A purchase agreement in Dothan, Alabama requires the seller to provide clear, marketable title at closing. The title search reveals an old, unsatisfied mechanics' lien from a contractor who worked on the property five years ago. The seller claims the lien is unenforceable due to its age. The buyer demands the lien be released before closing. Which of the following best describes the buyer's contractual right in this situation?
Correct Answer
C) The buyer may refuse to close and declare the seller in default if the lien clouds marketable title and the seller cannot remove it
When a purchase agreement requires the seller to deliver marketable title, an unsatisfied mechanics' lien that clouds title prevents the seller from fulfilling this contractual obligation. The buyer has the right to refuse to close and declare the seller in default if the seller cannot remove the lien and deliver marketable title as promised. The seller's claim about the lien's age does not automatically resolve the cloud on title.
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Related Topics & Key Terms
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Related Concepts
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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