Equitable conversion is a doctrine of the

law Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vari ...

real property In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or affixe ...

under which a purchaser of real property becomes the equitable owner of title to the property at the time he/she signs a

contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to ...

binding him/her to purchase the land at a later date. The seller retains

legal title Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vari ...

of the property prior to the date of conveyance, but this land interest is considered

personal property property is property that is movable. In common law systems, personal property may also be called chattels or personalty. In civil law systems, personal property is often called movable property or movables—any property that can be moved fro ...

(a right to the payment of money, rather than a right to the property). The

risk of loss Risk of loss is a term used in the law of contracts to determine which party should bear the burden of risk for damage occurring to goods after the sale has been completed, but before delivery has occurred. Such considerations generally come into ...

is then transferred to the buyer{{spaced ndashif a house on the property burns down after the contract has been signed, but before the deed is conveyed, the buyer will nevertheless have to pay the agreed-upon purchase price for the land unless the seller in possession or deemed in possession has failed to protect it. Such issues can and should be avoided by parties by stipulating in the contract who will bear the loss in such occurrences. The above rule varies by jurisdiction, but is the general rule.

Effect of death of a party

If one of the parties dies after the contract for sale of the property has been executed, the doctrine will govern how that party's interest will pass to his heirs. For example, the seller wills his real property to his son, and his

to his daughter. If the seller dies after a contract for conveyance is signed by a buyer, the seller's interest in the land will be treated as personal property, and the proceeds of the sale will pass to his daughter. In most jurisdictions, the real property interest created by the contract will pass to the buyer's heirs, while the seller's personal property interest created by the contract will pass to the seller's estate. The

State State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * '' Our ...

New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...

does not recognize equitable conversion. In New York, as long as the buyer is without fault, the risk of loss remains on the seller until the buyer takes title or possession.

Uniform Vendor and Purchaser Risk Act

A growing minority of States have adopted the

Uniform Vendor and Purchaser Risk Act A uniform is a variety of clothing worn by members of an organization while participating in that organization's activity. Modern uniforms are most often worn by armed forces and paramilitary organizations such as police, emergency services, s ...

(UVPRA) in one form or another.Rabin, Edward et al. Fundamentals of Property Law. Foundation Press: New York, 2006. pp. 1128–1129. The UVPRA bases the legal consequences of no-fault casualty loss on the right of possession of the property at the time the loss occurs. See Brush Grocery Kart v. Sure Fine Market, 47 P. 3d 680 (Colo. 2002). Generally, the provisions of the UVPRA can be modified or avoided in the Land Sale Contract.

The "Massachusetts Rule"

In Massachusetts and a handful of other states, the seller continues to bear the risk until the title is actually transferred to the buyer, unless there is an agreement to the contrary. See Brush Grocery Kart v. Sure Fine Market, 47 P. 3d 680 (Colo. 2002).

References

Property law Equity (law)