The California Court of Appeal has held that a real estate contract that allowed the buyer to waive the recordation of a final map before purchasing a portion of a legal lot violated the Subdivision Map Act and was therefore void at its inception.
Sixells entered into a contract to purchase four acres of land within a proposed subdivision from Cannery Business Park. The contract allowed Sixells to complete the purchase if, at its election, either the four acres were made into a separate legal parcel by recording a final map or if Sixells “waived” the recording of a final map. Before the sale occurred, Cannery terminated the contract and sold the entire proposed subdivision to another party. Sixells sued to enforce the contract and force sale of the four acres to it.
The Court of Appeal held that the contract was void. It noted that the Map Act prohibits the sale, lease, or financing of any land within a proposed subdivision until an approved map is recorded. A contract for sale may be executed prior to approval or recordation of a final map only where the contract is “expressly conditioned” upon recordation of an approved final map. Following Black Hills Investments, Inc. v. Albertson’s, Inc. (2007) 146 Cal.App.4th 883, the court held that because Sixells’ contract was not “expressly conditioned” upon the recording of a final map, but rather allowed Sixells to waive that requirement, it was void as a matter of law at the time it was executed. The court rejected Sixells’ arguments that Black Hills was wrongly decided and that the Map Act did not apply to this sale of real property. It likewise dismissed Sixells’ contention that the waiver language could be “severed” from the remainder of the contract, observing that even without that language, Sixells would have been able to enforce the contract without recordation of a final map in violation of the Map Act since nothing else in the contract conditioned the sale upon recordation of a map.
As with Black Hills, this case reflects the inclination of courts to enforce rigorously the terms of the Subdivision Map Act, and highlights the importance of careful adherence to the Map Act’s requirements in drafting real estate contracts.
Sixells, LLC v. Cannery Business Park 2008 WL 5392422 (Cal. App. 3 Dist. 12/29/2008).
The opinion can be accessed at: http://www.courtinfo.ca.gov/opinions/documents/C056267.PDF
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