Flashcards in Land Sale K's and Conveyances Deck (74)
How does the SOF apply to land sale Ks?
it must be in writing, contain the signature of the party to be charged, and the essential terms (parties, descrip. of land, price)
Can part performance take a contract out of the SOF?
Yes, such as possession, substantial improvements, payment of purchase price.
What is the doctrine of equitable conversion?
When a K is signed, equity regards the buyers as the owner of the real property. The seller's interest (right to proceeds of the sale) is considered personal property. Legal title held in trust for buyer; right to possession follows bare legal title. But seller is entitled to possession until closing.
What happens if property is destroyed before closing?
without fault of either party, majority rule places risk on the buyer. (still, seller needs to credit insurance proceeds against purchase price)
Under doc. of equit. conv., what happens if a party dies before K is completed?
seller's interest passes as personal property and buyer's interest passes as real property (if seller dies = legal title passes to heirs, but they must give up title at closing; if buyer dies = heirs can demand conveyance at closing)
What is the implied covenant in every land sale K?
Implied covenant that seller will provide marketable title (reasonably free from doubt or lawsuits) at closing
What can make a title unmarketable?
Defect in chain of title (variation in land description in deeds, defectively executed deed, prior grantor lacked capacity to convey)
Encumbrances: mortgages, liens, restrictive cov., easements, options to purchase (but all this must be present, not resolved, by closing)
Is title acquired by adverse possession unmarketable?
When the holder of a FI is unborn/unascertained, is it possible to convey marketable title?
Do zoning restrictions affect marketability?
No, but an existing violation of a zoning ordinance does
Under an installment land K, when must title be marketable?
When the buyer makes his last payment
Is a seller liable on implied contractual cov. of marketability after closing?
No - seller is only liable for express promises made in deed
What are the bases for suit by Buyer after title passes?
Through express covenant, including: seisin, right to convey, encumbrances, quiet enjoyment, warranty, further assurances
What must a buyer do if title is unmarketable?
Give seller notice and reasonable time to cure defects; if seller fails to cure, buyer can: rescind, sue for damages, specific performance w/ abatement, and a quiet title suit.
Does a quitclaim deed affect the implied covenant of marketable title?
What are the remedies for breach of sale K?
damages (difference between K price and FMV on date of breach, plus incidentals), or because land is unique, specific performance
What if a buyer wishes to proceed despite unmarketable title?
She can usually get specific performance w/ abatement of purchase price
Can a seller retain the buyer's earnest money upon breach?
Yes, usually construed as liquidated damages
What are the seller's liabilities for defective property?
Warranty of fitness/quality (new construction only); negligence of builder; misrepresentation (fraud); active concealment, failure to disclose defects
What is the warranty of fitness in a K of sale and deed of real property?
no implied warranty of quality, but cts. recognize warranty of fitness in sale of NEW house by the builder
What if a builder is negligent in performing building K?
buyer can sue
Can the seller be liable for defects in existing building, such as leaky roof, floor basement, termites, etc?
Yes, under misrep (know or negligently made false statement of fact to buyer and buyer relied on statement, that materially affects value); under active concealment (didn't make statements, but took steps to conceal defects - wallpaper over water damage); under failure to disclose when knew or reason to know, defect is not apparent and buyer unlikely to discover through ord. inspection, and defect is serious
Can a seller avoid liability for defects through a general disclaimer in the sale K? (sold as is with all defects)
No, if liable for fraud, concealment, or failure to disclose. But if seller expressly disclaims liable for specific defects, will be upheld.
What is a deed?
transfers title to an interest in real property
What are the requirements of a deed?
in writing, signed by grantor, reasonably identifies land and parties
Can a deed convey property by inter vivos gift?
Yes, if: 1. donative intent; 2. delivery; and 3. acceptance
What happens when a deed is void?
set aside by court even if the property has passed to a BFP (these are forged, never delivered, issued to a nonexistent grantee, obtained by fraud in factum - grantor deceived and did not realize that she was executing a deed)
What happens when a deed is voidable?
will be set aside only if the property has not passed to a BFP (executed by minors, incapacitated persons, fraud in inducement, duress, undue influence, mistake, breach of FD)
What is a fraudulent conveyance?
even if the deed complies with formalities, can be set aside by grantor's creditors if made with 1. actual intent to hinder, delay, defraud creditor of grantor; 2. without receiving a reasonably equivalent value in exchange for transfer (and debtor was insolvent). But will not be set aside against grantee who took in good faith and paid reasonably equivalent value.