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Quote of the Day - The big print giveth, and the small print taketh away. - Unknown
The Dance Between Selling Property And The Subdivision Map Act
Can you sell real property that would otherwise require a parcel map before that parcel map is recorded? No - under the Subdivision Map Act - according to California courts in the case of Black Hills Investments v. Albertson's.
Here's how it all got started: Apparently, Albertsons sold two parcels to Black Hills, which then decided that it didn't want to buy, and sought its deposits back. It also started looking for a way out of the Purchase and Sale Agreements to buy the properties. Under the terms of the contracts, Albertson's was required to record a parcel map on the larger parcel so it could sell the two smaller parcels to Black Hills.
Unfortunately for Albertson's, there was a contract provision that allowed it to unilaterally waive its obligation to record the parcel map if it was unable to gain goverment approval to subdivide the larger parcel prior to the closing date.
Tsk, tsk, tsk, said the court. The Subdivision Map Act requires parcel maps to be recorded before smaller properties can be sold out of a larger parcel, and there's no exception to the exception. You can, however, enter into an agreement to sell undivided property, but you have to record the parcel map prior to the closing date.
Albertson's didn't, and consequently lost the sale of the two parcels.