West Virginia Real Estate Contracts Guide for Exam Prep

West Virginia Real Estate Contracts Guide

West Virginia real estate contracts combine general contract law principles (national exam) with West Virginia-specific requirements including mineral rights clauses, deed of trust structure, and mandatory disclosure forms. This guide focuses on the state-specific elements.

Essential Contract Elements

All West Virginia real estate contracts must contain: 1. Offer and acceptance — a meeting of the minds on material terms 2. Consideration — something of value exchanged by both parties 3. Legal capacity — parties must be of legal age (18) and sound mind 4. Lawful purpose — the transaction must not violate law or public policy 5. Written form — the Statute of Frauds requires real estate contracts to be in writing and signed

Mineral Rights Clauses

West Virginia's mineral rights severance history makes mineral rights clauses a significant contract consideration. When a seller owns only surface rights, the purchase agreement and deed must clearly state that mineral rights are excluded. Buyers should conduct a separate title examination of the mineral estate, which may have a different chain of title from the surface estate.

Key issues to identify in the contract: - Does the seller own both surface and mineral rights? - Have the mineral rights been severed and conveyed to a third party? - Do any mineral leases (oil, gas, coal) currently burden the property? - Are there any active mining operations or mine subsidence risks?

Deed of Trust Structure

West Virginia uses deeds of trust rather than mortgages for most residential lending transactions. The parties to a WV deed of trust are:

• Trustor (borrower): Conveys legal title to the trustee as security for the loan
• Trustee: A neutral third party (typically a title company or attorney) who holds title
• Beneficiary (lender): Holds the promissory note and benefits from the deed of trust as security

Non-judicial foreclosure: If the borrower defaults, the trustee can sell the property without court intervention under a power of sale clause. This is faster than judicial foreclosure.

Judicial foreclosure: Also available in West Virginia for certain situations, but less common than the non-judicial Trustee's Sale.

Property Disclosure Requirements

The West Virginia Residential Property Disclosure Form must be completed by sellers and provided to buyers before or at the time of the purchase agreement. Sellers must disclose:

• Known structural defects and roof condition
• Water supply and septic system issues
• Environmental hazards and contamination
• Underground storage tanks
• Mine subsidence and coal mining history — unique to WV; must disclose known mining activity that could affect the property
• Lead-based paint disclosure for pre-1978 homes (federal requirement)

County Excise Tax at Closing

Unlike states with a state transfer tax, West Virginia charges a county excise tax of $1.10 per $500 of sale price. This is typically shown on the HUD-1 or Closing Disclosure as a seller-paid expense. The formula: round the sale price up to the nearest $500, divide by $500, and multiply by $1.10.

Exam Focus

Mineral rights clauses and mine subsidence disclosure requirements are the most distinctly West Virginia contract topics. Pair these with deed of trust structure and county excise tax calculation, and you have covered the highest-yield state contract areas.