San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-10-07
LEGAL HINTS
FOR BUYERS Of
: REAL ESTATE
Lawyer Gives Pointers On
:. Titles, Taxes, Con-
&, tracts, Etc.
MORTGAGE FACTS
! Default In Taxes and
= Other Legal Matters |
I Discussed.
FACTS
By JOHN LYLE vETTE, Attorney
for Chicago Real Estate Board


Because they are so widely used
in the sale of homes and land in
tended for homes sites, installment
sales contracts for the prospective
home owner.
These contracts ordinarily pro-
vide for a certain paym-nt down,
the balance TO be paid in monthly
installments, the deferred payments
bearing interest at an agreed rate,
and deed to be given when the price
"a fully paid.
= Sometimes the contract provides
for delivery of the deed before the
whole, but after a substantial part
scf the price has been paid, in which
event a purchase money mortgage
for the balance is given.
/ II II is the desire Of d purchaser
! that the home should 60 to his wife
sh the event of his death, the con-
tract should provide that the deed
from the seller should run to him.
self and wife not in tenancy in
common, but in joint tenancy.
Furthermore, it should provide that
II one OF them dies before they are
entitled to a deed, all the purchas-
ers' interest in the contract shall 20
to, and the deed when given shall je
made to, the survivor. Much trouble
and confusion has resulted from a
failure to observe this precaution. The
principal advantage of a joint tenancy
is that il obviates the trouble, delay
and expense involved in probating the
decedent's estate.
Renewal Of Mortgage
= a..
.stallment plan, subject to a mortgage
which will mature before the purchase
price is fully paid. Unless the pur-
chaser is prepared to pay off the mort
gage at maturity the contract should
. provide for obtaining a new mortgage
Or an extension Of the existing one and
state who is to bear the expense
thereof, it should also obligate both
seller and purchaser TO execute such
papers as may become necessary for
that purpose.
The contract should obligate the
seller TO furnish satisfactory evidence
Of his title, such as an abstract,
guarantee policy, or Torrens certificate
brought down to date of the contract
OF date Of delivery Of deed, whichever
is agreed upon. Unless the purchaser
is willing to rely upon the financial
responsibility of the seller, he should
either have the title examined before
he signs the contract or have tn con-
tract 80 phrased that it won't be oper-
alive as a contract il the title turns
out to be defective, and il he takes
the latter course he should have the
title examined as soon after he signs
the contract as possible. If the seller
himself has no title, but only a con-
tract for the purchase Of the property
the purchaser after completing his
payments might find himself unable
10 obtain a deed.
Default In Taxes.
From the sellers point OF view It
Il important not only that the pur-
chaser should be obligated to pay all
taxes, assessments and interest and
principal on encumbrance, but also
that il the purchaser defaults the
seller may at his option pay any such
item and thereby make the amount
thereof 90 much additional indebted
ness due under the contract.
Most installments contracts provide
chat in case OF default by the pur-
chaser, the seller may forfeit the con-
tain the payments already made in liq-
Undated damages. 1t is to the advant-
age of the purchaser to nave this 7. vt
limited to cases where the default shall
hsW continued for some specified
CINE, - for example for thirty days.
Or the contract could be made TO re-
quire q certain number o, days no.
tice before the exercise of the right
to forfeit. In that event, for the
-eeller's protection, provision should
be made for some sort of substituted
service, il personal service should be
impossible. In this connection, it is
pertinent to note that courts do not
favor forfeitures, and are prone to
seize upon slight circumstances, as
evidence of a waiver of the right TO
forfeit according to the strict forms
of the contract. For example, IL a
pprchased has been in the habit of de-
9aying his payments after their due
dates and the seller receives them with
out complaint the courts will hold he
cannot thereafter forfeit for a default
unless be gives the purchaser reason
ablue notice of his intention TO do so.
What is reasonable is n question OF
fact in each case, depending on all the
circumstances.
Recording the Contract.
Possession by a purchaser is notice
of his contract rights, the same as
though his contract were on record.
But in the case Of vacant property of
which he does not take possession, he
must record his contract, or else run
the risk Of the seller disposing of or
encumbering the property to an inno-
cent third party, who in that event
would ssquire rights superior t. those
nj the purchaser