24. Water-meter charges.—T his. provision is made so that the owner of the property shall pay for metered water consumed during his ownership. In many cases no water meter is on the premises, a flat charge for the year being made by the city. If so this clause has no application, and no apportionment is made be tween the parties.
25. Form of deed stipulated in contract of sale.— The contract quoted provides that the seller at his own expense will execute and acknowledge a deed convey ing a fee simple title to the purchaser in accordance with the terms of the contract. The deed is to be the statutory short form of the full covenant and warranty deed—that is to say, the form prescribed by statute, by which the instrument is reduced to a simple form of words. Just what such a form contains we shall see when we come to the chapter on "Deeds." It is suf ficient to remark here that many sellers, especially those acting in a representative capacity, will not give a warranty deed and the contract may then provide for a bargain and sale deed, or it may state that vendor being a trustee, he will give no covenants or only the usual trustee covenants. This, however, needs to be mentioned in the contract or they do not pass. Both forms of deeds convey the same title, but the full covenant and warranty deed in addition contains certain warranties we shall discuss later.
26. Personal property included in sale.—Certain articles of personal property used in connection with the real estate are usually included in the sale. In the case of an apartment house these are, for example, shades, carpets, gas stoves, janitor's tools, etc. They are part of the property, as a building in actual use, and ought by right to go to a purchaser, altho they are not strictly a part of the realty.
27. Earnest money a order to protect the purchaser to the extent of the money he pays on the contract, it is provided that such payment and the reasonable expenses of examining the title shall be a lien on the premises. That is, he can look to the prop erty, or the seller's interest in it for the return of these amounts if the contract is not carried out. It is fur ther provided, however, that this lien does not con tinue if the purchaser should default in his agreement to buy the property.
28. Risk of damage by the deed is de livered, the purchaser is entitled to get a building, or buildings, in practically the same state as when the contract was signed. It may be held that the pur chaser's interest was such that he could insure, and that he ought to take the title even though the building had been damaged by fire during the interim. In order to
protect the buyer against such a claim, the wording of the contract places the risk of loss on the seller.
If the subject of the sale is a piece of land the value of which is large compared to the buildings on it, there may be a provision that the title shall pass even tho the buildings be damaged by fire, but that the seller shall turn over to the buyer any amounts he may have collected from fire insurance companies to cover the loss. It may also be that the value of the buildings is so comparatively small that the fire risk is not consid ered at all, or the contract may provide that the vendee shall be entitled to the benefit of the existing fire insurance on the premises.
29. Coytract binding on heirs or seller or purchaser may die between the time of mak ing the contract and of closing the title. If the seller dies, his heirs or executors are obliged to carry out the contract. If the purchaser dies, his executors or ad ministrators should pay the purchase price. Either party may assign his interest in the contract. If the seller conveys the land to a third person who knows of the contract, that person would have to carry it out. If the purchaser assigns his contract another prin ciple applies, i.e., a person can assign his rights but not his liabilities. The assignee could pay the purchase price and get the title, but he could not be compelled to do so unless he had expressly assumed the obliga tion.
30. Signature, seal, witness and acknowledgment. contract should be signed, sealed and witnessed, but it need not be acknowledged. The signatures of both parties are necessary in order that each-may hold the other, for the contract cannot be enforced against one who has not signed it. The parties need not sign the same copy, but may sign counterparts.
Seals are important for three reasons: (1) a seal imports consideration, and the burden of proof is on the one who attacks the instrument alleging lack of consideration; (2) an undisclosed principal cannot be held, since only the one signing a sealed instrument is liable under it; (3) the statute of limitations in New York State is twenty years on a sealed instru ment, but only six years on one unsealed and a similar proportion exists in most states.
The contract should be witnessed merely in order to prove the signatures of those whose names are sub scribed. Acknowledgments are added to instruments in order that they may be recorded, but as contracts are not usually recorded, they are not usually aclmowl edged.