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Making sure real estate contracts are in order

As a real estate attorney, it would only be appropriate to begin any article dealing with contract drafting by stating that it is in any real estate purchaser’s or seller’s interest to consult an attorney before drafting or negotiating a real estate contract. I have seen enough contracts come across my desk to know that many are not drafted by attorneys – and sometimes even if they are, they are not always perfect.

One of the most common problems seen in real estate contracts is the failure of the parties to provide an adequate description of the property being sold. When providing a description, many contracts refer to an “Exhibit A,” which should be attached to the contract and should contain the actual legal description of the property. Often, fully executed contracts are brought to my office ready to close, but the legal description attached to the contract states something like: “Legal description to be attached” or “survey to be attached at a later date.” Sometimes, the legal description is left off of the contract completely.

Recently, an Atlanta real estate company entered into a contract to purchase some acreage in the area. The contract gave an acreage amount and specifically referred to an “Exhibit A” containing the legal description of the property being sold, but it was not attached. Later, a dispute arose under the contract and the seller decided it would not sell the property to the purchaser. After the purchaser sued the seller in an attempt to require the seller to sell the property, the Court of Appeals of Georgia found that the contract was unenforceable due to the fact that it contained an inadequate legal description.

I am quite sure this purchaser spent a great deal of time, effort and money attempting to purchase this property. Even though the parties had no dispute over what property was being sold, all of the purchaser’s efforts were for naught as the contract was found to be unenforceable due to the failure to include the subject property in “Exhibit A.”

In the aforementioned case, the court ruled that for a contract to be considered enforceable, the legal description should describe the property “within the four corners.” This means that a purchaser or seller should make every attempt to obtain a “metes and bounds” legal description or a survey that describes the property and incorporate that description into the contract. Descriptions such as these may be contained in the seller’s vesting deed or the seller’s title policy.

Former surveys are often recorded, so those may be available in the plat records in the courthouse of the county where the property is located. In the event either of these is unavailable (which is sometimes the case), you should at least incorporate a tax map or tax parcel number or identify the parcel by an address if you are purchasing a home or lot in a subdivided neighborhood. Be careful, however, as tax parcels and addresses oftentimes are incorrect or ambiguous so their use should be limited.

If you are looking to purchase or sell any real estate, prior to finalizing any contract (whether you have consulted an attorney to help your negotiations or not), you want to be sure you have an adequate legal description incorporated into the contract. As always, if you are questioning the adequacy of your legal description or have any questions regarding your contract, you should consult a real estate attorney for an opinion regarding the matter.

Kelly O. Faber is a real estate attorney with Mahaffey Pickens Tucker, LLP and may be reached at (770) 232-0000 or ">.

Gwinnett Business Journal


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