Similar adjustments may be made with respect to water, gas, sewer, and electric charges, telephone tolls, and the like.

The contract of sale should include a clause providing for the contingency of the destruction of the property by fire prior to the closing of title. It may provide that the risk of loss by fire prior to the closing shall be borne by the seller, or it may provide that it shall be borne by the purchaser. In the ordinary case, the first provision is the one adopted. From the point of view of the purchaser, it is of importance that this course be followed and that it be specifically provided in the contract of sale that the fire loss, until title is actually closed, is that of the seller and not that of the purchaser. If this course be followed, the purchaser will not assume any fire risk until he has acquired actual title to the property.

With respect to the commission of the broker, the ordinary rule is that his commission is paid by the seller. It is quite customary to include in the contract a statement that a specified broker brought about the sale and that the seller will pay his commission. In many cases the contracts of sale are prepared by the broker, and in such cases a provision to the foregoing effect will usually be included. If the agreement is that

the purchaser shall pay the commission-which in the ordinary case he should not agree to do -the contract should so specify.

It is important that the purchaser guard himself against the danger of being called upon to pay an unfair proportion of special assessments. It is usual to provide that any special assessments confirmed prior to the closing of title shall be paid by the seller. It will be advisable, if possible, for the purchaser to extend this condition so as to provide that the seller will pay, as well, any assessments the proceedings for which are instituted prior to the closing of title. This is a rather broad condition, but in many cases it will be accepted by the seller. It is well worth trying for, in any event.

In practically every case of title closing it is advisable to secure, when possible, a title policy from some reliable title insurance company. When this is contemplated it is an excellent plan to provide, if you can get the seller to consent to it, that the contract to purchase is subject to the approval of the title by the title company and that, if the company does not pass it, the purchaser need not accept title. On the question of title insurance I shall have more to say in a succeeding chapter.

In general, the importance of the contract of

sale and purchase is such that the prudent purchaser should consult his attorney before executing it. Once the contract is signed, his lawyer may be powerless to extricate him from difficulties resulting from it. The expense involved in having it properly passed upon in the first instance is negligible in comparison with the amount involved. There is no stage of the whole process of acquiring title when proper advice is of more importance, or when a stitch in time is more likely to save many times nine stitches later on.

CHAPTER IV

LAND DEVELOPMENTS, AUCTIONS, AND INSTAL

H

MENT PURCHASES

OMES are often acquired under plans which differ materially from the ordinary sale and purchase. A brief separate discussion of these alternative plans is in order.

The last decade has witnessed the inception and growth, to a remarkable extent, of the modern land development scheme. The outstanding characteristics of this method of selling property have been the purchase of a large tract of unimproved land by the promoters of the enterprise, the laying out of roads, more or less complete, and the resale of the property on a lot basis. There is practically no one of the larger cities in the vicinity of which a land development of this character has not been attempted or carried out.

It cannot be justly said that this plan is necessarily unfair to the purchaser. Oftentimes it is the means of working a great benefit and of

making available to those of moderate income country homes which otherwise they never would acquire. Some of the communities thus created have been such as to drive many a lover of the artistic and of sanity in architecture to profanity. Some, handled intelligently and under proper architectural guidance, have been a source of great good. The man who takes unimproved and often waste land and, risking his capital in the enterprise, transforms it, by imagination, energy, and business ability, into a community of homes for hundreds of families theretofore existing in city apartments, deserves thanks and encouragement. It is unfortunately true, however, that many of these developments are of the "shoe-string" variety, financed on inadequate capital, cheaply conceived, and cheaply carried

out.

The purchase of a home under one of these general development schemes is often beset with other problems and dangers than those which characterize the purchase of a home in the ordinary way. In many cases the promoter of the development has purchased the land by giving what is known as a "blanket mortgage" in part payment of the purchase price. By this term is meant a mortgage which covers the whole tract. 'As portions of the property are divided into