Rights of the seller before and after the sale- After transferring the ownership of the property to another person by the seller, the rights to such property belong to the buyer. After the sale, the rights of the seller are:
Seller’s lien or charge- A lien or charge on the property is acquired by the seller if, after completion of the sale, there remains a certain amount of due consideration. The property sale is complete when the possession has been delivered to the buyer and does not depend on the payment.
Interest on unpaid price- it is the right of the seller to get the interest on the unpaid price.
Transfer of seller’s charge- the charge created favoring the seller is an unsecured money debt. Therefore, it is called an actionable claim. The actionable claim is transferrable, like a charge. Therefore, the charge can be transferred to a third person by a registered instrument. Duties of the Seller before and after-sale are:
Disclosure of material defects- the seller must disclose all the material defects of the property. The buyer’s latent defect that cannot be detected on a reasonable investigation must be disclosed by the seller. Failure on behalf of the seller to inform of such latent defect is considered as misrepresentation.
Production of title deeds- the seller’s title deeds must be produced on demand of the buyer to examine and for his satisfaction. Failure on behalf of the seller to produce the documents will lead the buyer to get his money back paid in advance. The buyer also has the right to repudiate.
Executing conveyance- the seller has to execute conveyance which means to transfer the ownership. After the payment by the buyer, the seller is required to execute the conveyance
The seller must also clear any encumbrances to the property before the sale to the buyer.
Rights And Duties Of Buyer
Duties of Buyer before and after-sale are as follows:
Disclosure duty- material facts are to be disclosed by the buyer to the seller regarding the increase in the property value that the seller is not aware of.
Payment of price- the total amount is paid to the seller by the buyer to complete the sale. However, the buyer is not obliged to pay the total amount before the completion of the sale.
It is the duty of the buyer after the sale to bear the loss to the property. As all the ownership right is transferred to the seller, the seller is not liable for any loss. The buyer must restore the amount of insurance that the seller had over the property.
After the ownership has been transferred to him, the buyer must pay the property’s taxes, rents, or revenue. The buyer must pay liabilities of the property, which are due after the sale.
All the property rights, including the rents, profits, and any other benefits from the property, are owned by the buyer. The buyer is entitled to all the rights of the property. The transfer of ownership of the property entitles the buyer to get all the property benefits from the date of transfer.
Real Estate Law
A mixture of statutory as well as common law is followed in each state within the United States. The hierarchy of law in United States has been categorized into three levels: federal, state, and local law. Through new legislation and case laws, changes in the law are established under the common law, and each of them is given equal weightage. The rule about parole evidence and that agreement must be in writing must be writing varies across the state. Express terms of the document are relied on by the Courts unless the parties’ intent is ambiguous. In the United States, the conduct of the parties is considered by the Courts when the terms of the document in question are not transparent or ambiguous. The contract for sale or transfer of real estate must be in writing. There is an impact on each case’s decision on the process of structured transactions, or documents are drafted for further transactions. For instance, there was a ruling on the language of inter-creditor agreements by the Supreme Court in New York in 2010. There are certain circumstances where most inter creditor agreements between mortgage lenders and mezzanine lenders contain such language that needs mezzanine lenders for curing all defaults under the mortgage loan. This issue depended on whether the requirement was a precondition for foreclosing on Uniform Commercial Code collateral by a mezzanine lender or if failing to meet the requirement set off the mortgage lender’s right to accelerate the payment obligation under the mortgage loan.
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