Problems You Never Want to See

Presented by Kay M. Creasman | VP & Virginia State Counsel

Sometimes, when you read a deed, you just have to shake your head and wonder, “What were they thinking? Were they thinking?” Here is one example:

FACTS: Our problem starts with a parcel that’s subdivided by Mom in 2000 into G-1, G-2 and G-3. In 2001, she sells G-2 to her son and his wife with specific provisions in the deed. One provision says, “Grantor reserves to herself, her successors, and assigns a right of first refusal,” regarding the sale of G-2.

The deed then provides standard details for a ROFR (30 days written notice to owner of G-1 once owners of G-2 have a contract, etc.) The deed further states, “When G-2 is sold, the “Grantor, her successors and assigns” will be paid $50,000.” Mom sold G-1 in 2002 and then passed away a few months later. 

In 2025, son and wife, owners of G-2, want to sell their real estate and find they must give the owners of G-1 a ROFR plus $50,000, according to the deed.

Q: Surely Mom didn’t intend for son to pay the owner of G-1 $50,000 after she sold the real estate. How do you get it to close?

A: From an underwriting point of view and title insurance perspective, there are a few options:

1. The owner of G-1 either waives these two rights;
2. The owner of G-2 complies with these two deed provisions, or;
3. The owners of G-2 obtain a court interpretation that says either or both of the provisions are unenforceable.

Generally, the courts will give words their plain, standard, clear meaning. The attorney drafting the deed may have meant to say “heirs and assigns” instead of “successors and assigns” but that’s not the language used here. This deed could have been drafted many ways to avoid the unintended consequences that have occurred.