Conditions That Real Estate Contracts Must Meet

Different legal jurisdictions have different requirements as to what real estate contracts much contain, if they are to be considered valid. Nonetheless a number of these requirements seem to hold constant across all jurisdictions.

In most places, for instance, real estate contracts have to be in writing. Oral agreements between parties, as such, don’t constitute real estate contracts in most places. The contract has to be written, in order for it to be considered legally binding.

In most places where real estate contracts must be written (and that is pretty most of the world), they have to include the full names of the parties to the transaction they cover. Now a requirement like this might not seem like one that could have too big an impact, until one gets to hear of cases where people have lost property related cases in court on account of the contract they got into having been lacking in the proper identification of the parties to it. The moral here is simple, if you are getting into a real estate contract: check twice to ensure that your name, and the full name of the other party to transaction, appears on the contract. Otherwise, it could be a null ‘contract’ right from the beginning, and it could cause you problems later.

In most places, the property covered by the property contracts has to be identified, physically (with regard to its physical location) and if possible, in legal terms to, for instance what plot number it is and so on. This happens to be one of the commonly ignored elements of the real estate contract, and one whose ‘forgetting’ would cause you great trouble should a dispute ever arise with regard to it. The moral here is simple too: ensure that there is as comprehensive a description of the property covered by the property contract you get into as possible, and you will have potentially saved yourself from a great deal of trouble.

In all places where real estate contracts are made, it also becomes essential for them to be inclusive of the prices, ideally both in figures and words. Not many people would overlook this particular element, but then again, it is quite easy to get swallowed by the prose and the legalese that goes into the making of the real estate contract, and end up forgetting the very basic elements of it.

Of course, a proper property contract (or any contract for that matter) has to include the signatures of the parties to it, in order for it to be binding. It is this ‘signing on the dotted line’ that makes a contract one, after all. Yet a commonly made mistake is where a ‘dominant’ party (say a property owner) creates a contract for the ‘submissive’ party (say a tenant), and presents it to the ‘submissive’ party for that other party to ‘sign’ – without they themselves (the ‘dominant’ party) signing. This renders it invalid right from the outset, of course.

Dates form other important elements of real estate contracts. An undated real estate contract is considered invalid ‘ab initio’ that is, right from the beginning: meaning that the date is one of the things you should pay keen attention to in your property contracts, even before you start reading through the document.

Other elements that will vary from real estate contract to another (depending on the circumstances behind it) include the payment details, interest on payments and so on. Of course, the parties getting into real estate contracts must of good contractual capacity (people of sound mind, adults, under no coercion) and so on.

All in all, it is essential to ensure that the major conditions for a property contract (date, price, description and signatures) are met in it, alongside the other conditions for it, which vary depending on the circumstances surrounding it.

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