Real Estate K And Convey

Front 1

Three ways around the statute of frauds

Back 1

Part performance, equitable estoppel, fraud

Front 2

Determination of Part Performance

Back 2

Varies by jurisdiction: one test, three factors
1.Pay part of the purchase price 2.Possession
3. Some fact that is unequivocally referable to the oral contract

Front 3

Determination of Equitable Estoppel

Back 3

You need:
1. Reasonable reliance
2. A detrimental change in position
3. Proof of the oral promise

Front 4

What constitutes a legally valid R.E. Contract? Why important?

Back 4

Important for the SOF. Writing must include:
i. Legally sufficient description of the property
ii. Terms and conditions of payment
iii. Terms sufficient to indicate transfer of property
iv. Signature of the party to be charged
v. The identification of the parties

Front 5

When can a written K be orally changed despite the SOF? What factors must exist?

Back 5

A written K can be rescinded orally; not modified. To rescind orally, need mutual agreement and an executory (incomplete) contract.

Front 6

Five most important changes to Standard Real Estate Contract

Back 6

1.Have title company hold money (instead of buyer)
2. Give buyer 10 days / sole discretion to inspect and reject
3. Deed of conveyance - NOT subject to exceptions permitted herein
4. Have all exceptions of title subject to buyer's approval
5. Need specific performance

Front 7

What is the time for completion of the contract?

Back 7

Time is of the essence - any delay is material. Otherwise, have a reasonable time for completion.

Front 8

Can time is of the essence by implied? If so, when?

Back 8

Yes, if evidenced by the conduct of the parties and the circumstances of the transaction

Front 9

Can time is of the essence by waived? If so, when? Is the waiver permanent?

Back 9

Yes, if waiver is implied by the conduct of the parties. The waiver is not permanent.

Front 10

What are lien states and mortgage states? How many states are each?

Back 10

1. Lien states – mortgages are defined as a lien placed on land for the security for the payment of a debt
2. Title states – mortgages are defined as a conveyance of land given as security for the payment of a debt
Slightly more lien states

Front 11

What is the equity of redemption?

Back 11

Right of borrower to pay off debt after default.

Front 12

What are the two types of foreclosures and differences between them?

Back 12

Judicial foreclosure - longer but gives deficiency judgment
Power of sale - shorter but no deficiency

Front 13

What are statutory redemption periods?

Back 13

Measure enacted in mostly rural states to allow another redemption period after foreclosure sale.

Front 14

What are the three types of deeds in America?

Back 14

i. General Warranty Deed – Seller warrants marketable title back as far as required by statute
ii. Special Warranty Deed – Seller warrants that they have not encumbered title while they have owned it
iii. Quitclaim Deed – No warrants – just transfer whatever title the transferor does have

Front 15

Definition of marketable title

Back 15

a title that is free from reasonable doubt of litigation

Front 16

What to do for curable title defects?

Back 16

1. Need to give notice and specify defects
2. Then give reasonable time for cure

Front 17

How is the original lease affected by assignment or sublease?

Back 17

1. In assignment – all rights of the parties pass. Therefore, if original contract had a fire insurance provision, but assignor-assignee contract did not, that provision is gone
2. In Sublease – the original contract still exists. Therefore, in above example the fire insurance clause would still apply

Front 18

When is specific performance authorized?

Back 18

In most jurisdictions, pretty much all real property cases.

Front 19

What is the measure of damages for seller's breach?

Back 19

i. The English rule (slight majority in America) – the buyer is only entitled to the benefit of the bargain is there is bad faith; otherwise, just costs and amounts paid
ii. American Rule – if the seller breaches, the buyer is entitled to the benefit of the bargain

Front 20

What happens to downpayment if buyer breaches?

