Real Property#5, Conveyancing, Mortgages

Front 1

Remedies appropriate for breach of land sale K

Back 1

1. Damages for K breach
2. Recission
3. Specific performance

Front 2

Usual measure of damages for breach of land sale K

Back 2

Buyers damages=market $ at closing minus K $
Sellers damages=K $ less market $ at closing--if difference zero or negative wronger party gets nominal damages + foreseeable reliance damages

Front 3

What is doctrine of merger in relation to conveyences

Back 3

Obligations in the land sale K must be repeated in the deed or they will be considered d/ced, I.e. once deed is delivered, the K is no longer relevant.

Front 4

Deed--essential formalities in execution of deed

Back 4

Signature of grantor
Intent to transfer (words like sell, give, assign)
ID of parties
description of the prop
(consideration if K by bargain + sale but does not require)

Front 5

Doctrine of Part Performance

Back 5

Oral real estate sale agreement may be enforced in equity if:
1. all or part of purchase $ paid AND EITHER
2. delivery of possession of the land or premises to the vendee OR
3. Construction of permanent + valuable improvements by vendee

Front 6

Delivery of Deed requires

Back 6

the grantor to intend to deliver the deed

Front 7

Delivery + power to recall

Back 7

No delivery if grantor retains the power to revoke

Front 8

Delivery + estoppel

Back 8

Grantor may be estopped to deny the fact of delivery if he prepares a proper deed and grantee acquires possession of the prop + creates rights in a BFP.

Front 9

conditional delivery

Back 9

happens when the grantor gives the grantee a deed that is unconditional on its fact but is accompanied by an oral condition. Maj rule is oral condition has no effect

Front 10

What if deed made out to non-eixtent grantee (like dead people or corp not yet formed)?

Back 10

Deed is void

Front 11

Common law dedication

Back 11

Means by which grantor is bound by promise to "dedicate" land to public use. Requires
1. manifestation of intent by land owner
2. public must show )thru govt) its intent to accept

Front 12

Escrow + delivery

Back 12

involves the deposit of a properly executed deed by the grantor w. a 3rd party who is to deliver deed upon the happening of named event

Front 13

Acceptance of deed

Back 13

required for conveyance by deed.

Front 14

Description of land

Back 14

must be sufficient to identify the prop involved. Parol evidence can be admitted to explain ambiguities. Rules of construction used if inconsistency or mistake.

Front 15

When deed contains incomplete description, what is order of priorities (rules of construction)/

Back 15

1. original survey monuments
2. natural monuments
3. artificial monuments
4. maps
5. courses
6. distances
7. name (Gilligan's Island)
8. quantity (2 acres of Old MacDonald's farm).

Front 16

3 changes which can occur in waterways of land described in deeds

Back 16

1. accretion
2. reliction
3. avulsion

Front 17

Accretion of water described in deed

Back 17

slow build-up of soil on shore
increases the amount of land the grantee gets, called alluvion

Front 18

Reliction of water described in deed

Back 18

land rises + water receded, increasing amt of land grantee gets

Front 19

Avulsion of water described in deed

Back 19

sudden, violent alteration in course of a waterway--does not change the land the grantee gets--boundary stays the same

Front 20

Equitable conversion

Back 20

Applies when there is an enforceable land sale K. Under equitable conversion, the purchaser is regarded as the equitable owner of the land and the vendor the legal owner w/ beneficial ownership of personal property ($ price). If prop destroyed before closing, buyer must pay the K $.

Front 21

Uniform Vendor & Purchaser Risk Act

Back 21

Growing MIN--risk of loss remains on the seller until closing unless buyer has actually taken possession or holds legal title to the property at time prop destroyed.

Front 22

Uniform Land Transactions Act

Back 22

risk of loss remains on the seller until the buyer either takes possession or holds legal title--no legislature has enacted yet

Front 23

Death of seller during escrow

Back 23

Beneficial interest descends as personal prop + heir gets only bare legal title which she must convey to the purchaser when the purchaser performs

Front 24

Death of buyer during escrow

Back 24

right to receive land goes to her heir, but the duty to pay the purchase $ is imposed upon the person who receives T's personal prop in will.

