An associate broker in Rio Rancho is drafting a purchase agreement for a rural property that includes an acequia membership. The buyer is unfamiliar with acequias. Which of the following actions is MOST appropriate for the associate broker to take regarding the acequia in the purchase agreement?
Correct Answer
B) Include a provision addressing the acequia membership, associated assessments, and water use rights, and advise the buyer to review acequia obligations
Acequias are recognized as political subdivisions of New Mexico under NMSA 1978, Chapter 73, Article 2. Membership in an acequia may convey water use rights and obligations—including assessments and maintenance duties—that run with the property. These are material facts that affect the property and must be addressed in the purchase agreement. The associate broker has a duty to ensure the buyer understands the acequia obligations, and the contract should address the transfer of acequia membership, associated rights, and any outstanding assessments.
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Related Topics & Key Terms
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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