Q: Hi,Can a buyer/mortgage holder/beneficiary be demanded to do this or be threatened to go to court?
In the event of a Triggering Event Consisting in the death of Grantors, or an intent to gift, lease, extend options for use or purchase or other transfer of beneficial interest in the surface estate to the Premises to anyone other than a Grantor, prior to effecting any such transfer, Grantors, or the survivor of them, or their guardians, agents or personal representatives shall give written notice to all Grantees hereunder, by the means set forth in paragraph 4 hereof, which notice shall detail the terms of the intended gift or transaction or of the event of death. Grantees shall each have thirty (30) days from receipt of such notice to elect to purchase all or part of the Premises as being offered, for its fair market value as determined by appraisal. The appraisal shall be done at Grantors’ expense and reimbursed by Purchasing Grantee. The highest bidding Grantee, bidding more than the fair market value, shall be the successful purchaser.
A: It depends on a number of factors, such as whether this is a private agreement or it is on the record. If it is not on the record, then it would not be enforceable AGAINST a buyer or a mortgage holder because they had no notice of it, but it still would be enforceable against the Grantor for damages if the Grantor does not comply.
If it is on the record, then any buyer would be well-advised to ensure that those steps were followed before purchasing the property. But an attorney would need to review the documents to be certain.
Most likely it is not enforceable against a mortgage holder, but it does depend on when the mortgage was recorded compared to when this covenant was recorded and a full reading of the covenant and whether the mortgage holder is related to any of the parties and whether the mortgage holder obtained a subordination of this covenant, and more.
The bottom line is nobody in this forum can answer your question without reviewing the document and the condition of title.
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