National Real Estate Exam (PSI)Transfer of TitleEasy
A buyer and seller shake hands on a deal and orally agree that the seller will sign over the deed the following week. Before the deed is signed, the seller changes her mind and refuses to convey. Under general legal principles governing deeds, why is the oral agreement unenforceable to force the transfer?
- ADeeds must be in writing to satisfy the Statute of Frauds
- BDeeds must be witnessed by two disinterested parties to be valid
- CDeeds must be recorded before they have any legal effect
- DDeeds must include the buyer's Social Security number to be enforceable
Show answer & explanationAnswer & explanation
Correct answer: A. Deeds must be in writing to satisfy the Statute of Frauds
The Statute of Frauds requires that any conveyance of an interest in real property be in writing and signed by the grantor to be legally enforceable. An oral promise to convey real estate, no matter how sincere, cannot be specifically enforced because it fails this writing requirement.
Why the other options are wrong
- B. Witness requirements vary by state and relate to acknowledgment, not the core writing requirement.
- C. Recording gives constructive notice to the world but is not required for a deed to be valid between the original parties.
- D. Social Security numbers are never a legal requirement for deed validity.
Statute of Frauds (Deeds)
A legal principle requiring that contracts and conveyances involving real property be in writing and signed to be enforceable.
- Oral agreements to convey land cannot be enforced
- Applies to deeds, real estate contracts, and leases over a certain term
- Protects against fraudulent claims of ownership transfer
Memory trick: 'If it's not written, it's not real estate.'