LAND CONVEYANCING: THE PURCHASE AND SALE OF REAL ESTATE Flashcards Preview

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Flashcards in LAND CONVEYANCING: THE PURCHASE AND SALE OF REAL ESTATE Deck (51):
1

What is the two step process for every conveyance of real estate?

Step I: The land contract, which endures until step II.
Step II: The closing, where the deed becomes our operative document.

2

In a land contract what is the standard to satisfy the statute of frauds?

The land contract must be in writing, signed by the party to be bound.
To be bound: your defendant has to describe blackacre and state some consideration.

3

What do does a buyer do when the amount of land recited in the land contract is more than the actual size of the parcel?

Ask for specific performance with a pro-rata reduction in price.

4

B enters into a contract to purchase a farm. The con- tract recites that the farm is 100 acres. When B has a survey done, B learns that the farm is actually 98 acres. What is B’s remedy?

Specific performance. With a pro-rata reduction in price

5

What is the one exception to the statute of frauds in land conveyance?

THE DOCTRINE OF PART PERFORMANCE

6

What is the THE DOCTRINE OF PART PERFORMANCE?

If, on your facts, you have two of the following three, the doctrine is satisfied and equity will decree specific performance of an oral contract for the sale of land:
B takes possession
B pays all or part of the price
and/or
B makes substancial improvements.

7

When does liability for loss on land pass?

Liability passes when you sign the land sale contract, not when it closes.

8

Once a contract is signed who owns the land?

You apply the doctrine of equitable conversion.
Once the contract is signed the buyer owns the land, subject of course to the condition that he pay the purchase price at closing.

9

Who bears the risk of destruction in the interim between contract and closing when blackacre is destroyed through no fault of either party?

The buyer bears the risk of loss unless the contract states otherwise.

10

What are the two implied promises in every land contract?

1) seller promises to provide marketable title at closing.
2) Seller promises not to make any false statements of material fact.

11

What three circumstances will render title unmarketable?

1) Adverse possession.
2) Encumbrances:
3) Zoning violations

12

What if only a small part of the land rests on adverse possession, will the title be marketable?

No. If even part of the title rests on adverse possession it is unmarketable.

13

How can you fix title on a property that was adversely possessed?

By successfully getting a quiet title judgment.

14

What are some examples of encumbrances?

Servitudes and mortgages

15

How can title be marketable even with encumbrances?

If the buyer has waived them.

16

What right does the seller if there is an outstanding mortgage or lien at closing?

Seller has the right to satisfy an outstanding mortgage or lien at the closing, with the proceeds of the sale.

17

Can a buyer claim title is unmarketable because it is subject to a mortgage prior to closing if the seller says they will use the proceeds to satisfy the mortgage at closing?

No. A buyer cannot claim title is unmarketable because it is subject to a mortgage prior to closing, so long as the parties understand that the closing will result in the mortgage being satisfied or discharged.

18

Why do zoning violations make title unmarketable?

Title is unmarketable when blackacre violates a zoning ordinance. Makes it open to threat of litigation.

19

What do a majority of states now include in the seller's duty to not make any false statements of material fact?

The majority of states now also hold seller liable for failing to disclose latent material defects. Seller is liable for material lies and material omissions.

20

What if the contract contains a general disclaimer of liability (for example, “property sold as is” or “with all faults?"

The disclaimer won't relieve seller from liability for fraud.

21

What two warranties are absent from a land contract?

The land contract contains no implied warranties of fitness or habitability.

22

What warranties apply to a new home?

The implied warranty of fitness and workmanlike construction applies to the sale of a new home by a builder-vendor.

23

What is the controlling document after closing?

The Deed.

24

What does the deed do?

The deed passes legal title from the seller to the buyer.

25

Under what circumstance does the deed pass legal title from seller to buyer?

It must be “LEAD”: Lawfully Executed And Delivered.

26

What 3 things must must be in the deed for lawful execution?

The deed must be in writing, signed by the grantor.
and there must be a description of the land

27

What is noticeably absent from a deed?

The deed need not recite consideration nor must consideration pass to make the deed valid.

28

Does the description of the land need to be perfect? What are the requirements?

No it does not need to be perfect, however it must be unambiguous and provide a good lead.