Front 25

Effect of casualty insurance when prop destroyed during escrow

Back 25

CL--if seller had ins + got $ the buyer still had to pay full purchase $
Modernly--most jurisdictions require seller to deduct amt of insurance from $ buys pays

Front 26

Marketable Title

Back 26

Seller has an affirmative obligation to deliver title which is free from reasonable doubt in fact and law.

Front 27

Common defects which render title unmarketable

Back 27

outstanding liens or mortgages
restrictive covenants
outstanding future interest
easement
variations in the names in chain of title
land subject to adverse possession claims
encroachments
existing violations of equitable servitudes or covenants
existing violations of zoning restrictions

Front 28

Defects that do not render title unmarketable

Back 28

zoning restrictions
other regs

Front 29

Marketable Title Acts

Back 29

state regulations re: title searches that make them quicker + more efficient by eliminating property interests that do not appear in chain or are too remote

Front 30

3 main types of deeds

Back 30

1. general warranty deed
2. special warranty deed
3. quitclaim deed

Front 31

General warranty deed

Back 31

Contains all six basic covenants of title. Holds grantor responsible for title defects arising both before + during tenure

Front 32

Specifal warranty deed

Back 32

Contains all six basic covenants of title but only holds grantor responsible for title defects arising during his ownership period.

Front 33

Quitclaim deed

Back 33

Conveys whatever estate the grantor has--including all title defects.

Front 34

At CL do all deeds contain an implied warranty of good title

Back 34

Np in absence of statute, warranties must be expressed in the deed

Front 35

Courts usually recognize boundary agreements though oral if:

Back 35

1. proof parties not aware or uncertain of true boundary line
2. there was an express or implied agreement as to location
3. possession conformed to agreement--actual taking (& relinquishment) of possession after the agreement

Front 36

Covenants in deeds respecting title

Back 36

1. Seisin (grantor owns the estate he is conveying)
2. right to convey
3. against encumbrances
4. Warranty of title
5. covenant for quiet enjoyment
6. Covenant for further assurances

Front 37

Which covenants are present and if breached are at the time of conveyance?

Back 37

Seisin, right to convey, against encumbrances

Front 38

Which covenants are continuous and may be enforced by remote parties in privity?

Back 38

warranty, quiet enjoyment, further assurances

Front 39

Will a seller of land remain liable for injuries caused by dangerous conditions on the prop which existed when the seller conveyed the land?

Back 39

Depends..
1. If seller knew about condition + failed to disclose it, he is liable until buyer has a reasonable amount of time to discover + repair the defect
2. If seller actively concealed it, he is liable until the buyer actually discovers the defect + has a reasonable amount of time to repair.

Front 40

Estoppel by deed

Back 40

1. grantor purports to convey an estate larger than one he has
2. grantor subsequently acquires the title he's already conveyed
3. Title automatically passes to the grantee by estoppel
4. has to be warranty deed

Front 41

Recording acts

Back 41

protect subsequent purchasers of land from earlier claimants of whom they are not aware. give public constructive notice of estates or interests disclosed in the recorded instrument.

Front 42

What is a bona fide purchaser?

Back 42

1. subsequent purchaser
2. who pays value
3. w/o notice of prior conveyance
4. + is in good faith

Front 43

Recording acts & adverse possession

Back 43

Recording acts do not protect subsequent purchasers against those with title gained by adverse possession

Front 44

Tract index

Back 44

shows all the recorded transactions related to piece of land--a few jurisdictions--eliminate many of problems inherent in grantor-grantee index

Front 45

Grantor-grantee index

Back 45

Most states--recorded transaction will appear in both the grantor + grantee index

Front 46

Collateral document rule in relation to recording acts

Back 46

gives a grantee constructive notice of the contents of deeds of adjacent pieces of land when all the pieces are derived from the same grantee

Front 47

Shelter rule in relation to recording acts

Back 47

Gives those who success to the interest of a bona fide purchaser the protection of recording acts, even if they themselves are not bona fide purchasers.

