Greg MD Blog

Module 01 Discussion

Good day, fellow peers and Professor,

My name is Greg, and I am in my final year of paralegal studies. This phase excites me, and as I look forward to the future, I recognize that I will miss the classroom experience at Ivy Tech.

Although I have not signed any lease agreements this year, I have received an offer from a company seeking to purchase my second home. After reading the contract, I found several legal issues that will affect the seller, giving control to the REI during the transaction. I believe these insights are crucial, and I plan to outline my concerns and explain why I decided to refrain from signing either contract.

The initial contract I reviewed, titled “Contract for the Sale and Purchase of Real Estate,” was provided by REI Equity LLC. After reading the contract, I discovered several issues and concerns that needed my focus. Following this review, REI indicated an interest in acquiring my second residence.

The risk of loss clause is a provision in real estate contracts that allows buyers to withdraw from the agreement under specific circumstances. However, it’s important to note that the risk of loss can arise anytime—whether before, during, or even after the property purchase. Therefore, understanding the inherent risks throughout the transaction process is crucial for informed decision-making, giving the buyer the right to withdraw.

This agreement contains a judgment clause I’ve never seen before. During a title search, companies typically look for judgments, liens, or other legal issues related to the property title and report any claims they find. In most cases, during title search, the current seller can not sell or transfer the property without mitigating their financial obligations.

REI plans to sell the property to another buyer. According to the contract terms, REI can rent, assign, lease, renovate, or flip the property before closing. The contract did not disclose a specific date, only to occur within forty-five days. Additionally, since the agreement has not been fully executed, REI can take possession of the property before closing.

The contract specifies that REI is to acquire possession of the property from the seller, with the requirement that all keys, remotes, and access codes be handed over to REI. However, the clause regarding the transfer of these items lacks a clear definition of intent, which may lead to potential issues in the future.

REI initiated the contract because the buyer did not specify a timeline for the property purchase. This circumstance grants REI complete control over the property in question. However, the agreement lacks a clear definition of the lawful object involved, which could lead to potential issues.

REI holds a binding agreement for the property; however, the specific closing date has not been determined. It is important to note that all sales are final, and the seller has relinquished their right to cancel the agreement. This contract permits the buyer to market and sell the property to another prospective buyer. The deal concerns foreseeing future legal issues for the seller considering the lack of capacity and lawful object. After reading the agreement carefully, REI can proceed with your property. One consideration is whether a company can sell property in Indiana while operating from another state without having a license to conduct real estate transactions.

Numerous sections require revision or removal to enhance the clarity and effectiveness of this agreement. Key focus areas include the disclosures, risk of loss, no judgment, access/marketing, and the condition that the sale is final. The contract must state a crucial point and leave no room for misinterpretation. Additionally, it is required to state the closing date, allowing REI to initiate the legal process for possessing the property. I rejected their offer and responded that their ” contract had many legal issues.”

course Contract and Commercial Law

Written by: Greg MD