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DESPITE THE TERMS OF THE REAL PROPERTY PURCHASE CONTRACT, WHICH PURPORTED TO REQUIRE THE DEFENDANT PURCHASER TO FORFEIT ALL MONTHLY PAYMENTS WHICH HAD BEEN MADE AND VACATE THE PROPERTY UPON DEFAULT, DEFENDANT HAD ACQUIRED EQUITABLE TITLE TO THE PROPERTY, PLAINTIFFS’ ONLY AVAILABLE REMEDIES ARE TO BRING AN ACTION TO FORECLOSE OR AN ACTION FOR THE PURCHASE PRICE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that plaintiffs, who had effectively taken back a mortgage on property sold to defendant, could not enforce the purchase contract which purported to declare the contract null and void and require the defendant to vacate the property upon default. Defendant, by making substantial monthly payments pursuant to the contract, had acquired equitable title to the property. Plaintiffs only available remedies are foreclosure or an action at law for the purchase price:

A rider to the [purchase] contract contained a provision providing that in the event the defendant defaulted in making payments under the contract and failed to cure, and that said default resulted in the plaintiffs' inability to pay an existing mortgage on the property, the defendant forfeited all monies paid as liquidated damages, the contract was deemed null and void, and the premises were to be vacated in good condition. * * *

“The execution of a contract for the purchase of real estate and the making of a partial payment gives the contract vendee equitable title to the property” … . “[T]he vendor merely holds the legal title in trust for the vendee, subject to the vendor's equitable lien for the payment of the purchase price in accordance with the terms of the contract” … . Accordingly, the vendee under a land sale contract has acquired an interest in the property that must be extinguished before the vendor can resume possession, notwithstanding whether a provision in the contract provides that in the event of the vendee's uncured default in payment, the vendor has the right to declare the contract terminated and repossess the premises… . A vendor may not enforce his rights by an action in ejectment, but must instead proceed to foreclose the vendee's equitable title or bring an action at law for the purchase price … .

The defendant, having executed a contract for the purchase of property from the plaintiffs, and having made substantial payments to the plaintiffs pursuant to the contract, held equitable title to the property… . Under these circumstances, upon the defendant's default in making payments under the contract, the plaintiffs could not seek relief pursuant to the provision of the rider that provided for the contract to be deemed null and void, the premises vacated, and the defendant to forfeit all monies paid as liquidated damages. The plaintiffs were required to proceed to foreclose the defendant's equitable title or bring an action at law for the purchase price … . Russell v Pisana, 2018 NY Slip Op 05789, Second Dept 8-15-18

FORECLOSURE (DESPITE THE TERMS OF THE REAL PROPERTY PURCHASE CONTRACT, WHICH PURPORTED TO REQUIRE THE DEFENDANT PURCHASER TO FORFEIT ALL MONTHLY PAYMENTS WHICH HAD BEEN MADE  AND VACATE THE PROPERTY UPON DEFAULT, DEFENDANT HAD ACQUIRED EQUITABLE TITLE TO THE PROPERTY, PLAINTIFFS' ONLY AVAILABLE REMEDIES ARE TO BRING AN ACTION TO FORECLOSE OR AN ACTION FOR THE PURCHASE PRICE (SECOND DEPT))/REAL PROPERTY LAW  (DESPITE THE TERMS OF THE REAL PROPERTY PURCHASE CONTRACT, WHICH PURPORTED TO REQUIRE THE DEFENDANT PURCHASER TO FORFEIT ALL MONTHLY PAYMENTS WHICH HAD BEEN MADE  AND VACATE THE PROPERTY UPON DEFAULT, DEFENDANT HAD ACQUIRED EQUITABLE TITLE TO THE PROPERTY, PLAINTIFFS' ONLY AVAILABLE REMEDIES ARE TO BRING AN ACTION TO FORECLOSE OR AN ACTION FOR THE PURCHASE PRICE (SECOND DEPT))/REAL ESTATE  (DESPITE THE TERMS OF THE REAL PROPERTY PURCHASE CONTRACT, WHICH PURPORTED TO REQUIRE THE DEFENDANT PURCHASER TO FORFEIT ALL MONTHLY PAYMENTS WHICH HAD BEEN MADE  AND VACATE THE PROPERTY UPON DEFAULT, DEFENDANT HAD ACQUIRED EQUITABLE TITLE TO THE PROPERTY, PLAINTIFFS' ONLY AVAILABLE REMEDIES ARE TO BRING AN ACTION TO FORECLOSE OR AN ACTION FOR THE PURCHASE PRICE (SECOND DEPT))/CONTRACT LAW (REAL ESTATE, DESPITE THE TERMS OF THE REAL PROPERTY PURCHASE CONTRACT, WHICH PURPORTED TO REQUIRE THE DEFENDANT PURCHASER TO FORFEIT ALL MONTHLY PAYMENTS WHICH HAD BEEN MADE  AND VACATE THE PROPERTY UPON DEFAULT, DEFENDANT HAD ACQUIRED EQUITABLE TITLE TO THE PROPERTY, PLAINTIFFS' ONLY AVAILABLE REMEDIES ARE TO BRING AN ACTION TO FORECLOSE OR AN ACTION FOR THE PURCHASE PRICE (SECOND DEPT))

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