Home > Flashcards > Print Preview
The flashcards below were created by user
on FreezingBlue Flashcards. What would you like to do?
What are the TWO steps in the process of conveyancing real estate?
1. Land Contract
2. Closing (deed becomes our operative document)
What is the standard for the LAND CONTRACT in the context of the statute of frauds?
The land contract just be in WRITING, SIGNED by the party to be BOUND. It must also DESCRIBE Blackacre and state some CONSIDERATION.
Exception: DOCTRINE OF PART PERFORMANCE
What happens when the amount of land recited in the land contract is more than the actual size of the parcel?
Specific performance with a PRO RATA reduction in purchase price.
What is the DOCTRINE OF PART PERFORMANCE?
It is an exception to the statute of frauds, as applicable to an oral land contract.
If 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 the land:
1. B takes possession
2. B pays all or part of the price
3. B makes substantial improvements
Who bears the RISK OF LOSS after a land contract is signed?
MBE: Once the contract is signed, BUYER, unless the contract says otherwise.
NY: So long as the buyer is without fault, the risk of loss remains with the SELLER until buyer has title or takes possession.
What are the TWO implied promises in every land contract?
1. Seller promises to provide MARKETABLE TITLE at the closing.
2. Seller promises not to make any false statements of material fact.
What is MARKETABLE TITLE?
Title free from reasonable doubt, lawsuits, and the threat of litigation.
What will render a title UNMARKETABLE?
1. Adverse possession: if even part of the title rests on adverse possession, it is unmarketable.
2. Encumbrances: servitudes and mortgages render title unmarketable, UNLESS buyer has waived them.
*NOTE: seller has the right to satisfy an outstanding mortgage or lien at the closing, with the proceeds of the sale. So long as th eparties understand that the closing will result in the mortgage being satisfied or discharnged, buyer cannot claim title is unmarketable for that reason.
3. Zoning violations: unmarketable when land violates a zoning ordinance.
Is a seller required to warn buyer of defects? What if there is a general disclaimer of liability in the contract?
Majority Rule: Sellers are liable for failing to disclose LATENT MATERIAL defects. Thus seller is liable for material LIES and OMMISSIONS.
A general disclaimer of liability in the contract won't excuse seller from liability for FRAUD or FAILURE TO DISCLOSE.
Does the land contract contain an implied warranty of fitness? of habitability?
No. Common law norm is CAVEAT EMPTOR.
Exception: the IMPLIED WARRANTY OF FITNESS AND WORKMANLIKE CONSTRUCTION applies to the sale of a NEW HOME by a builder-vendor.
Upon closing, what is the controlling legal document?
What are the requirements in order for the deed to pass legal title from seller to buyer?
(lead: lawfully executed and delivered)
Lawful execution of a deed
What is the standard for the LAWFUL EXECUTION of a deed?
The deed must be in writing, signed by the grantor.
It must also describe the land, but it need not be perfect (law requires only an UNAMBIGUOUS description).
NOTE: The deed need NOT recite consideration, nor must consideration pass to make a deed valid.
What is the DELIVERY requirement in the closing?
It is a LEGAL standard: "Did the grantor have the PRESENT INTENT to be bound irrespevtive of whether the deed itself was literally handed over?"
Requirement may be satisfied when grantor physically or manually transfer the deedto the grantee.
It is permissible to use the mail, an agent, or a messenger.
However, delivery does NOT necessarily require ACTUAL PHYSICAL TRANSFER of the instrument itself.
What happens if the recipient expressly rejects the deed?
Delivery is defeated
What happens if a deed, absolute on its face, is transferred to grantee with an oral condition?
The oral condition drops out. It is NOT provable and the delivery IS DONE.
Is delivery by ESCROW permissible?
Grantor may deliver an executed deed to a third party, known as an escrow agent, with instructions that the deed be delivered to grantee once certain conditions are met. Once the conditions are met, title passes to the grantee.
What is an advantage of using the ESCROW form of delivery of the deed?
If grantor dies or becomes incompetent or is otherwise unavailable before the express conditions are met, title still passes from escrow agent to grantee once the conditions are met.
What are the THREE types of deeds?
1. Quitclaim deed
2. General warranty deed
3. Statutory special warranty deed
What covenants are promised in the QUITCLAIM DEED?
Grantor isn't even promising that he has title in the first place.
However, grantor is IMPLICITLY promising in the LAND CONTRACT that to provide marketable title AT CLOSING. If any problems occur POST-CLOSING, grantor is off the hook.
What guarantees are made in the GENERAL WARRANTY DEED?
Warranty against all defects in title, including those due to grantor's predecessors. There are SIX covenants genearlly contained in this deed:
1. Covenant of seisin: present covenant - grantor promises she OWNS the estate.
2. Covenant of right to convey: present covenant - grantor has the power to transfer (i.e., no temporary restraints on alienation or mental infirmity).
3. Covenant against encumbrances: present covenant - no servitudes or mortgages on Blackacre.
4. Covenant for quiet enjoyment: future covenant - grantee won't be disturbed in possession by a third party's lawful claim of title.
5. Covenant of warranty: future covenant - grantor will defend grantee, sould there be lawful claims of title brought by others.
6. Covenant for further assurances: future covenant - grantor will do what's needed in the future to perfect title.
What is the difference between a PRESENT COVENANT and a FUTURE COVENANT?
- Present Covenant
- Breach occurs at time of DELIVERY. Thus, statute of limitations begins to run from the instant of delivery.
- Future Covenant
- Breach occurs if Grantee is DISTURBED in possession. Statute of limitations does not run until that future date of breach.
What is a STATUTORY SPECIAL WARRANTY DEED called in NY?
It is a deed provided for by statute in many states.
NY: "Bargain and Sale Deed"
What promises are made in the STATUTORY SPECIAL WARRANTY DEED?
Grantor makes the following two promises ONLY on behalf of himself:
1. Grantor has not conveyed this estate to anyone other than grantee.
2. Blackacre is free from encumbrances made by Grantor.