An Indiana purchase agreement specifies that the seller will provide a general warranty deed at closing. Before closing, the seller's title search reveals an old unresolved lien on the property. The seller wants to deliver a quitclaim deed instead to avoid liability for the lien. Under Indiana law, what right does the buyer have in this situation?
Correct Answer
D) The buyer may refuse to close and may be entitled to a return of earnest money and other remedies
The purchase agreement is a binding contract specifying the type of deed to be delivered. If the seller agreed to deliver a general warranty deed and cannot or will not do so, the seller is in breach of contract. Under Indiana contract law, the buyer is not obligated to accept a lesser form of title conveyance. The buyer may refuse to close, demand return of the earnest money, and may pursue additional remedies for the seller's breach, such as specific performance or damages.
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Key Terms:
Related Concepts
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
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