Stopbails

Stopbails, also known as stopbails or stopbail, are a type of bailment agreement used in the United States, particularly in the context of real estate transactions. This type of agreement allows a seller to retain possession of a property until the buyer has paid the purchase price in full. The seller typically agrees to hold the property for a specified period, usually until the closing date, and may also agree to hold the property for a longer period if the buyer fails to pay.

Stopbails are often used in real estate transactions to provide the seller with additional security and to ensure that the buyer has the financial means to complete the purchase. The agreement typically includes provisions for the seller to inspect the property and to ensure that the buyer has provided all necessary documentation, such as a loan commitment or a letter of credit.

Stopbails can be a useful tool for sellers, but they also come with certain risks. For example, the seller may be held liable for any damage to the property that occurs during the stopbail period. Additionally, if the buyer defaults on the loan or fails to pay the purchase price, the seller may be responsible for finding a new buyer or for selling the property at a loss.

In recent years, the use of stopbails has declined in popularity due to changes in real estate laws and regulations. In some states, for example, stopbails are no longer allowed, and sellers are required to provide a full release of the property to the buyer before the closing date. Despite these changes, stopbails remain a common practice in many real estate transactions, particularly in areas where they are still legal and where they are seen as a useful tool for providing additional security to the seller.