Maryland Real Estate Options: Close, but no cigar
By: Myles, March 5th, 2008
Kevin L. Shepher, co-chair of the Real Estate Practice Group of Venable LLP, just published an interesting article in the Maryland Daily Record, entitled: Exercising real estate options: Close does not count.
Option contracts are at the heart of many real estate transactions, so this is an issue, and a holding, that is well worth studying.
The question: Must one seeking to exercise an option to buy real estate match precisely the terms of the option for the exercise to be valid?
The ruling: Maryland’s highest court recently ruled that Maryland law generally imposes an “exact matching” obligation on the optionee. Elderkin v. Carroll, No. 57, Sept. Term. 2007,
Practical rules: The Elderkin case formulates a helpful analytical framework for assessing whether an option has been validly exercised.
Moving forward, practitioners will need to adhere scrupulously to the precise terms of an option when seeking to exercise it. Being liberal with the exercise is perilous, and the Elderkin case makes abundantly clear that it will not hesitate to enforce the exact matching requirement.
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