Knowing the 'Real Owner' Is Essential in Entering Into Real Estate Transactions

Every piece of real estate in the world is unique. That means that even a “cookie cutter” home, which is located in Levittown, New York,  or some other development which has all homes of the same shape, size and color, is not the same as the home on the right or the home on the left. It is because of this “singularity” of each parcel of real estate that Courts have, since feudal times, granted extraordinary equitable relief (translate that to “specific performance”) with regard to a defaulting Seller, who refuses to convey, even though he or she has entered in a binding agreement to do so. That piece of real property is different from every other piece of real property in the world, so the only fair remedy is to require the Seller to convey through the issuance or an equitable order.

The reason I have explained this the way I have is to alert you to the other side of this coin. If for some reason, you have a situation where you have a P and S Agreement with a person or entity which does not, in fact, own the property in question, there is no way to compel the conveyance of that property even if your P and S Agreement is with an individual, and the property is owned by a Trust of which this individual is the sole Trustee. In most situations, you can obtain money damages from the  person involved. I am not aware of any reported case, however, where a judge can order a conveyance from a party to a P and S Agreement, who is not the owner of record.

I bring this up to each of you as a caution. Do your homework, or have the attorney or title company with whom you work do their homework!!!!!  Make sure before you sign the P and S Agreement that the Seller you are entering into a contract with owns the property. It sounds simple, but the results of not confirming this information can be disastrous.

Recently, I got an assignment from a Seller to prepare a P and S Agreement from an accepted Offer. This two-step process is standard in Massachusetts. I checked with the  Registry of Deeds. The Condominium Unit in question is not owned by the woman who signed the Offer; it is owned by a Trust which she established in 1991. If I had not checked with the Registry, and my client, for some reason decided not to go forward, the Buyer would not be able to require the Seller to convey. Since I check ownership every time I do a P and S for a Seller or a Buyer, I will not comment whether not going through this exercise constitutes malpractice on my part. I can only say that each of you should be extremely vigilant in having the “ real owner” sign the P and S. Failing to obtain this information is really not acceptable, especially in this day and age when Registry records are so accessible online