No Free Do-Over For A Deed Delivered At Closing

When a seller agrees to sell to a buyer, they sign a contract that identifies the real estate, states the purchase price, and covers a few other important points. The seller signs a deed to convey the property to the buyer as part of the closing.

If the buyer doesn't realize that the real estate isn't described in the deed, what happens? The contract merging into the deed means that all that is left is the deed. If the deed conveyed the wrong real estate it would be bad for the buyer and bad for the lawyer who approved the deed.

It may sound brutal. It has been in American real estate law for hundreds of years. New York still follows this principle according to a recent decision. The seller had to give the buyer a lot on which to build a house. A narrative reading of the boundaries of a survey diagram was used to describe the lot.

The metes and bounds description attached to the deed was quite similar to the one in the contract and the seller conveyed a slightly different piece of real estate. There was a second lot that was necessary for the buyer to be able to install a septic tank system in the house.

The seller tried to get the buyer to pay more for the second lot, but he refused. The buyer filed a lawsuit. The contract is irrelevant because the deed embodies the final agreement between the parties. The contract won't be reconsidered.

There are exceptions to this rule The court can look at the contract if the property description in the deed is not clear. A court will enforce the provisions of the contract if they survive the closing. Many provisions of the contract will survive the closing. The seller's obligation to convey the agreed-upon real estate isn't usually included in the list of surviving provisions.

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The buyer lost the case because there were no exceptions mentioned in the previous paragraph.

The buyer's lawyer could have done a better job at closing the deal. A simpler and less mistake-prone description of the property could have been created if they had referred to a plat map.

The case is Pickard v Campbell.