Under land contracts, when does risk of loss transfer to buyer?

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Prepare for the New York Multistate Bar (MBE) Exam. Study with tailored flashcards and multiple-choice questions, each offering insightful hints and detailed explanations. Boost your confidence and readiness!

Multiple Choice

Under land contracts, when does risk of loss transfer to buyer?

Explanation:
In a land contract, the seller keeps legal title while the buyer has equitable title and usually possession during performance. Because ownership isn’t fully transferred until the contract closes, the risk of loss remains with the seller up to that point. When the contract closes and the deed is delivered, title passes to the buyer and the risk of loss shifts to the buyer from that moment forward. So, if the property is damaged before closing, the seller generally bears the loss; after closing, the buyer bears it.

In a land contract, the seller keeps legal title while the buyer has equitable title and usually possession during performance. Because ownership isn’t fully transferred until the contract closes, the risk of loss remains with the seller up to that point. When the contract closes and the deed is delivered, title passes to the buyer and the risk of loss shifts to the buyer from that moment forward. So, if the property is damaged before closing, the seller generally bears the loss; after closing, the buyer bears it.

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