In a real estate transaction, the parties often sign a purchase agreement that calls for a closing, during which a deed is transferred to the buyer for the property. The terms of the purchase agreement are likely to change due to the Merger Doctrine.
According to the Merger Doctrine, when a deed is produced and accepted as fulfillment of a contract to transmit, the contract is merged into the deed. When the fulfillment of a contract is acknowledged by the delivery of a deed to transmit property, the contract is merged into the deed. The rights of the parties are then established via the deed.
Assume you are a property seller who also owns mineral rights to that property. You want to sell the property but keep your mineral rights, so you draft a sales contract with your buyer and agree to keep your mineral rights interests. However, because you did not read the deed carefully before signing, you discovered after closing that the deed did not retain your mineral rights. You would not retain mineral rights under the Merger Doctrine if the sales contract did not contain any survival language or if the survival language did not specifically refer to the mineral rights.
By looking for survival language in your sales contract, you may be able to avoid the Merger Doctrine. This phrase specifies precisely which clauses of the sales contract will remain in effect after the closure and after the deed has been delivered. Other sales contracts feature survival clauses that specify all covenants, representations, and warranties in the contract will survive closure. Some contracts simply designate specific sections that survive past closing.
If you are concerned about specific rights, covenants, or warranties regarding your property, it is critical that you seek the advice of an experienced real estate attorney. Our board-certified real estate attorney may assist your negotiating and drafting process to ensure the best possible outcome for everyone involved. Please call us at 713-572-4900.