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Real Property • Conveyances
PROP#157
Legal Definition
If a party dies before the contract is completed, the seller's interest passes as personal property and the buyer's interest as real property. The parties still close.
Plain English Explanation
Death won't stop the purchase, it just changes who the parties are that need to complete it.
Hypothetical
Hypo 1: Amy owns Blackacre. Bob wants to buy Blackacre. Amy and Bob execute a contract of sale but, before closing, Amy dies. Amy has one heir, Carl. Result: Carl takes Blackacre and holds it in "bare legal title," meaning he doesn't actually own it and is holding it for the equitable title holder, Bob. Once Bob pays Carl the money for Blackacre, Carl must transfer title of Blackacre to Bob, completing the contract.
Hypo 2: Amy owns Blackacre. Bob wants to buy Blackacre. Amy and Bob execute a contract of sale but, before closing, Bob dies. Bob has one heir, Timmy, his son. Result: Timmy will use funds from Bob's estate to pay Amy. Timmy can then demand specific performance from Amy to convey the property upon closing of the contract.
Hypo 2: Amy owns Blackacre. Bob wants to buy Blackacre. Amy and Bob execute a contract of sale but, before closing, Bob dies. Bob has one heir, Timmy, his son. Result: Timmy will use funds from Bob's estate to pay Amy. Timmy can then demand specific performance from Amy to convey the property upon closing of the contract.
Related Concepts
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