CH 9 TRANSACTIONS USED Iin REAL ESTATE TRANSACTIONS part 2.pdf.docx

Car leases personal property leases such as equipment

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Car leases Personal property leases, such as equipment used in a beauty salon If the lease is valuable enough to generate funds for any unsecured creditors, the trustee might assume the lease and assign it for a lump sum that could be distributed to your creditors. But this would be highly unusual. As a rule, the leases of people filing Chapter 7 bankruptcies probably would not add much value to their bankruptcy estates. Trustees are not trying to put tenants on the street. What Is An Executory Contract? An executory contract is a contract that has unperformed obligations on both sides of the contract. For purposes of Texas Property Code sections 5.061 et seq, an executory contract is any transaction that defers some action by either party that pertains to ownership or possession of real property into the future. For example, in these contracts, the purchaser has not yet paid the purchase price and the seller has not yet conveyed title. Because the seller has not conveyed title, he or she has legal title to the property and the buyer as equitable title. Equitable title is the beneficial interest of a person whom equity regards as the real owner but the legal right vests with another. For example, a purchaser under a contract for sale has equitable title to the property and the seller retains the legal title until the terms of the contract are met. Sections 5.061 through 5.085 of the Property Code apply to executory contracts for conveyance of real property to be used as the purchaser’s residence. Contracts that are Defined as Executory Contracts Lease-purchases Lease-options for longer than 180 days Contracts for deed The "180 days or less" exemption exists as an accommodation to real estate brokers, because otherwise the TREC 1-4 residential contract could violate this provision when combined with a TREC temporary lease. ___________________________________________________________ Unit 9: Contracts Used In Real Estate Transactions II 351
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The law does not apply to options that are not combined with a residential lease or options on commercial property. The sale of state land or a sale of land by the Veterans’ Land Board is also exempt. Nor does the law apply to an executory contract for conveyance between family members. What are the Requirements for Executory Contracts? Property Code, Subchapter D Sections 5.069 and 5.070 contain a number of requirements that must be met before the executory contract is signed by the purchaser (i.e., before and not at closing). Seller’s Disclosure of Property Condition A seller must provide the following items before an executory contract is signed by the purchaser. Seller’s Required Disclosures A current survey or plat. [§5.069(a)(1)] Copies of liens, easements, restrictive covenants, or other encumbrance affecting title to the property. [§5.069(a)(2)] A “Seller’s Disclosure of Property Condition” in the case of an outright sale. [§5.069(a)(3)] If the property is not located in a recorded subdivision, a separate disclosure stating that utilities may not be available until the subdivision is properly recorded. [§5.069(b)].
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  • Fall '19
  • Leasehold estate

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