Contracts
A purchase agreement states the property is to be conveyed by 'general warranty deed, free and clear of all liens and encumbrances.' If a title search reveals an easement on the property, the seller:
AIs in breach of contract and must clear the easement or the buyer may terminate✓ Correct
BMay convey subject to the easement as easements are commonly accepted
CMay require the buyer to accept the easement or pay an additional fee
DMust obtain IDFPR approval before proceeding
Explanation
If the contract requires conveyance 'free and clear of all liens and encumbrances' and an easement exists, the seller may be in breach unless the easement is waived or the contract amended. Some easements (like common utility easements) may be considered acceptable exceptions if the contract is interpreted accordingly — but 'free and clear' language is strict.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
EasementA non-possessory right to use another person's land for a specific purpose.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
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