Buying a home in Massachusetts is a simple matter of finding a competent real estate broker, making an offer which, once accepted, will form the basis of a purchase and sale agreement… then on to solving issues of financing, etc., right? Wrong. Buying a home in Massachusetts is an exercise in patience, tolerance, and requires a deep understanding of what could go wrong so that each party to the purchase can be protected. Real estate attorneys are well equipped to handle “what might go wrong” with a real estate purchase and ought to be consulted by a prudent buyer and seller in a residential home purchase.
The Purchase and Sale Agreement in Massachusetts
To review, the purchase and sale agreement is the contract which identifies the parties to the home sale, describes the property to be sold, and deals with other issues such as contingencies that must occur prior to closing. There are two main forms of purchase and sale agreements commonly used by real estate brokers in Massachusetts, the form generated by the Massachusetts Association of Realtors (MAR) and the form developed by the Greater Boston Real Estate Board (GBREB).
The purchase and sale agreement also contains many clauses, some of which are boilerplate (commonly used clauses) which identify how commonly occurring matters will be handled by the parties to the sale. For example, a clause detailing how money will be used to “clear title” is a common representation found in many purchase and sale agreements. It would be a serious mistake, however, to believe that all purchase and sale agreements are alike, that all boilerplate phrasing is alike. As with everything in law, the devil is in the details, even one seemingly simple phrase can be the subject of litigation, or might add up to a court decision in favor of one party or the other.
The focus of the following series of articles is to take a deep dive into the MAR and the GBREB to look at some of the differences between the two forms. It has been said by many real estate attorneys that the MAR favors the home buyer and the GBREB favors the seller of real estate…let’s take a closer look at these claims.
Part I – Who is Buying, Who is Selling, and the Statute of Frauds
What’s in a name? Everything. The Massachusetts Statute of Frauds, M.G.L. Chapter 259, § 1, provides in part that “no action shall be brought…upon a contract for the sale of lands…unless the promise, contract or agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged….”
What does this mean?
What is the Massachusetts statute of frauds trying to tell us? Simply this, a contract for the sale of property in Massachusetts must be in writing and signed by the parties to the contract for the sale of property for any action to be brought in court on that contract. In other words, if there is no agreement that can be proved by a writing or a combination of sufficient writings that can demonstrate to a court that parties have agreed to sell property in Massachusetts, then there can be no argument in court as to that agreement being breached or not fulfilled in some way.
Because of the Massachusetts statute of frauds, all real estate brokers in Massachusetts use some form of writing, some contract, to make it crystal clear who the parties are to the agreement to sell property. Both purchase and sale agreement forms, the MAR and the GBREB, contain a section clearly denoting who is the buyer and who is the seller of the property. Both documents also contain a signature line for each party to the contract. It probably seems obvious that a contract such as a purchase and sale agreement should contain the names and signatures of the buyer and seller to the contract, but much litigation has arisen over the lack of, or the expression of just these basic contract terms. For this reason, all purchase and sale agreements will (or should) contain at a minimum the name of the parties involved in the real estate transaction and the signature of the parties that must carry out the terms as described in that agreement.
Please see the article, “Buying a Home in Massachusetts, Part II – Description of Property, What’s Included, and Purchase Price” for more information on the ideal purchase and sale agreement in Massachusetts.
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