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Contracts • Defenses to Enforcement and Formation
K#056
Legal Definition
Generally, valid transfers of real estate must be in writing. Examples include: (1) leases for more than a year, (2) easements of more than a year, (3) fixtures, (4) mineral or structures if they are to be severed by the buyer, and (5) mortgages.
Note that Leases of a year or less need not be in writing.
Note that Leases of a year or less need not be in writing.
Plain English Explanation
Real estate has a lot of complex laws and regulation, which is why it has its own subject in law school and on the bar exams. Anytime you see a contract involving real estate, be sure to slow down and look at what kind of agreement it is. In the real world, it's uncommon to have property transactions without written contracts -- but it still happens. On exams, if you spot any of the following types of transactions, it must be in writing and signed:
(1) Leases that extend for more than a year. 1 year or less may be oral.
(2) Easements that extend for more than a year. 1 year or less may be oral.
(3) Any transaction involving a fixture. A fixture is a piece of physical property that is permanently attached (fixed) to real property (usually land). For example, a home is a fixture that is permanently attached to the land beneath it.
(4) Any time minerals or structures are being "severed by the buyer" in a transaction. In other words, imagine if you were selling property that involved a house on top of a gold mine. The entire property, including the rights to the gold, may be worth millions of dollars. But perhaps the buyer only wants the home and is willing to give up any rights to the minerals on the land. This would need to be proven with a signed, written contract.
(5) Any transaction involving a mortgage.
(1) Leases that extend for more than a year. 1 year or less may be oral.
(2) Easements that extend for more than a year. 1 year or less may be oral.
(3) Any transaction involving a fixture. A fixture is a piece of physical property that is permanently attached (fixed) to real property (usually land). For example, a home is a fixture that is permanently attached to the land beneath it.
(4) Any time minerals or structures are being "severed by the buyer" in a transaction. In other words, imagine if you were selling property that involved a house on top of a gold mine. The entire property, including the rights to the gold, may be worth millions of dollars. But perhaps the buyer only wants the home and is willing to give up any rights to the minerals on the land. This would need to be proven with a signed, written contract.
(5) Any transaction involving a mortgage.
Hypothetical
Hypo 1: During an especially hot Summer, Bob decides to invest in a swimming pool. He goes to Walmart and buys a blow-up pool, brings it home, and sets it up in his backyard. Bob's neighbor, Sam, wants to use the pool. Bob creates a contract with Sam that allows him to use the pool every Tuesday and Friday for $20 per week. Sam agrees. Result: Nothing about this requires a written contract. An oral contract would be fine and valid. The pool is not a fixture, nor is it real estate or an interest in real estate. Moreover, the agreement has no defined period or end date.
Hypo 2: Same facts as Hypo 1, except this time Bob pays to have a pool installed in his backyard. The pool engineers dig out a pit, fill it with concrete, add a diving board, and finish in record time. Sam wants to use the pool. Bob creates a contract with Sam that allows him to have exclusive access to the pool every Tuesday and Friday for $20 per week. Sam agrees. Result: This contract involves a fixture, Bob's inground swimming pool. As such, it must be evidenced by a signed writing in order to satisfy the Statute of Frauds.
Hypo 2: Same facts as Hypo 1, except this time Bob pays to have a pool installed in his backyard. The pool engineers dig out a pit, fill it with concrete, add a diving board, and finish in record time. Sam wants to use the pool. Bob creates a contract with Sam that allows him to have exclusive access to the pool every Tuesday and Friday for $20 per week. Sam agrees. Result: This contract involves a fixture, Bob's inground swimming pool. As such, it must be evidenced by a signed writing in order to satisfy the Statute of Frauds.
Visual Aids
Related Concepts
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