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84 Cards in this Set
- Front
- Back
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What is the exclusive right to sell in the relationship between the broker and the prospective seller?
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It requires the seller to pay the listing broker a commission if a purchaser is found BY ANYONE, even the seller.
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What is the exclusive agency listing in the relationship between the broker and the prospective seller?
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It requires the seller to pay the listing broker a commission if anyone EXCEPT the seller produces a purchaser.
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What is an open listing in the relationship between the broker and the prospective seller?
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It obligates the seller to pay a commission ONLY if the broker produces a purchaser.
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What is a "multiple listing service?"
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Member brokers of the MLS obtain exclusive right to sell listings and submit them to the service. The listing broker thereby agrees to split the commission with the MLS member broker who produces the purchaser.
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Is a broker entitled to commission when he finds a buyer, but the sale subsequently falls through?
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SPLIT!
General rule: Yes. If the broker produces a ready buyer the commission is earned whether or not the sale goes through. Minority Rule: The broker is to be payed commission out of the sale proceeds, so the broker is not entitled to commission unless the sale goes through. (Trisram's Landing, Inc. v. Wait) |
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Can a real estate salesperson complete an earnest money agreement form containing a contingency clause, or is this an unauthorized practice of law?
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Yes, he can. It is in the public interest to permit licensed real estate brokers to complete lawyer prepared form agreements as long as they comply with the standard of care demanded of an attorney. This is part of the every day business of the brokers. When a broker does this, he is potentially liable for negligence.
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What is an installment land contract?
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It allows the purchaser to take possession of the land immediately and to pay the purchase price in installments over several years. The seller holds legal title to the property as security until the purchaser pays all installments.
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Under the English Statute of Frauds, an action cannot be brought upon any contract or sale of lands unless...?
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The agreement upon which such action shall be brought is in writing an designed by the party to be charged.
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What must be in writing in order for a court to decree specific performance of a contract for a sale of land?
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Essential elements of the terms of the contract: identification of the land. The terms of the contract must be such that neither party can reasonably misunderstand them. DOES NOT MATTER WHAT FORM IT IS IN AS LONG AS ESSENTIAL ELEMENTS ARE INCLUDED. (Cash v. Maddox)
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What is the doctrine of part performance?
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An oral contract for the sale of real estate may be specifically enforced if acts of part performance can only be explained by the existence of an oral contract.
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Does the existence of a improperly recorded memorandum of lease represent an impediment on marketability of title?
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No. A lease that is not binding on the purchase would not render a title unmarketable. An objection to a title must have some substantive merit. (G/GM Real Estate Corp. v. Susse Chalet Motor Lodge of Ohio, Inc.)
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What if a joint tenant contracts to sell property without the consent of his other joint tenant?
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Specific performance is impossible because it is necessary for the other tenant to consent, but the contracting tenant is liable for damages for breach of contract. (Warner v. Denis)
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In order to get specific performance, does a purchaser have to show uniqueness of the property?
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No. It is presumed that property is unique and the sale of real property is specifically enforceable by the purchaser. No special proof of uniqueness is needed. (Pruitt v. Graziano)
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What is the doctrine of equitable conversion?
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Equity regards as done that which ought to be done. Upon the execution of a contract, the purchaser is the equitable owner and the seller is the trustee of bare legal title for the purchaser and the owner of the purchase money
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Can parties to a contract for the sale of real estate alter the doctrine of equitable conversion by allocating risk within the contract?
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Yes.
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If a contract allocates the risk of loss on the vendor, and insubstantial damages to the property occurs without the fault of either party, what can the purchaser do?
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Recover his down payment or have the vendor repair the damage or have the vendor give an abatement in the purchase price.(Bryant v. Willison Real Estate Co.)
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What is the appropriate remedy if the risk of loss is allocated to the vendor and substantial damages to the property occurs?
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The contract should be terminated and the down payment returned to the purchaser. (Bryant v. Willison Real Estate Co.)
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What is the title theory in mortgages?
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Legal "title" is in the mortgagee until the mortgage has either been satisfied or foreclosed.
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What is the lien theory in mortgages?
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The mortgagee holds no "title", but has security only. The mortgagor has the right to possession until there has been a valid foreclosure.
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What is the intermediate theory in mortgages?
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The mortgagor has the right to possession at least until default, and the mortgagee has the right to possession after default.
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Why is the right to possession important in mortgages?
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It carries with it the right to collect rents and profits. BUT, the mortgagee must account for any such rents and profits on the mortgage debt.
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If bank financing for a purchase of real estate is granted and then revoked and the purchase was conditioned on bank financing, can the buyers get their deposit back?
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If the financing is first satisfied and then fails because of some action voluntarily taken by the buyer, the risk of the failure is property imposed upon the buyer at fault and not the innocent seller. (Bruyere v. Jade Realty Corp.)