29

The deed recites that O conveys “all of O’s land,” or “all of O’s land in Essex County.” Would such descriptions suffice in a deed?

Yes, they provide a good lead. We can research the meaning of all. Look at public records.

30

O conveys “some of my land in Sussex County.” Does such a description satisfy the description standard in a deed?

No, even with research we won't know the meaning of "some"

31

What is the standard of delivery for a deed?

The standard for delivery is a legal standard, and is a test solely of present intent to be bound.

32

What should you ask to determine if a deed has been delivered?

Did the grantor have the present intent to be bound irrespective of whether or not the deed was handed over.

33

Is it permissible to use the mail, an agent, or a messender to deliver a deed?

Yes

34

Can a deed be manually or physically delivered by the grantee?

Yes

35

What can the recipient do to defeat delivery?

The recipient can defeat the deed by express rejection of the deed.

36

As a surprise graduation gift, A’s Aunt Gertrude ex- ecutes a deed conveying Blackacre to A. A responds, “I can’t accept such a lavish gift.” Blackacre belongs to who?

Aunt Gertrude

37

What happens if a deed, absolute on its face, is transferred to grantee with an oral condition?

The oral condition drops out and delivery is done

38

O conveys a deed to Blackacre that is absolute on its face, but says to grantee, “Blackacre is yours only if you survive me.” This oral condition is __________?

Void. Delivery is done. It is because the oral condition is too susceptible to fraud.

39

How does delivery by escrow work?

The grantor may deliver an executed deed to a third party, known as an escrow agent, with instructions that the deedd be delivered to grantee once certain conditions are met. Once conditions are met title passes to grantee.

40

What is the advantage of escrow?

If grantor dies or becomes incompetent or is otherwise unavailable before the express conditions are met title still passes from escrow to grantee once those conditions are met

41

What is a quitclaim deed?

A quitclaim deed contains no covenants, Grantor isn't even promising he has title to convey.

42

What if the seller offers a quitclaim deed but the grantor did promise marketable title at the closing?

Any problems post closing, the buyer is off the hook.

43

What is the general warranty deed?

It warrants against all defects in tittle including those due to grantor's predecessors.

44

What six covenants are typically contained in a general warrant deed? When can they be breached?

The first 3 are present covenants so they can only be breached at the time of delivery.
Snow Can Encumber Queen With Ax
1) The covenant of seisin
2) The covenant of right to convey
3) The covenant against encumbrances
The last 3 are future covenants which are not breached unless the grantee is disturbed in possession. (statute of limitations does not run until that future date)
4. The covenant for quiet enjoyment
5. The covenant of warranty
6. The covenant for further assurances

45

What is the covenant of seisin? When can it be breached?

Grantor promises that he owns the estate.
Can only be breached at the time of delivery because it is a present covenant.

46

What is the covenant of right to convey? When can it be breached?

Grantor has the power to transfer. Grantor is of no disabilities, sound mind of age. No temporary restraints on alienation.
Can only be breached at the time of delivery because it is a present covenant.

47

What is the covenant against encumbrances? When can it be breached?

Grantor promises there are no servitudes or liens on blackacre.

48

What is the covenant for quiet enjoyment? When can it be breached?
When does the statute of limitations begin to run?

Grantor promises grantee wont be disturbed in possession by a third party's lawful claim of title.
It is not breached unless the grantee is disturbed in possession.
The statute of limitations does not run until that future date

49

What is the covenant of warranty?
When can it be breached?
When does the statute of limitations begin to run?

Grantor promises he will defend grantee against any lawful claims of title brought by others.
It is not breached unless the grantee is disturbed in possession.
The statute of limitations does not run until that future date.

50

What is the covenant for further assurances?
When can it be breached?
When does the statute of limitations begin to run?

Grantor promises he will do whatever is needed in the future to perfect the title if it turns out to be flawed.
It is not breached unless the grantee is disturbed in possession.
The statute of limitations does not run until that future date.

51

What is the statutory special warranty deed?

Provided for by statute in many states, this deed contains two promises that grantor makes only on behalf of himself. (Note: Grantor makes no representations on behalf of his predecessors in interest.)
1. Grantor promises he has not conveyed blackacre to anyone other than grantee.
2. That blackacre is free from encumbrances made by grantor.