hard · National Real Estate Exam contracts
A buyer and seller have a signed contract. Before closing, the city files a petition to condemn the property for a new library.
Under the doctrine of equitable conversion, what happens to the condemnation award?
- The award belongs entirely to the seller since legal title has not yet passed to the buyer
- The award belongs to the buyer, but the buyer must still pay the full purchase price to the seller.
- The buyer and seller must split the condemnation award proportionally based on the earnest money deposited
- The contract is automatically voided by the condemnation, and the city must pay the seller for the land alone
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