Recently, I was watching “Mountain Men” on the History Channel. If you are unfamiliar with it, it is a “reality” show that follows around a handful of individuals and their families in different regions of the United States who more or less “live off the land.”
In some recent episodes, Eustace, who lives in the Blue Ridge Mountains in North Carolina, found out that his neighbor was selling his land, which was about 150 acres. Apparently, the neighbor had indicated there was more than one bidder, and the first one to get a $30,000 down payment to him would get the land. As such, the next few episodes showed Eustace cutting trees for neighbors, building handmade wooden furniture, butchering a hog and doing other odd jobs to procure a $30,000 down payment. In the season finale, the viewer saw Eustace using his horse to race to his neighbor’s place to hand-deliver a bag of cash with the $30,000 in it. Eustace then said he would make subsequent monthly payments to the neighbor.
Land contract must be in writing
As a lawyer watching this, a few things stand out. First, all states have some form of the Uniform Commercial Code Statute of Frauds. Wisconsin’s Statute of Frauds is found in Chapter 706 of the Wisconsin Statutes. It states in part that for conveyances of land (such as a land contract, as Eustace was doing) and for leases for more than one year, the contract has to be in writing and signed to be legally enforceable. As with most laws, there are exceptions. One exception, which may apply in Eustace’s case, is where you partially perform. Here, Eustace has made a down payment and has it on camera to prove it! If he really bought this land without a written land contract, he may still have a valid claim to it because he can prove that he has partially performed.
Written agreement with seller
Second, rather than this apparent race with another interested potential buyer, Eustace may have been better served by entering into a written and signed offer to purchase with the seller. The offer could have stated when the down payment was due, and it could have said it was null and void if the deadline was not met. An offer to purchase would also have protected him in the event his neighbor died before he could raise the down payment. If that had been the case, Eustace could still have enforced the offer to purchase against the neighbor’s estate, provided he otherwise met its terms.
Third, whenever you are buying real estate, even on a land contract, a title search should always be done. A title search would not only disclose any outstanding mortgages, liens or judgments, but would also disclose any easements, covenants or other restrictions on the land. These are all matters buyers should know before buying the land. If there are any outstanding mortgages, liens or judgments, a title company can make sure those matters are paid for with the purchase price. Most easements, covenants and other restrictions run with the land, meaning when the land is sold, the buyer is still obligated to follow them.
These are all things that should be known ahead of time before putting down a significant down payment.
Fourth, if there was a well, private septic system or other improvements on the property, Eustace might have wanted those items inspected before buying them. If, for example, it turns out the water is high in nitrates, bacteria or arsenic, he might have wished he had the water tested before buying the property instead of now having to deal with the problem himself at his cost — assuming it is even fixable.
I realize that filming Eustace racing his horse to his neighbor’s property and handing him a bag of cash before any other interested buyer is a bit more dramatic than watching Eustace drive his truck to town to sign legal papers at a title company. That being said, I don’t suggest that anyone rely on “Mountain Men,” “Judge Judy,” “Law & Order,” or any television show for their legal knowledge.
Halbach is a partner in the agricultural law firm of Twohig, Rietbrock, Schneider and Halbach. Call him at 920-849-4999.