What Is MOL in Real Estate? Decoding a Commonly Misunderstood Term

MOL in real estate, quite simply, stands for “More or Less.” However, don’t let the apparent simplicity fool you. Its implications in a real estate transaction can be surprisingly nuanced and potentially significant. While seemingly innocuous, understanding how MOL impacts the agreement, particularly concerning property size, boundaries, or quantities, is crucial for both buyers and sellers. It injects a degree of flexibility, but also inherent uncertainty, into the contract. Therefore, navigating this seemingly straightforward term requires careful attention and, ideally, the guidance of a qualified real estate professional.

Understanding the Core Concept of MOL

At its heart, MOL acknowledges that certain measurements or quantities stated in a real estate contract are approximate. These might include the square footage of a building, the acreage of a parcel of land, or the quantity of materials included in a sale (e.g., cords of wood). The purpose of using MOL is to protect both parties from minor discrepancies between the stated figure and the actual measured quantity. It’s not intended to cover gross misrepresentations, but rather reasonable variations.

The key takeaway is that MOL does not mean ‘anything goes’. There is an implied understanding of reasonableness. A vast difference between the stated quantity with “MOL” included, and the actual quantity, may still be grounds for legal dispute.

Where You Might Encounter MOL

You’ll frequently find MOL attached to numerical values in various sections of a real estate contract. Common examples include:

• Property Descriptions: Describing the size of the lot (“5 acres, MOL“).
• Building Dimensions: Specifying the square footage of a house (“2,500 sq ft, MOL“).
• Quantity of Included Items: Detailing the amount of certain materials (“10 cords of firewood, MOL“).
• Easements and Rights of Way: Describing the width or length of an easement (“20-foot easement, MOL“).

The Legal Implications of MOL

The legal weight of MOL hinges on the specific language used in the contract and the applicable state laws. Courts generally interpret MOL as allowing for a reasonable variation, but what constitutes “reasonable” is often a matter of contention. Several factors come into play:

• Percentage of Variation: Is a 5% difference considered reasonable? 10%? There’s no universal answer, and courts will look at the specific circumstances.
• Materiality of the Difference: Does the discrepancy significantly impact the property’s value or usability? If the actual acreage is substantially less than advertised, it could be deemed a material misrepresentation, regardless of the presence of MOL.
• Due Diligence: Did the buyer have the opportunity to independently verify the measurements? A buyer who knowingly waived a survey might have less recourse if a discrepancy is later discovered.

Protecting Yourself When MOL is Used

Both buyers and sellers should take proactive steps to mitigate potential risks associated with MOL:

• Buyers:
  • Conduct Due Diligence: Always verify critical measurements independently, especially if they are central to your decision to purchase. Hire a surveyor or appraiser to confirm the size and dimensions.
  • Clarify Ambiguity: If you’re unsure about the acceptable range of variation under MOL, seek clarification from your real estate attorney.
  • Negotiate Specific Limits: Consider negotiating a more precise definition of MOL, specifying the maximum acceptable percentage difference.
• Sellers:
  • Provide Accurate Information: Strive to provide the most accurate information possible, even when using MOL.
  • Disclose Known Discrepancies: If you are aware of any discrepancies in measurements, disclose them upfront.
  • Avoid Overstating: Don’t exaggerate or misrepresent the property’s size or features, even with the “safety net” of MOL.

MOL in Real Estate: Frequently Asked Questions (FAQs)

Here are 12 frequently asked questions to provide a deeper understanding of MOL in real estate:

FAQ 1: How does MOL differ from “approximately”?

While both MOL and “approximately” indicate a degree of imprecision, they are often used interchangeably in real estate contracts. The legal interpretation is largely the same: both terms imply a reasonable margin of error. However, relying on context and clearly defining your expectations within the contract is always best practice.

FAQ 2: Does MOL allow a seller to intentionally misrepresent property size?

Absolutely not. MOL provides no license to deceive. If a seller knowingly misrepresents the size of a property, even with MOL in the contract, they could face legal consequences for fraud or misrepresentation. MOL protects against minor inaccuracies, not deliberate falsehoods.

FAQ 3: Can a buyer back out of a deal if the actual property size is significantly smaller than advertised with MOL?

Potentially, yes. If the discrepancy is material and significantly impacts the property’s value or the buyer’s intended use, a court might allow the buyer to rescind the contract, even with MOL included. The definition of “significant” is determined on a case-by-case basis.

FAQ 4: Is MOL more commonly used in rural or urban real estate transactions?

MOL is commonly used in both rural and urban real estate transactions. It’s prevalence is related to the complexity of accurately measuring the land. It’s more typically used in instances when precise measurement is difficult or expensive, such as for large tracts of land in rural areas, or properties with irregular boundaries in urban settings.

FAQ 5: What constitutes a “reasonable” variation under MOL?

There’s no definitive answer. What’s considered “reasonable” depends on factors like the specific property, the nature of the measurement, the local market, and the prevailing practices in the real estate industry. A 2% variation might be acceptable for a small urban lot, whereas a 5% variation might be deemed reasonable for a large rural acreage. Court precedent in your jurisdiction offers some guidance, but it’s not always conclusive.

FAQ 6: Should a buyer always get a survey, even if MOL is present?

It’s highly recommended. A survey provides the most accurate depiction of the property’s boundaries and size. While it’s an added expense, it can be invaluable in preventing disputes and ensuring you are getting what you expect. MOL should not be a substitute for due diligence.

FAQ 7: How can a seller protect themselves when using MOL in a listing?

Sellers can protect themselves by being transparent and providing the most accurate information available. Disclose any known discrepancies and avoid exaggerating property features. Mention where the source of the information regarding acreage or square footage came from. Ensure the broker understands the use of MOL and its purpose.

FAQ 8: Does MOL only apply to property size?

No, while property size is a common application, MOL can apply to various quantities or measurements in a real estate contract, such as the quantity of included items (firewood, gravel), dimensions of easements, or the amount of tillable land.

FAQ 9: How does MOL interact with disclosure requirements in real estate?

MOL does not negate a seller’s obligation to disclose known defects or material facts about the property. If a seller knows that the property is significantly smaller than advertised, they cannot hide behind MOL to avoid disclosing this information. Disclosure obligations remain paramount.

FAQ 10: Can MOL be challenged in court?

Yes, MOL can be challenged in court if a party believes that the variation exceeds what is reasonable or if they believe the other party acted in bad faith. The outcome of such a challenge will depend on the specific facts of the case and the applicable state laws.

FAQ 11: Is it possible to negotiate a more specific definition of MOL in a contract?

Absolutely. Instead of relying on the general understanding of MOL, buyers and sellers can negotiate a specific percentage or numerical limit on the acceptable variation. For example, the contract might state “5 acres, MOL, with a maximum variation of 2%.” This provides greater clarity and reduces the risk of future disputes.

FAQ 12: Does MOL have the same meaning in every state?

While the basic concept of MOL is generally consistent across states, the specific legal interpretation and the factors considered in determining “reasonableness” can vary. Consult with a real estate attorney in your state to understand the nuances of MOL in your jurisdiction.

The Bottom Line

MOL in real estate is a seemingly simple term with the potential for complex implications. Understanding its purpose, limitations, and potential risks is crucial for both buyers and sellers. Always prioritize due diligence, seek professional advice, and clearly define your expectations to navigate this seemingly simple, but often misunderstood, term. When in doubt, consulting with a real estate attorney is always a prudent step to protect your interests.