Asked Vince - Equitable Title
Published Friday, September 21, 2018
Asked Vince …
From time to time agents will call or visit me with a situation they’re dealing with and ask my advice. Now they know, and I make it very clear, that I’m not an attorney and I refer any and all legal questions to council. However in my 40 years as a Realtor and my 30 plus years as an educator and my 11 years answering questions on the radio I’ve seen and researched lots of interesting circumstances. Therefore I thought I’d write about some of them in this newsletter, with the same caveat that any advice I give must be discussed with a lawyer or the proper authorities.
A broker friend dropped by and asked about one of his seller clients who rented a building with the option to buy. Soon after the renter/optionee moved in, he placed as for sale sign on the property. The seller called my friend to see if it was OK … and my friend asked me. Well, of course, the parties need to refer to the written agreement which my friend agreed to do. Technically, however, the renter/optionee would have a right to sell the property because of something called equitable title. The renter/optionee not only has possession but also the right to buy which, in fact, gives him the right to sell. You see, after equitable title transfers so does the right to sell so the optionee could sell the property and exercise the option to purchase and the two transactions can happen simultaneously.
This is similar to a contract for deed or land contract purchase. Because the buyer has a contract spelling out the conditions for the receipt of the deed, the purchaser has the right to list the property for sale and, of course, put a sign in the ground.
In the case of the renter/optionee the renter is doing nothing improper in advertising the property for sale.