A real estate agent recently asked me about the meaning of the survival clause in the contract. The agent thought that the survival clause meant that if a party to the contract died, her family still had to purchase the house.
The survival clause is Paragraph 28 in the Central Carolina REALTORS Association contract and Paragraph 13 in the South Carolina Association of REALTORS contract. The paragraphs are worded exactly the same in both contracts. The section reads: “If any provision herein contained which by its nature or effect is required to be observed, kept, or performed after Closing, it will survive the Closing and remain binding upon for the parties hereto until fully observed, kept or performed.”
The paragraph does not deal with what happens if a party to the contract dies; rather, the language of the paragraph holds that if a provision in the contract is for an event that would occur after closing, then that event survives the closing and does not terminate upon acceptance of the deed. The Doctrine of Merger is a legal theory that holds that all terms of the contract merge into the deed at closing and that once the deed is executed all terms of the contract are considered completed. Absent the survival provision, any term that was to survive the closing would be considered to have merged with the deed and no longer be enforceable and the party’s failure to perform would not be actionable. For example, if the parties agreed in the contract that the seller would replace the roof post-closing, the lack of a survival provision could render that provision no longer valid after acceptance of the deed.
Hopefully, this will assist you in better explaining this provision to your clients.
HERE IS A VERY INTERESTING ARTICLE ABOUT THE AGING OF BABY BOOMERS AND CHANGING DEMOGRAPHICS FROM THE AMERICAN LAND TITLE ASSOCIATION.