Back 20

i. Majority rule – seller keeps the entire downpayment, even if the contract does not refer to it as liquidated damages, especially where the down payment does not exceed 10% of the K price
ii. Emerging rule – Buyer recovers downpayment in excess of seller’s downpayment

Front 21

Definition of Marketable Title

Back 21

A Title that is free from reasonable doubt of litigation

Front 22

Three Kinds of Deeds in America

Back 22

General Warranty Deed
Special Warranty Deed
Quitclaim Deed

Front 23

Elements of the Modern Deed

Back 23

1. Must be in writing
2. Must identify the parties
3. Must provide a legal description of the land
4. Must include words indicating an intent to convey
5. The grantor's signature
6. States require acknowledgement before either the deed is valid or recording valid

Front 24

How are Deeds construed - the old method?

Back 24

First, look at the granting clause
Second, look at the surrounding language
Third, look at the extrinsic evidence
Fourth, look at the canons of construction

Front 25

How are deed construed - new method?

Back 25

Courts just look at the deed for intent

Front 26

What is required to execute a deed?

Back 26

1. Signing by the grantor
2. Witness
3. Delivery is required

Front 27

What kind of deliveries out of escrow can be made?

Back 27

Deed and money escrow - once funds clear, deed delivered
Money lenders escrow - money sits, once mortgage valid, deed released

Front 28

When is the deed effective when delivered in escrow?

Back 28

On the second delivery, from the escrow agent to the buyer

Front 29

What is the relation back doctrine?

Back 29

If the seller dies while deed is in escrow, and buyer is ready and willing to perform, first transfer is considered to make the deed valid

Front 30

Resolving inconsistencies in property boundaries in the deed:

Back 30

1. Natural monuments
2. Artificial monuments and marked survey lines
3. Adjacent tracts or boundaries
4. Courses of directions
5. Distances
6. Area or quality

Front 31

Three kinds of recording acts in the united states

Back 31

Pure race, notice, race notice

Front 32

When is the buyer a bona fide purchaser?

Back 32

Buyer has no notice
Buyer pays consideration

Front 33

What are the six covenants related to title?

Back 33

1. Covenant of Seisen: right to possession
2. Covenant of the right to convey
3. Covenant against encumberances
4. Covenant for further assistance
5. Covenant of quiet enjoyment
6.Covenant of warranty

Front 34

What are the present covenants?

Back 34

1. Covenant of Seisen: right to possession
2. Covenant of the right to convey
3. Covenant against encumberances

Front 35

What are the future covenants?

Back 35

4. Covenant for further assistance
5. Covenant of quiet enjoyment
6.Covenant of warranty

Front 36

Insurance provisions in the standard K - what is wrong and what should they be?

Back 36

i. Bad - In case of injury, the seller has the option to restore. If the seller fails to restore the buyer may terminate K or accept deed without abatement but with insurance
1. Don’t want the seller renovating, and don’t want to deal w/ seller’s insurance company
ii. Better or Best – If the injury is less than 10% of purchase price, buyer completes with abatement. If injury is greater, buyer may complete with abatement or terminate

Front 37

What is the theme of Prof's comment on the K?

Back 37

The buyer has a right to decline if inspection, encumberance, etc is not satisfactory

Front 38

What is the distinction between void and voidable?

Back 38

Void - no K, no rights under it

Voidable - one party retains right to enforce K, but may decline it

Front 39

SOF questions:
Does the SOF include service and listing K's?
When must the SOF be pled?
Can multiple docs make up the SOF?

Back 39

Yes, upfront and yes

Front 40

SOF questions
If you admit K, can you still plead SOF?
Do you need mutuality when K is signed?
If all the elements are present, can the K still not be enforced? When?

Back 40

No, no, yes - if the writing was only a memo and a full K was planned in the future.

Front 41

Can a seller gain specific performance based on oral land contract?

Back 41

Jurisdictional split - some say yes, some no

Front 42

What was prof's best clause for dealing with the property damage during the gap period?

Back 42

If the injury is less than 10% of purchase price, buyer completes with abatement. If injury is greater, buyer may complete with abatement or terminate

Front 43

What is the difference between the mortgage and the promissory note?

Back 43

The mortgage is the conveyance of title (or a lien on title) in security of a debt. The promissory note details the actual money owed on to the bank,

Front 44

What is a trust deed? Why use?

Back 44

Type of "mortgage" where borrower gives title to land to 3rd party for security on a loan. Some states allow power of sale for trust deeds.

