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TRUTH or FALSE: A Real Estate Quiz

1. A condo and a townhouse are legally the same.

False. Condo owners own the air space and townhouse owners own the complete unit including the land. Therefore, if the unit is on the second floor of a building, you can bet it is a condominium. However, both condos and townhouses have common areas.

 

2. At closing, the closing attorney is required to give the buyer a copy of the subdivision restrictions.

False. The buyer will usually receive a title insurance binder and title opinion at closing, but there is no requirement that the attorney give the buyer a complete copy of the subdivision restrictions.

 

3. Even though the buyer and the seller have not signed a contract, the seller is bound by law to sell if the buyer gives the seller a deposit.

False. In North Carolina, all contracts to sell land must be in writing and must contain the essential elements of a contract. The essential elements include price, the identity of the property, and other essential terms of the sale. The contract must also be signed by the parties. Deposit money alone will not constitute a contract.

 

4. In North Carolina, the seller can sell property “as is”.

True. In North Carolina, a seller can sell property “as is”. However, it becomes more complicated when the listing agent has knowledge of defects or problems regarding the property. According to the North Carolina Real Estate Commission, all real estate agents are under a duty to disclose “material facts”. Therefore, it is possible the seller has no duty to disclose while the agent has a duty to disclose all defects to the buyer.

 

Ryan C. Hawkins is a partner at Ferguson, Hayes, Hawkins & DeMay, PLLC and a member of the Real Property Section of the North Carolina Bar Association.