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Land-Sale Contracts in West Virginia

November.01.2013

 

By Philip Q. Ratliff, Esq.
Edited by Robert E. Altman, III, Esq.
 
In West Virginia, a lender will generally not be able to summarily evict a land contract vendee by resorting to an eviction in Magistrate Court (the Court that typically handles evictions).   
West Virginia Code section 38-1-1 allows a land contract to be enforced by a suit in equity.  The statute does not specifically allow a land contract to be enforced by any other method.  We have located multiple cases in West Virginia over the last 150 years in which a land contract was enforced by judicial action, but we have located no reported cases in which a vendor in a land contract could terminate a land contract by a simple eviction proceeding in magistrate court.   Among the many cases in which the rights and obligations of a land contract vendor and vendee were addressed by the West Virginia Circuit Court are: Bryant v. Willison Real Estate Co, 350 S.E.2d 748 (1986); Hinerman v. Rodriguez, 736 S.E.351 (2012); Timberlake v. Heflin, 379 S.E.2d 149 (1989); Stephenson v. Rice, 12 W.Va. 575 (1878); Thomas v. Collins, 93 W.Va. 678 (1923); Clark v. Harpers Ferry Timber Co., 70 S.E. 919 (1912);  Conaway v. Overholt, 108 S.E. 426 (1921); Gebhart v. Shrader, 83 S.E. 925 (1914); Rosier v. McDaniel, 28 S.E. 908 (1944); Dolan v. Hardman, 29 S.E.2d 8 (1944); and Home Nat. Bank of Sutton v. Boyd, 140 S.E.482 (1927). 
Under West Virginia Code Section 50-2-1, Magistrate Courts do not have jurisdiction of matters involving real estate; the Court has jurisdiction of matters involving unlawful entry or detainer of property, among other issues.  Under this statute, matters involving interests in real estate are specifically excluded from the Magistrate Court’s jurisdiction. 
A contract for deed conveys equitable title to the vendee, with legal title remaining in the vendor.  After the execution of a valid contract of sale and before the legal title passes by deed, the vendor is regarded in equity as holding the legal title in trust for the vendee, and the latter as holding the purchase money in trust for the vendor; the purchaser thereby acquires a vendable interest, an equitable estate.  See Timberlake v. Heflin, 379 S.E.2d 149, 155 (1989).  For this reason, we do not believe that you can resort to a simple eviction proceeding in Magistrate Court to terminate a land contract.   In addition, see Dishman v. Jarrell, 271 S.E.2d 348 (1989), where a Magistrate Court was prohibited from evicting a land contract vendee that claimed an equitable interest resulting from a land contract.
Based upon the foregoing, we believe any action in West Virginia to enforce or terminate a land contract would require a judicial action in Circuit Court.  Moreover, any such proceeding would require joining all parties with an interest in the real estate.  See Clark v. Harpers Ferry; Conaway.; Overholt; Gebhart v. Shrader above.