USA – LOUISIANA Law and Practice Contributed by: Jeffrey P. Good, Susan M. Tyler and B. Trevor Wilson, Jones Walker LLP
2. Sale and Purchase 2.1 Categories of Property Rights
in “authentic form” in the presence of a notary public and two witnesses, which is the only form of “self-proving” act. An act of sale must be signed by the individ - ual who owns the property or by an individual properly authorised to sign and deliver the act of sale on behalf of the legal entity that owns the property. Corporate resolutions or appropriate evidence of authority should be attached to the act of sale or separately recorded. 2.3 Effecting Lawful and Proper Transfer of Title As between the parties, the transfer of owner - ship takes place immediately upon the execution and delivery of the act of sale. In order to be effective against third persons, the act of sale must be recorded in the conveyance records of the parish (the Louisiana equivalent of a county) in which the immovable is located. It is common in all commercial real estate trans - actions for the buyer to obtain an owner’s policy of title insurance. Louisiana is “fixed rate” state, which means that premiums for title insurance are submitted for and approved by the Louisiana Department of Insurance. Agents are prohibited from modifying such rates or rebating insurance premiums. 2.4 Real Estate Due Diligence For commercial transactions, buyers are usually afforded a due diligence period under the pur - chase agreement, and typically obtain a Phase I environmental report, an American Land Title Association/National Society of Professional Surveyors (ALTA/NSPS) survey and a commit - ment for title insurance. Unless there are unique circumstances, the buyer’s lawyer will typically obtain the survey and title commitment at the buyer’s expense. Additional diligence may be
Real estate may be owned by one or more persons or juridical entities. Ownership of real estate by two or more persons or juridical enti - ties is referred to as “ownership in indivision” . Although the Louisiana Civil Code provides for the management and common use of property owned in indivision, commercial practice is for common ownership of property to be held indi - rectly through a single juridical entity such as a corporation, limited liability company (LLC) or limited partnership. In addition to full (fee) ownership, which includes the right to use and enjoy the property, a person or juridical entity may obtain the following inter - ests in real estate: • a leasehold interest for up to 99 years; • a servitude (easement in common law), such as a right of passage; • a usufruct (life estate in common law); • a right of habitation (right to dwell in the house of another); or • a personal servitude of right of use (right of specified use). 2.2 Laws Applicable to Transfer of Title Real property is referred to in Louisiana as immovable property, and is transferred by a con - tract between the owner and transferee. Such a contract is typically referred to as an act of sale. While there is no legal requirement for an act of sale to be witnessed or notarised, the Louisiana uniform title standards require that such instru - ments be “in a form which would allow their introduction into evidence in a court proceeding as prima facie proof of their contents” . Accord - ingly, an act of sale should always be executed
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