Oregon Real Estate Practice Test

When can lots in a subdivision be sold under a binding contract?

1. After the initial sale

2. Once the buyers express interest

3. After the plat has been recorded

4. Only after building permits are acquired

The correct answer is: After the plat has been recorded

In real estate, particularly with subdivisions, the recording of the plat is a crucial step in the process of selling lots. A plat is a detailed map that outlines the subdivisions including individual lots, streets, and easements. Once the plat is officially recorded with the appropriate county or municipality, it provides the legal framework necessary for the sale of individual lots. This recording ensures that the subdivision complies with zoning laws, is approved by local authorities, and that there is a clear, legal description of each lot to be sold. Therefore, the sale of lots can only occur once this formal process is completed, making it essential for the protection of both the buyers and the developers. The other scenarios provided do not establish a legal basis for selling lots. For instance, selling after an initial sale does not ensure that subsequent sales are valid without the recorded plat. Similarly, simply expressing interest from buyers does not grant the right to sell or legally bind them to the purchase without a recorded plat. Lastly, acquiring building permits is a separate process related to construction rather than the legal sale of property lots. Thus, the necessity of having the plat recorded is what allows for the sale of lots under a binding contract.