to cancel the contract
provided by this chapter are waived conclusively if not
exercised prior to settlement.
F. Except as expressly provided in this chapter, the
provisions of this section and § 55-509.5 may not be varied
by agreement, and the rights conferred by this section and
§ 55-509.5 may not be waived.
55-518. Exemptions. —
A. The following are specifically excluded from the provisions of this
chapter:
1. Transfers pursuant to court order including, but not limited to,
transfers ordered by a court in administration of an estate, transfers
pursuant to a writ of execution, transfers by foreclosure sale or by a
deed in lieu of a foreclosure, transfers by a trustee in bankruptcy,
transfers by eminent domain, and transfers resulting from a decree for
specific performance. Also, transfers by an assignment for the benefit of
creditors pursuant to Chapter 9 (§ 55-156 et seq.) and transfers pursuant
to escheats pursuant to Chapter 9 (§ 55-156 et seq.).
2. Transfers to a beneficiary of a deed of trust pursuant to a
foreclosure sale or by a deed in lieu of foreclosure, or transfers by a
beneficiary under a deed of trust who has acquired the real property at a
sale conducted pursuant to a foreclosure sale under a deed of trust or
has acquired the real property by a deed in lieu of foreclosure.
3. Transfers by a fiduciary in the course of the administration of a
decedent's estate, guardianship, conservatorship, or trust.
4. Transfers from one or more co-owners solely to one or more other
co-owners.
5. Transfers made solely to any combination of a spouse or a person or
persons in the lineal line of consanguinity of one or more of the
transferors.
6. Transfers between spouses resulting from a decree of divorce or a
property settlement stipulation pursuant to the provisions of Title 20.
7. Transfers made by virtue of the record owner's failure to pay any
federal, state, or local taxes.
8. Transfers to or from any governmental entity or public or
quasi-public housing authority or agency.
9. Transfers involving the first sale of a dwelling; provided, that
this exemption shall not apply to the disclosures required by § 55-519.1.
B. Notwithstanding the provisions of subdivision 9 of this section, the
builder of a new dwelling shall disclose in writing to the purchaser
thereof all known material defects which would constitute a violation of
any applicable building code. In addition, for property that is located
wholly or partially in any locality comprising Planning District 15, the
builder or owner, if the builder is not the owner of the property, shall
disclose in writing whether the builder or owner has any knowledge of (i)
whether mining operations have previously been conducted on the property
or (ii) the presence of abandoned mines, shafts, or pits, if any. The
disclosures required by this subsection shall be made by a builder or
owner (i) when selling a completed dwelling, before acceptance of the
purchase contract or (ii) when selling a dwelling before or during its
construction, after issuance of a certificate of occupancy. Such
disclosure shall not abrogate any warranty or any other contractual
obligations the builder or owner may have to the purchaser. The
disclosure required by this subsection may be made on the disclosure form
described in § 55-519. If no defects are known by the builder to exist,
no written disclosure is required by this subsection.
Please see the information at the following links:
http://definitions.uslegal.com/r/real-estate-deeds/
http://definitions.uslegal.com/r/real-estate-disclosures/