Real Estate Records - Do Your Contracts Have These 8 Components?
Real estate records are comprised of contracts, deeds, and other documents that describe a property, its sale, or its status under the law. They are also called real property records, distinguishing them from other types property records (e.g., equipment, machinery, etc.).
Real estate records may refer to contracts that are legal evidence of a sale, purchase, or other means of exchange between two parties. But government offices do not generally keep these contracts. (See end of article.)
Some real estate records may come from leasehold estates, which involve leases and rentals. But although a leasehold estate, just like a regular real estate contract, is a bilateral contract (an agreement by two parties), the leasehold contract is NOT considered by law to be a deed that can be recorded as it is, essentially, temporary.
So this usually excludes leaseholds from real estate records. On the other hand, freehold contracts (meaning more permanent, unlike leasehold) such as titles and life estates are part of real estate records.
Real Estate Records - What Should They Contain?
To be valid and executable under US law, real estate records should contain or meet the following details.
Complete Names of Parties.
The real estate contract is a sales agreement. The parties (buyer/s and seller/s) are referred to as principals. This is done to distinguish a principal from a real estate
agent, who sometimes represents either (or both) buyer or seller in negotiating the price. The contract must clearly distinguish agents or brokers who earn commissions from the deal.
Property Identification.
At the very least, the contract should have the exact address of the property. But it's better if the contract has a legal property description (i.e., measurements, boundaries, etc.).
To make sure, attach the official property survey. Make sure all details are consistent between survey and contract.
Price
How much will be paid for the property? If negotiations or other details affect the final price, then a reasonable estimate should be stated in the contract. The final appraisal
may be done at a later date.
Complete Signatures
All parties should sign the agreement - voluntarily, not by coercion.
No Illegal Purpose
If any action stated in the contract violates state or federal laws or ordinances (e.g., zoning laws, environmental laws, ill-gotten gain etc.), then the agreement is considered void.
Competence
Any party that is incapacitated due to mental illness, substance abuse, or medication should not sign the contract or it will be considered void. If one principal is below legal
age, then that minor can void the contract as he or she desires.
Meeting of Minds
Principals should clearly mean the same thing, in terms of obligations and rights, when they enter into the agreement.
Consideration
What will be given in exchange of real property ownership? Although the most common consideration is money, it can also mean an exchange of property or an agreement to do a certain service.
Real Estate Records - Should the Contract Be Notarized?
Not really, going by the law. However, a county real estate records office may require that signatures be notarized before they record the transaction as complete.
The real estate records the government keeps will usually not include the contracts. But the declarations stating purchase price have to be filed at the county office. The state archives will contain real estate records per county.
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