Front 45

What happens in an installment K when the title is questioned before final payment?

Back 45

Old rule - no matter, unless worried the seller was going bankrupt. New rule - follow the UCC and demand assurance.

Front 46

What are the ways courts determine if a doc is an assignment or sublease?

Back 46

Old way - if all interest conveyed, assignment, if less, sublease. Mass. rule - if ANY interest left over, ex. right of reversion, sublease. New rule - look to intent of the parties.

Front 47

What is the liability of a buyer in an assignment or sublease?

Back 47

Buyer is liable as guarantor in an assignment and sublease, but not liable if there has been an assumption, instead of just an assignment.

Front 48

Must landlords consent to assignments? Notify of foreclosures? What is the policy courts like here?

Back 48

Most courts state in residential must reasonably consent, but commercial is open term. Must notify of foreclosures. The law disfavors restraints on alienation.

Front 49

What are the five remedies we covered?

Back 49

Specific performance
Damages
Equitable Estoppel
Foreclosure
Quiet Title

Front 50

What is the disadvantage of including remedies in K?

Back 50

May limit your remedies to those listed in court. Note also to plead appropriate remedies

Front 51

When does equitable conversion start to apply? What role do the material terms play in equitable conversion?

Back 51

Equitable conversion starts once the contract is signed. The materials terms do not affect equitable conversion, except in Ohio.

Front 52

Generally, how do parties deal with risk of loss problems? What statute applies? What is prof's suggestion?

Back 52

lawyers contract around it. The Uniform Vendor and Purchaser Risk Act. Prof wants parties to agree, often on split and insurance increase.

Front 53

What remedies can be sought under equitable conversion?

Back 53

Seller will seek specific performance, which courts may not grant if seller learned of buyer's thwarting. Seller can seek damages, but mutual mistake or frustration of purpose can be raised as defense.

Front 54

What is the Habendum clause?

Back 54

Part that states grantee is to have and hold for what reasons, extent, purpose, etc

Front 55

What are the three survey methods?

Back 55

Metes and bounds system, government surveys, the plat system.

Front 56

Is the implied warranty of habitability applied to: new houses, commercial property, old houses?

Back 56

Yes to new houses, no to commercial property, increasingly to old houses

Front 57

What is the doctrine of merger? Can it be waived?

Back 57

At the closing, the contract is merged into the deed and only the deed survives. Can be waived for a specific provision or the whole document.

Front 58

Distinction between an abstract and title insurance? Does liability attach to the creator?

Back 58

An abstract is prepared by a lawyer and includes a list of all docs that affect title. A title insurance policy just lists relevant docs, but vouches for title. Both are liable if false.

Front 59

What are the five steps of title insurance?

Back 59

1. Search
2. Exam
3. Issuance of commitment
4. Final policy
5. Recording the documents

Front 60

What does title insurance not cover?

Back 60

Title insurance does not cover survey matters.

Front 61

How are judgment creditors affected by a new purchaser?

Back 61

Can be screwed; judgment creditor not bona fide purchaser, so if recorded after CLOSING, judgment is lost

Front 62

Do mortgage liens transfer to new owners?

Back 62

Yes - mortgage liens run with the land

Front 63

Are easements subject to statute of limitations?

Back 63

Yes, typically like 40 years, BUT not if they are being used.

Front 64

What is apparently unique about the covenant of quiet enjoyment?

Back 64

Also applies to landlords

Front 65

How may title insurance policies by construed against the insurer?

Back 65

Coverage clauses interpreted broadly and exclusion clauses interpreted narrowly.

Front 66

When can the present covenants be breached?

Back 66

Present covenants - if not breached at time deed is transferred - no issue. However, statute of limitations, typically ten years, applies to breaches present at time of transfer.

Front 67

When can the future covenants be breached?

Back 67

Breach can occur way later; still ten years after the breach before the statute of limitations expires.

Front 68

Can a court force a person to clear title?

Back 68

No

Front 69

What is the standard for when someone must accept assurances?

Back 69

When those assurances are "reasonable"