Land Conveyances

Front 1

Conveyance of Real Estate Process?

Back 1

1. the land contract
2. the closing where the deed becomes the operative document

Front 2

What must be in the land contract?

Back 2

1. must be in writing - SOF
2. must be signed by D
3. must describe the land
4. must state consideration

Front 3

What if the contract says the land is bigger than it really is?

Back 3

Specific performance of contract with pro-rate reduction in purchase price.

Front 4

When will an oral contract for transfer of land be upheld?

Back 4

When 2 out of 3 occur:
1. Buyer takes possession of land
2. Buyer makes substantial improvements to the land.
3. Buyer makes payment or partial payment for the land.

Front 5

What if the real estate is destroyed through no fault of either party between the land contract and closing?

Back 5

Buyer bears burden from the time the land contract is signed.

Front 6

Implied promises in every land contract?

Back 6

1. Seller will provide marketable title. Meaning:
a) no part of the title rests on adverse possession
b) no encumbrances like a mortgage or servitude unless buyer waives (note: can pay off mortgage w/ proceeds of sale)
c) the property does not violate any zoning regulation.

2. Seller promises not to make any false statements of material fact.
a) seller must disclose all latent defects - must not make material lies or ommissions
b) even is seller sells "as is" in contract, must still disclose

Front 7

Caveat emptor

Back 7

Let the buyer beware - there is no promise of habitability with the sale of land. Exception: new home sold by builder-vendor comes with an implied warranty of fitness and workmanlike construction.

Front 8

What happens at the closing?

Back 8

Deed passes legal title from seller to buyer. It must be LAWFULLY EXECUTED AND DELIVERED
1. deed need not recite consideration
2. description of the land does not have to be perfect - just unambiguous and a good lead reqd.
3. Delivery requirement satisfied when grantor physically or manually transfers the deed to grantee - the mail, a messanger or an agent may be used. However delivery does not necessarily require actual physical transfer of the isntrument itself. DID THE GRANTOR HAVE THE PRESENT INTENT TO BE IMMEDIATELY BOUND IRRESPECTIVE OF WHETHER OR NOT THE DEED ITSELF WAS LITERALLY HANDED OVER.

Front 9

What if recipient expressly rejects the deed?

Back 9

This defeats delivery of title.

Front 10

Deed delivered with an oral condition?

Back 10

the oral condition is not provable and drops out.

Front 11

May deed be delivered by escrow?

Back 11

Yes
If seller dies or something, title will still pass if it was in escrow once the conditions (buyer pays) are met.

Front 12

Quitclaim Deed?

Back 12

No covenants - seller isn't even promising he has title to convey. (but, still implicitly promises in the land contract to provide marketable title at the closing - however, if a problem arises after closing, seller is off the hook)

Front 13

General Warranty Deed?

Back 13

Warrants against all defects in title including those attributable to grantor's predecessors. Usually has six covenents:

1. Present Covenants (if breached are breached at time of delivery)
a) covenant of seism - grantor promises he owns the estate he claims to convey
b) covenant of right to convey - grantor promises he has power to make transfer
c) covenant against encumbrances - no servitudes or liens on the land

2. Future covenants (is breached when grantee disturbed in possession)
a)covenant for quiet enjoyment - won't be disturbed by third parties lawful claim of title
b) covenant of warranty - grantor will defend grantee should a lawful claim of title be asserted by another
c) covenant for further assurance - grantor will do whatever necessary to perfect title if found imperfect in future

Front 14

Special Warranty Deed?

Back 14

1. grantor promises he hasn't sold the land to anyone else
2. the land is free from encumbrances made by grantor

Front 15

Bona fide purchaser for value: types of notice?

Back 15

Actual - actual knowledge of other purchaser's existence
Inquiry - whatever an examination of the land would show - buyer of real estate has a duty to inspect before transfer of title to see, for example, whether anyone else is in possession
Record - record notice; a previous deed was recorded

Front 16

Recording statutes:
Notice Statute v. Race Notice Statute

Back 16

Notice Statute says UNLESS

Front 17

Notice Statute v. Race Notice Statute who wins

Back 17

Notice Statute - last in time BFP if no record at the time of purchase

Race - first BFP to record

Front 18

Wild Deeds?

Back 18

Not capable of giving record notice - when the grantor was not in the chain of title.

Front 19

Estoppel by deed

Back 19

one who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if he later acquires that previously transferred interest.

Front 20

What is a mortgage?

Back 20

A debt
and
a voluntary lien on debtor's land to secure the debt.

Front 21

Equitable Mortgage

Back 21

Bank gives loan, debtor gives deed to the land. No formal loan document. Parol evidence admissible to show parties intent.

If bank sells the property to a bfp, then the property is sold. All original owner can do is sue for damages.

Front 22

What does a mortgagor have? mortgagee have?