Front 48

Types of recording statutes

Back 48

Race
Notice
Race Notice

Front 49

Race statute

Back 49

first to record wins

Front 50

Notice statute

Back 50

An unrecorded conveyance is invalid as against a subsequent BFP w/o notice unless the same is recorded by law (look for words like "in good faith" + "w/o notice.")

Front 51

Race notice statute

Back 51

An unrecorded conveyance is invalid as against a subsequent bona fide purchaser for value w/o notice + who records 1st. (look for "in good faith" + "w/o notice" combined w/ "first duly recorded."

Front 52

Pure race notice + race notice only protect BFPs. Will nominal consideration support claim person is a BFP?

Back 52

No

Front 53

Mortgage

Back 53

interest in land created by writing providing security for performance of a duty or the payment of a debt.

Front 54

Mortgagor

Back 54

landowner or debtor

Front 55

Mortgagee

Back 55

creditor or bank

Front 56

Types of mortgage theories

Back 56

Lien theory
Title theory
Intermediate theory

Front 57

Lien theory of mortgages

Back 57

Maj-mortgage creates a lien on the land. Mortgagor remains owner + mortgagee has security interest

Front 58

Title theory of mortgages

Back 58

CL + about 20 states--mortgage operates as a conveyance of legal title to the mortgagee

Front 59

Intermediate theory of mortgages

Back 59

Very few states--title is in mortgagor until default, then it switches to mortgagee

Front 60

Conveyance of encumbered prop + ? of buyer's personal responsibility for debt

Back 60

"Subject to" not personally responsible
"Assumption of mortgage"--buyer is personally liable

Front 61

Equity of redemption

Back 61

refers to mortgagor's interest in land after default.

Front 62

Foreclosure

Back 62

method by which the mortgaged property or proceeds from the sale is applied to the satisfaction of the debt. Way the mortgagee ends the mortgagor's ownership interest int he real estate.

Front 63

Right of redemption

Back 63

Allows mortgagor in default to pay off mortgage and take the land free of it even thou he had previously defaulted.

Front 64

Under equitable redemption,

Back 64

mortgagor must redeem before foreclosure sale

Front 65

Under statutory redemption,

Back 65

mortgagor may nullify the foreclosure + redeem even after the foreclosure sale--usually 6 months - 1 yrs.--about 50 % of states follow.

Front 66

Clogging

Back 66

a mortgage may not contain a provision that the mortgagor waives the right to redeem This is called clogging + is invalid

Front 67

Priority of mortgages

Back 67

Typically 1 mortgagee has highest priority, followed by 2nd, etc. Order may by altered--e.g. senior mortgagee does not record or purchase $ mortgage

Front 68

Purchase $ mortgage

Back 68

Mortgage whereby the seller himself does the financing. The buyer pays the seller a down pamt & receives the deed and gives the seller a mortgage to cover the remainder of the purchase $.

Front 69

Junior interests + foreclosure actions

Back 69

A jr. interest can be an involuntary party. A jr. encumbrance must be made parties in order to have their claims eliminated.Where a Sr. mortgagee joins a Jr. mortgagee as a party, the Jr.'s right to foreclose is wiped out.

Front 70

Deficiency judgments

Back 70

After foreclosure sale, if not enough $ for the balance of the loan, then deficiency judgment. In most states, mortgagee may proceed directly against the mortgagor. some states limit to fair market value. Some forbid on purchase $ mortgages.

Front 71

Installment land sale Ks

Back 71

Title of prop does not transfer to buyer until series of payment have been made to seller who retains ownership interest

Front 72

Remedies for default on land sale K

Back 72

1. forfeiture--most severe
2. grace period
3. forfeiture & restitution
4. foreclosure
5. waiver of strict performance (i.e. acceptance of late payments in the past)