The purchaser of real estate through an option executed years earlier didn’t make the option unenforceable against the owner’s estate by not tendering the purchase price when exercising his option to buy the land, the Indiana Court of Appeals concluded today.

The issue arose in Estate of Jane H. Collins v. T. William McKinney, No. 02A05-1004-EU-286, in which T. William McKinney had an option from 1990 with Jane and Robert Collins to purchase real estate from them on which there was a car dealership. McKinney had to deliver written notice of his intent to exercise the option to the personal representative of the estate within 90 days of the death of the last to die of Robert and Jane.

Jane died last, and upon learning this, McKinney sought to exercise the option by sending a letter to Ray Collins, the personal representative of Jane’s estate. The option didn’t include the purchase price. Ray never responded to McKinney and later claimed after McKinney filed suit that the lack of offering the purchase price made the option unenforceable.

McKinney filed a verified petition for specific performance to require the estate to sell the property. The trial court granted him summary judgment, ordered the estate to close the sale, and later awarded damages and attorney’s fees to McKinney.

The estate correctly argued on appeal that no rule has been mentioned in Indiana directly on the question of whether an option is binding only upon tender of performance, wrote Judge L. Mark Bailey. But Indiana law doesn’t require a tender of performance before an optionor is in default and specific cases in Indiana undercut the estate’s reliance on cases from other jurisdictions.

The judges citied Wolvos v. Meyer, 668 N.E.2d 671 (Ind. 1996), to affirm that proper notice is all that was required to exercise the option and McKinney gave proper notice to Ray.

The Court of Appeals also affirmed that McKinney could be awarded damages even though the court awarded specific performance, but they remanded for a recalculation of the amount McKinney is entitled to. The court also vacated the amount of attorney’s fees awarded to McKinney and remanded for the trial court to determine the amount of fees related to McKinney’s efforts to close on the property.

The judges affirmed the trial court in all other respects.