Back 22

unless and until foreclosure, debtor-mortgagor has title and the right to possess

creditor-mortgagee has a lien

Front 23

Can a mortgage be transferred to another?

Back 23

the mortgage automatically follows a properly transferred note

Front 24

How can creditor-mortgagee transfer his interest?

Back 24

1. Endorsing the note and deliver to transferee
2. or executing a separate document of assignment

* if note is endorsed and delivered, transferee is a holder in due course and so takes the note free of any personal defenses (like lack of consideration or fraud in the inducement, etc)

Front 25

Real defenses that can be raised against holder in due course?

Back 25

MAD FIFI4

Material
Alteration
Duress

Fraud In Factum (debtor was lied to about what he signed - thought it was another type of instrument)
Incapacity
Illegality
Infancy
Insolvency

Front 26

Holder in due course?

Back 26

1. note must be negotiable made payable to the named mortgagee
2. original note must be signed by named mortgagee
3. original note must be delivered to the transferee
4. trasnferee must take the note in good faith without notice of any illegallity
5. transferee must pay value for the note (more than a nominal amt)

Front 27

Recording statutes and mortgages?

Back 27

Liens remain on the land so long as properly recorded.

Front 28

Buyer "assumes the mortgage" v. Buyer takes "subject to mortgage"?

Back 28

O remains secondarily liable when buyer assumes the mortage

But note, lien runs with the land so bank can always foreclose

Front 29

How to foreclose?

Back 29

mortgagee must foreclose by prior judicial action. at foreclosure the land is sold and proceeds go to satisfying the debt.

attorney's fees and foreclosure sale fees, etc. are paid off first, then the liens in order of priority, then any surplus to debtor.

Front 30

What if foreclosure sale doesn't make enough money to pay off lien?

Back 30

lien holder brings action for deficiency

Front 31

A senior
B second priority
C third priority

B forecloses his mortgage on property - effect on A and C?

Back 31

C is a necessary party, so is the debtor. C's lien ends w/ the foreclosure sale.

A, the senior interest, continues to run with the land. The new buyer takes subject to A's interest - isn't personally liable but A can foreclose on the land.

Front 32

Priorities of creditors?

Back 32

You have no priority until you record. First in time, first in right.

However, a Purchase Money Mortgagee has superpriority. (

Front 33

Subordination agreement?

Back 33

Are permissible - sr. creditor may agree to subordinate priority to a jr. creditor.

Front 34

Redemption in Equity

Back 34

At any time prior to the foreclosure sale, debtor can try to redeem the land.

Must pay off missed payment and interest and costs.

But if mortgage has an acceleration clause, bank can demand payment of full mortgage in event of foreclosure.

Front 35

May debtor waive the right to redeem the mortgage?

Back 35

No, clogging the equity of redemption is not permitted.

Front 36

Lateral support - if land is improved by buildings and an adjacent landowner's excavation causes that improved land to cave in, when will excavator be liable?

Back 36

only if shown to be negligent

Front 37

Lateral support - if land is improved by buildings and an adjacent landowner's excavation causes that improved land to cave in, when will excavator be subject to strict liability?

Back 37

if victim shows that because of defendant's actions, his improved land still would have collapsed, even in its natural state

Front 38

Riparian Doctrine?

Back 38

Water belongs to those who own land bordering the water course (reparians). Reparians share the righ tof reasonable use of the water. Will be liable if unreasonably interfere with other riparian's use.

Front 39

Prior Appropriation water doctrine?

Back 39

Water initially belongs to the state.
Right to divert can be acquired by an individual, regardless of whether he is riparian. Rights determined by priority of first beneficial use. (first in time)

Front 40

Groundwater / percolating water - not confined to a known channel

Back 40

surface owner is entitled to reasonable use of groundwater, but must not be wasteful.

Front 41

Surface water: common enemy rule

Back 41

surface water is a menace - rain, melting snow, etc that has not yet reached a natural watercourse or basin.
landowner may change in land to combat flow of surface water. but many courts have modified the common law doctrine to prohibit unneccessary harm to others.

Front 42

Possessors - how to deal with trespassors?

Back 42

bring an action for ejectment.

Front 43

Private nuisance and hypersensitive plaintiff/

Back 43

hypersensitive plaintiff won't win if nuisance is due to her hypersensitivity

Front 44

Private nuisance?

Back 44

substantial and unreasonable interference with another's reasonable use and enjoyment of land - not required to be tangible

Front 45

Remedies for regulatory takings?

Back 45

government must either:
1. provide just compensation or
2. terminate the regulation and pay owner for damages that occurred while it was in effect

Front 46

Variance?

Back 46

must show
1. undue hardship
2. variance won't decrease neighboring property values

Front 47

Exactions?

Back 47

are unconstituitonal unless reasonably related both in nature and scope to the impact of the proposed development