Real Property - Land Conveyancing

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Real Property - Land Conveyancing
2012-01-14 19:58:47
barbri VA

Real Property - Land Conveyancing
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  1. Generally
    • Two steps:
    • 1. The land contract, which endures until step 2
    • 2. The closing, where the deed becomes our operative document
  2. The Land Contract
    Statute of Frauds
    • standard:
    • writing
    • signed by party to be bound
    • describe Blackacre
    • state some consideration
    • When the amount of land recited in the land contract is more than the actual size of the parcel: remedy is specific performance w/ pro rata reduction in purchase price
    • Exception to Statute of Frauds: THE DOCTRINE OF PART PERFORMANCE; if 2 of the followin g e obtain, then the doctrine is satisfied and equity will decree specific performance of an oral contract for the sale of land:
    • 1. B takes possession;
    • 2. B pays all or part of price; and/or
    • 3. B makes substantial improvements
  3. The Land Contract
    Problem of Risk of Loss
    • Apply the doctrine of equitable conversion: equity regards done that which ought to be done
    • Once the contract is signed, B owns the land, subject to closing.
    • Important result: Destruction. If Blackacre is destroyed in interim of contract and closing, through no fault of either party, B bears the risk of loss unless the contract says otherwise
  4. The Land Contract
    Implied Promises in Every Land Contract
    • 1. Seller promises to provide marketable title at the closing, that is, title free from reasonable doubt. Free from lawsuits and threat of litigation.
    • Three circumstances will render title unmarketable:
    • a. Adverse possession - if even part of the title rests on adverse possession, it is unmarketable.
    • b. Encumbrances - servitudes and mortgages will render title unmarketable, unless buyer has waived them
    • *seller has the right to satisfy outstanding mortage or lien at the closing with the proceeds of the sale*
    • c. Zoning violations
  5. The Land Contract
    Seller Promises not to make any false statements of material fact
    • seller liable for failing to disclose latent material defects
    • seller liable for material lies and material omissions
    • general disclaimer of liability won't relieve seller for fraud or failure to disclose ("as is" "with all faults")
  6. The Land Contract
    Contains no implied warranties of fitness or habitability
    • common law norm is caveat emptor
    • Exception: implied warranty of fitness and workmanlike construction applies to the sale of a new home by a builder-vendor
  7. Closing
    • controlling document is the deed; th deed passes legal title fom Seller to Buyer
    • LEAD: to be pass legal title it must be Lawfully Executed and Delivered
  8. Closing
    Lawful Execution of a Deed
    • in writing, signed by grantor
    • deed need not recite consideration, nor must consideration pass to make a deed valid
    • includes description of the land (does not have to be perfect); needs to be unambiguous with a good lead ("some" is not a good lead)
  9. Closing
    Delivery Requirement
    • satisfied when grantor physically/manually transfers deed to grantee
    • can use mail, agent, or messenger
    • *does not necessarily require transfer of the instrument itself*
    • test is solely of present intent, that is, did grantor have a the present intent to be bound irrespective of whether or not the deed was handed over
    • Recipient's express rejection of the deed defeats delivery
    • If deed is absolute on face and transferred to grantee with an oral condition the oral condition drops out it is not provable and deliery is done
    • Delivery by escrow is fine
    • Escrow is good b/c can still pass to grantee if grantor becomes incapacitated
  10. Closing
    Types of Deed
    • 1. Quitclaim
    • 2. General Warranty
    • 3. Statutory Special Warranty
  11. Closing
    Types of Deed
    • Contains no covenants
    • doesn't even promise to have title to convey
    • worst deed
    • BUT, grantor did implicitly promise to provide marketable title at the closing in the aldn contract - any probelms post-closing = grantor off the hook
  12. Closing
    Types of Deed
    General Warranty
    • Best deed
    • warrants against all defects in title, including those due to grantor's predecessors
    • typically contains following six covenants; first three are present - time of delivery; SOL for breach of a present covenant begins to run from the instate of delivery
    • 1. covenant of seisin: grantor promises he owns this estate
    • 2. covenant of right to convey: grantor has the power to transfer - under no temporary restratints on alienation - no inferiority suffered by grantor (sound mind, requisite age)
    • 3. covenant against encumbrances: no servitudes or mortages on Blackacre
    • Next three covenants are future covenants - not breached until grantee is disturbed in possession. The SOL for breach of future covenant will not begin to run until the future date.
    • 4. covenant for quiet enjoymenet: grantee won't be disturbed in possession by a 3d party's lawful claim of title
    • 5. covenant of warranty: promises to defend grantee against lawful claims of title brought by others
    • 6. covenant for further assurances: grantor will do whatever is needed in the future to perfect the title
  13. Closing
    Types of Deed
    Statutory Special Warranty Deed
    • Deed most frequently used in VA
    • contains two promises that granto makes only on behalf of himself (grantor makes no representations on behalf of his predecessors in interest)
    • 1. grantor promises he hasn't conveyed Blackacre to anyone other than grantee
    • 2. Blackacre is free from encumbrances made by grantor