Wachovia Bank v. LIFETIME INDUSTRIES, INC.
Opinion
Opinion
King, J.
INTRODUCTION
When the holder of an option to purchase real property exercises the option and thereby obtains title to the property, the optionee’s title relates back to the date the option was given. As a result, interests in the property that arose between the date of the option and the transfer of title to the optionee are extinguished if the owner of the intervening interest had notice of the option. In this case, we consider whether evidence that an optionee has obtained title to property that is the subject of the option is sufficient to extinguish an intervening lien when there is no evidence that the optionee’s title was obtained pursuant to the option. We hold that it is not. In order for an optionee to have the benefit of the relation-back rule, the optionee must have been able to compel specific performance of the option. If an optionee did not have the right to specific performance of the option, but nevertheless obtains title to the property outside the purview of the option, the optionee has no greater priority among competing claims to the property than any other purchaser of the property.