Real Estate Purchase Agreement – Marketable Title


Anderson v. Coleman, et al., [Ms. 1210011, June 10, 2022] __ So. 3d __ (Ala. 2022). The Court (Bryan, J.; Bolin, Shaw, Wise, Mendheim, Stewart, and Mitchell, JJ., concur; Parker, C.J., concurs in part and concurs in the result in part; Sellers, J., concurs in the result) reverses the Baldwin Circuit Court’s summary judgment dismissing Terri Anderson’s (“Anderson”) claim for specific performance of a real estate contract. The sellers who entered the purchase agreement with Anderson owned the property subject to a vendor’s lien on the property held by a former owner of the property, Robert S. Bowling, III (“Bowling”). The lien held by Bowling expressly provided that the sellers did not have a right to prepay the note secured by the vendor’s lien. Ms. *5. The sellers eventually sent a communication to Anderson stating “‘We have voided the contract you sent us and have decided to keep our property.’” Ms. *3.

The Court explains the sellers failed to cite any case invalidating a real estate contract for lack of marketable title “when the buyer is fully informed of potential defects in the seller’s title to the property but nevertheless wishes to purchase the property and fulfill her obligations under the contract.” Ms. *18. Stipulations requiring marketable title “‘are made for the benefit of the purchaser, and subject to waiver.’” Ms. *22, quoting Mitchell v. White, 244 Ala. 603, 607, 14 So. 2d 687, 689 (1943). Accordingly, the Court holds “Anderson has an equitable right to waive the protections that would otherwise be afforded to her by virtue of the marketability requirement of the termination provision and to accept the sellers’ title to the property, even in its ‘dismal’ state.” Ms. *25.

The Court declined to order that Anderson was entitled to specific performance because genuine issues of material fact remain concerning Anderson’s ability to secure financing. Ms. *27, citing § 8-1-42, Ala. Code 1975 (“Specific performance cannot be enforced in favor of a party who has not fully and fairly performed all the conditions precedent on his part to the obligation of the other party, except where his failure to perform is only partial and either entirely immaterial or capable of being fully compensated ....”).

Related Document

Share To: