A Brief Introduction of Vacant Land Purchase Agreement
When purchasing land, there are a lot of factors to be considered by the buyer before making the final purchase. These factors include what the soil condition is, the presence of hazardous material, whether zoning has been completed to permit you to use the land for a specific purpose and so on.
To safeguard the interests of the buyer, the agreement must contain an accurate description of the land. If there is a mismatch between the offered and the actual land, then a professional engineering firm must be appointed to determine the actual area. Without this verification, bank financing will not be available.
One of the provisions of a vacant land purchase and sale agreement for Washington state is that the seller needs to provide information regarding the condition of the property to the buyer in 5 business days. The title to the land should be clear and the buyer should be able to use the land as the owner.
Who Takes the Vacant Land Purchase Agreement?
A seller and a buyer would both require this agreement to transfer the property rights of this land. This agreement ensures that both parties honor their contractual obligations. There are mainly two parties to this contract: the seller who wants to sell the land and the buyer who wants to buy the land.
Purpose of the Vacant Land Purchase Agreement
The seller needs to coordinate with the buyer and provide all the information regarding the size and quality of the land. The buyer has the right to inspect the land if there is an agreement and get an engineer to verify the measurements. A contract binds two parties under the law. This means that if either party backs off of their responsibility, it can be counted as a breach of contract. Specific performance becomes mandatory for the seller if payment has been made.
With a vacant land purchase and sale agreement, the seller has to deliver the title to the land before the agreed date of the transfer unless both parties mutually agree to postpone the date of transfer.
Contents of the Vacant Land Purchase Agreement
A simple vacant land purchase agreement would contain the following information:
- The parties to the agreement, the buyer and seller of the land
- The detailed description of the land being purchased
- The purchase price for the land
- Any deposit that either party has to put up before the closing date of the transfer.
- The closing date on which possession of the land is handed over to the buyer and the buyer makes the final payment for the land. The seller needs to provide the buyer with an ‘affidavit of the title’
- The purpose for which the land is zoned for use
- Modifications to the agreement should be made within 3 business days of the acceptance date
- The date of inspection of the property
How to Draft the Vacant Land Purchase Agreement?
- Eligibility to contract: The buyer and the seller of the land must be over 18 years of age, of sound mind and not under the influence of drugs. Coercion should not be used for any party
- The purchase price: The total consideration for the land and the closing date by which it must be paid in full
- The delivery date: The date by which the delivery of the title to the land must be completed
- Terms of the contract: These must protect the rights of both parties
- Dispute resolution clause: Disputes to be solved through litigation and attorney fees should be shared
- Description of Premises: Both parties should agree on the description of the land including its boundaries. Some times, if there is a title dispute, the agreement from the disputing parties should also be taken.
- The agreement should include a default clause that acknowledges that the transfer that the seller is giving for the land has a good title insofar as any known easements and rights of use of third parties are concerned.
- Governing laws: The agreement should follow the applicable laws of the state
- Termination clause: If there is a discrepancy between the stated and actual land, the buyer may terminate the agreement
The seller can make an offer to the buyer in a vacant land purchase agreement. The buyer can then get the land inspected by an engineer to verify the grade of the land and the area. Depending on the result of the inspection, the buyer can negotiate the price. The main idea is that the deposit that the parties have to put up should be as low as possible.
[Also Read: Land Sale Contract ]
Benefits & Drawbacks of the Vacant Land Purchase Agreement
The benefits of vacant land purchase agreements are:
- Protection of interest: Since the obligations of both parties are honored, the compensation and title are transferred in good faith to both of them
- Right to inspection: The buyer has the right to get the land inspected by a qualified engineer to make sure that its measurements are correct
- Termination or any other remedial measures as provided by agreement on breach of contract by either party
The drawbacks of vacant land purchase agreements are:
- No assurance for the buyer or seller. Either party could default on their obligations
- In case of breach of contract by either party, there is no legal remedy as there is no written contract
What Happens in Case of Violation?
In case of violation of any clause of the vacant land purchase agreement, the injured party can take the other party to court. Any injured party as a result of the breach of the contract is entitled to damages. Whether they would be punitive or compensatory depends on the nature of the breach(1).
If there is fraud involved while drafting the contract, then the contract can either be cancelled under rescission or a new contract drawn up under reformation. If the contract has reached an advanced stage, then specific performance is considered and monetary damages are not accepted.
In a vacant land purchase agreement, the buyer has to exercise due diligence to ensure that the title of the land is good. The right to inspection allows the buyer to verify the quality of the land and then make an offer. The governing laws should be adhered to. Both parties should study the agreement carefully to understand all interested are being considered and the expectations are being met.