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If you’ve recently bought or sold a home in Montgomery County, you probably recognized that the home sale contract was quite lengthy.
In fact, depending on the situation and additional addenda, a contract can be fifty-plus pages. Many ask, “Why are our home sale contracts are long winded?”
It’s important to mention that property sale contracts around the country are not the same. Every jurisdiction has their own criteria for a home sale contract.
A recent client who relocated from New Jersey shared their home sale contract, which was a fraction of the size of our local contract. Likewise, a colleague asserted the same about the property contracts in Arizona, where he was licensed for a number of years.
Property sale contracts go back into antiquity.
Most likely, ancient contracts formed a basis of ancient record keeping.
These ancient contracts were also “promises” that were enforced in some manner that was keeping with the time.
For example, The History Blog (thehistoryblog.com) tells the account of the Mogao Caves which are located in the Gobi Desert and date back to the fourth century.
One of the caves held a cache of financial documents from medieval China, including property sale contracts and records!
According to the legal historian A. W. B. Simpson, modern English contract law has roots in the middle ages (A History of the Common Law of Contract: The Rise of the Action of Assumpsit; Clarendon Press; 1987). The contract was founded in the concept of “assumpsit, which was the basis for resolving “broken promises.” Assumpsit allowed individuals to bring claims of broken promises to local courts.
Although the practice was traced back to the 13th century, court hearings were routine in the sixteenth century. This model became the basis for enforcing a private contract.
It wasn’t until 1677 when the English Parliament enacted “An Act for the Prevention of Frauds and Perjuries,” known today as the Statute of Frauds.
According to Russell Decker, the Parliament enacted the law that required contracts to be written, because parties obliged by a contract were not allowed to provide testimony in court (The Repeal of the Statute of Frauds in England; American Business Law Journal; 1973; 11:1 p55).
The written contract was the “witness” to a promise. However, most of the Statute of Frauds was mostly repealed in England in 1954.
The Statute of Frauds is still alive and well in the US and the basis for the real estate contract in Maryland. Statute of Frauds is a subtitle of the Real Property Act of the Code of Maryland. Section 5- 104 Executory Contracts states: “No action may be brought on any contract for the sale or disposition of land or of any interest in or concerning land unless the contract on which the action is brought, or some memorandum or note of it, is in writing and signed by the party to be charged or some other person lawfully authorized by him.”
So ok, home sale contracts need to be in writing, but why are our contracts lengthy?
The reason is because the Code of Maryland requires specific notices and disclosures to be included in the sales contract. Besides the expected list of notices and disclosures (such as property condition), there is a compendium of additional required notices and disclosures that is found in the Miscellaneous subtitle of the Real Property Act section 14- 117 Contracts for Sale of Property