The Mississippi Supreme Court has stated the following:
“Where the language of an otherwise enforceable contract is subject to more than one fair reading, the reading applied will be the one most favorable to the non-drafting party.” Facilities, Inc. v. Rogers-Usry Chevrolet, Inc., 908 So.2d 107, 111 (Miss. 2005).
“Ambiguities in a contract are to be construed against the party who drafted the contract.” Union Planters Bank, National Association v. Rogers, 912 So.2d 116, 120 (Miss. 2005).
Miss. Code Ann. §83-58-7 requires builders to provide home buyers written notice of the requirements of the New Home Warranty Act at the time of closing. Failure to do so results in the extension of the warranties provided in the New Home Warranty Act. You can read the terms of the New Home Warranty Act by visiting the Mississippi State Board of Contractors website at www.msboc.us
Covenants will set forth requirements, such as the minimum size of a house that can be built in a lot. The primary function of covenants is to provide uniformity amongst the lots/properties and help protect property values. Before signing a contract, read all applicable covenants and make sure nothing within them will cause you problems (ex: if you want to build a 1,500 sq. ft. house, you do not want to buy a lot that requires a 2,000 sq. ft. minimum home).
If you are selling property, it is a good practice to provide the Buyer with a copy of the covenants prior to signing the contract.
Yes, but be careful. If a contract provision is to survive the deed, make sure it is stated so in the contract (i.e., the merger doctrine may bar an obligation or duty of the Seller if not stated that it survives the deed).
Certainly, everyone wants to limit what they pay in closings costs. There are no set rules as to which party pays certain expenses, as everything is negotiable. Typically, the contract will state that the Seller’s closing expenses are capped at a certain amount, such as “Seller will pay up to $2,000 in closing costs and all other closing costs shall be paid by the Buyer.”
Also, if the Buyer is getting an FHA loan, make sure it is clear that the Seller is only paying what is stated in the contract. FHA loans require Sellers to pay certain expenses, so you should ask the lender for this information before entering into a contract.
Each contract is unique and it depends on the situation. Before entering into a contract, think about what you need for the property to meet your needs. As the Buyer, you want to provide as many “outs” as possible, such as:
The Buyer may declare this contract null and void and have the full amount of his earnest money returned to him if:
- Property is not zoned for his particular use, development, etc.
- Buyer finds the property’s soil to be unsuitable.
- Buyer cannot secure a loan in the amount $____ or more, amortized over ____ years, with interest not to exceed ___% per annum.
- (Anything else you can think of that is important to you as the Buyer, insert as a contingency.)
A contract must have consideration, even if it is “but a peppercorn.” The earnest money amount is negotiable and can be whatever the parties agree upon. As a rule of thumb, 1-2% of the purchase price is common.
If the property is in a subdivision, you should use the legal description, such as Lot ______, Castlewoods, Phase __________, Rankin County, MS.
If the property has a metes and bounds description, you may attach a copy of the legal description as an Exhibit to the contract and have the parties sign the legal description agreeing to incorporate it into the contract.
If you do not have either of the above descriptions, then an address or parcel number will usually suffice. However, DO NOT, for example, use a generic description like “two (2) acres subdivided from the Seller’s ten (10) acres,” as this is not specific enough to show a meeting of the minds.