OFFICIAL OPINION No. 15

OFFICIAL OPINION No. 15 Agreement of Sale or r eal estat e-Effect of agreement on ownership-Federal Disaster Relief Act 1. An executed agreement of sale passJ:> 0qnilable ownership to the buyer of real estate before settlement occurs. 2. The equitable owner bears all loss or benefit that may occur with reg:i,rd to the prnperty from the time the agr<?ement of sale is executed. Dr. Richard Gersten Director of Civil Defense Harrisburg, Pennsylvania Dear Dr. Gersten: Harrisburg, Pa. February 26, 1973 You have requested an opinion concerning ownership and risk of loss responsibility with regard to the public water supply sys- tem serving the borough of Blossburg, Tioga County, Pennsyl- vania. In your letter of February 6, 1973, you have indicated that this opinion is at the request of Assistant Regional Direc- tor of the Federal Office of Emergency Preparedness, in connec- tion with the Federal reimbursement for the cost of repairing the Blossburg waterworks which were damaged by the floods of June 23, 1972. Under the Federal Disaster Relief Act, P.L. 91-606, 42 U.S.C.A. §4482, funds are available to reimburse municipal- ities for the repair of publicly-owned facilities of this nature. 34 OPINIONS OF THE ATTORNEY GENERAL According to your letter, the facts of the situation are as fol- lows. Prior to June 5, 1972, the water system was owned ~nd operated by the Blossburg Water Company, a private corporat10n. On June 5 the Blossburg Water Company and the Blossburg Municipal Authority, a municipal authority organized and ex- isting under the Act of May 2, 1945, P.L. 382, 53 P.S.§§~01, et seq., executed a formal, written agreement of sale by which the company's waterworks facilities were to be sold to the Author- ity. From the records of the Tioga County Recorder of Deeds, it appears that a formal settlement took place on July 18, 1972. On August 18, 1972, the Borough of Blossburg submitted to the Fed- eral Office of Emergency Preparedness a request for Federal re- imbursement in the amount of $42,559.45, for the cost of repair- ing the damaged waterworks facilities. The question you have presented, then, is whether the water supply facilities of the Borough of Blossburg were publicly-owned at the time of the June flood. It is our opinion that they were. The pertinent principles of law are clear. In Hess v. Vinton CoEiery Co., 255 P a. 78 ( 1916) the law of Pennsylvania regard- ing this subject was precisely stated. There a question was raised as to the effect of an agreement of sale on the rights and interests of the parties to the agreement. Quoting Richter v. Se- lin, 8 S & R 425, the court stated at p. 83: "When a contract is made for sale of land, equity con- siders the vendee as the purchaser of the estate sold, and the purchaser as a trustee for the vendor for the purchase-money. So much is the vendee considered, in contemplation of equity, as actually seized of the estate, that he must bear any loss which may happen to the estate between the agreement and the conveyance, and he will be entitled to any benefit which may accrue to it in the interval, because by the contract he is the own- er of the premises to every intent and purpose in equ- ity." See also Spratt v. Greenfield, et al., 279 Pa. 437 ( 1929), where the court stated "that the purchaser must bear any loss occasion- ed to the property occurring after execution of the contract and before delivery of the deed, because . . .. [he] becomes the own- er of the land." More recently, the Pennsylvania Supreme Court again restated the rule. "After a contract for the sale of real estate is duly ex- ecuted, the purchaser is the equitable owner thereof entitled to all advantages that may thereafter arise' and responsible for all loss that may befall it." Syne; Appeal, 401 Pa. 387 (1960). For the reasons stated, therefore, it is our opinion that the water supply systems of the Borough of Blossburg were, in fact, OPINIONS OF THE ATTORNEY GENERAL 35 publicly-owned at the time of the flood of June, 1972. Conse- quently the Borough of Blossburg is entitled to Federal reim- bursement for the cost of repair of the waterworks facilities in question. Very truly yours, THEODORE A. ADLER Deputy Attorney General ISRAEL p ACKEL Attorney General