The Residential Real Estate Contract in New Jersey, part 2 of 7

1. The parties.

The primary parties in interest to an agreement, or contract, are the buyer and the seller of the property. Generally when real estate is the subject of an agreement, that agreement must be in writing to be enforceable, although since 1996 an oral agreement that can be proved by a heavy burden of proof, that is by clear and convincing evidence, is enforceable.

Each party (buyer and seller) must be properly identified.

Errors in the way the name is set out as to the buyer may cause confusion and delay in the process of mortgage or other financing applications. Errors can slow up the process of a lender making a credit check, or in getting employment verification.

Errors in the way the name is set out as to the seller may confuse or delay a title search, hinder gathering information on taxes due or paid, on liens for utilities, or on pay-off information for mortgages and other liens.

The complete address of each party must be included. The address should show the county where the party lives and, if different, the address where he receives his mail. A complete address helps distinguish the party to an agreement from ones with a similar name who have judgments against them. The full mailing address of each party is used to provide notices called for by the agreement, such as attorney review, and satisfaction or failure of contingencies of the agreement. The social security number of each party should be provided for tax reporting and credit check purposes.

2.  The Property

In order for an agreement to be enforceable it must contain a description of the property in enough detail to distinguish it from all other properties.

Referring to and attaching a copy of the deed by which the seller took title to the property is an excellent way to identify the property, as long as none of the property has been divided away and sold, and the total property acquired by the deed will be sold by the agreement.

The property may be described by a metes and bounds description with an identified beginning point. Without a proper beginning point, we may know what the property consists of but would not have an adequate way to locate the property. It may be described by reference to a lot and block shown on a map filed in the county recording office.

Drawings of the property, or copies of the tax map area of the municipality showing the property, or a print of a property survey are all helpful. These graphic exhibits may be necessary if the property being sold is less than the property conveyed to the seller.

3.  Use of the Property

Use of a property is restricted by zoning ordinances, agreements, easements, and by other restrictions, either recorded or not recorded.

We can't assume that the property can be used in any particular way. The desire to occupy a house for any use different than the present use, should be expressed in the agreement. We also cannot assume that the present use is in accord with current regulations and that the use may be continued by a buyer of the property.

The present use may be in violation of zoning laws, or subject to or in violation of other restrictions andlimitations. A specific representation as to use should be obtained from the seller by the buyer. The seller may not want to make a representation for any use other than his own and thus may want to leave the buyer to his own investigation of allowable uses.

The specific desire for a particular use of the property should be stated in the agreement. Because another house in the area has a dental office does not mean that this house can have one. The other house may have been used as an office before zoning changes. The other house may not be subject to a limiting restriction effecting the title to the house being considered.

If there is a desire to expand the physical structure, such desire should be stated in the agreement. Restrictions may prohibit construction. Easements may be in the way of the planned construction. There may not be enough room between the existing structure and the required municipal set-back lines to construct an addition. (to be continued)