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If a contract conditioned on buyer obtaining a loan to finance the purchase fails to specify at what rate the buyer is to obtain a mortgage loan is the contract still enforceable?
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No. It is too vague and indefinite. (Homler v. Malas)
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What is required of the buyer in a contract subject to loan financing?
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A good faith effort to obtain a loan.
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Does a mortgager have a right to prepay his mortgage?
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He must adhere to the payment schedule specified in the mortgage note unless the right to prepay exists through a clause or a statute.
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Can a purchaser be relieved of a forfeiture provision in an installment land contract?
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Yes. The purchaser has a right of redemption when equity so demands.(Lewis v. Premium Investment Corp.)
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What is the grantor-grantee index system?
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Separate indices are maintained for grantors and grantees. In the grantor index, the instruments are listening alphabetically under the grantor's name. The grantee's index contains identical information, except all instruments are listed alphabetically under the grantee's surname.
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What is the tract index system?
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Land transactions are indexed by reference to the particular parcel involved.
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What is race recording?
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The first purchaser to record prevails, and notice is irrelevant.
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What is notice recording?
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Only a subsequent purchaser who takes without notice of prior unrecorded instruments is protected. A subsequent purchaser need not record to prevail over a prior claimant, but should to insure against further subsequent purchasers.
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What is race-notice recording?
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In order to prevail, a subsequent purchaser must be without notice of a prior instrument AND must record first.
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O conveyed to A who failed to record. O conveyed to B who knew of the conveyance to A. B recorded. Who wins under each type of recording?
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Race: B
Notice: A Race-notice: A |
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O conveyed to A who failed to record. O conveyed to B who knew nothing of the conveyance to A. B failed to record. A recorded. Who wins under each type of recording?
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Race: A
Notice: B Race-notice: A |
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O conveyed to A who failed to record. O conveyed to B who knew nothing of the conveyance to A. B recorded anyway. A then recorded. Who prevails in notice and race-notice?
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Notice: B
Race-notice: B NOTICE IS MEASURED AT THE TIME OF THE CONVEYANCE! |
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What is needed in order to qualify as a bona fide purchaser?
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The purchaser must give valuable consideration and take without notice.
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Is nominal consideration enough to constitute valuable consideration thereby making purchasers bona fide?
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SPLIT! As a general rule, donees do not qualify as bona fide purchasers under the recording system because they don't give consideration.
No. Nominal consideration cannot provide a claim for bona fide purchaser. (Anderson v. Anderson) |
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O conveyed Blackacre to A for valuable consideration. A did not record. O then conveyed Blackacre to B as a gift. B did not know about the conveyance to A. B recorded. Who prevails?
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B was a donee so he cannot prevail.
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O conveyed Blackacre to A as a gift. A recorded. O then conveyed Blackacre to B for valuable consideration. B recorded. Who prevails?
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A, because B had constructive notice since A had recorded. Donees should record promptly to protect against subsequent claims, but they cannot use the recording system to take priority over previous claims.
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Does the recording of an abstract judgment create a lien against land which was previously conveyed but unrecorded?
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Yes. The person recording the judgment would see nothing in the search if the previous conveyance was unrecorded. ALWAYS RECORD. (Rowe v. Schultz)
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Is a real estate attachment that is misindexed by the city clerk valid against a subsequent bona fide purchaser who had no actual notice of the attachment?
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SPLIT!
Yes. Index is not an integral part of the recording system, and they should have checked with the clerk. (Haner v. Bruce). Dissent freaks out, this is absurd, it's the clerk's fault. |
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Does a subsequent purchaser have constructive notice of a previous deed that is recorded outside the chain of title?
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SPLIT!
No.(Majority Rule) Deeds outside the chain of title are wild deeds and do not give constructive notice. |
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Does a restrictive covenant in a chain of title to the dominant land have the same effect on the servient land even if it's not mentioned in the chain of title?
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SPLIT!
No. Purchasers do not have to search every chain of title from a common grantor's roots in order to unearth potential restrictive covenants. (Witter v. Taggart) |
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Does the construction of a fence on the land in question provide constructive notice that someone was claiming title to the land?
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Yes. Fences satisfy the requirement of actual, open, notorious, and visible occupancy. ALWAYS LOOK AT THE PROPERTY-legal obligation.
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What constitutes notice under the Uniform Marketable Title Act?
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actual knowledge, receipt of notice or from all the facts and circumstances known to the person at the time in question that person has reason to know it exists.
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What is the effect of the Uniform Marketable Title Act?
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It operates to extinguish interests and claims existing before the effective date of the root of title (A conveyance where the marketability determination starts)
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What is required to find adverse possession?
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1) exclusive possession 2) actual and uninterrupted possession 3) open and notorious possession 4) hostile possession and under a claim of right made in good faith 5) Statutory period
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In a claim for adverse possession, does it matter if the person actually believes the land is his or not?
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No.
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What is the torrance system?
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All title should be ultimately determined by judicial proceedings. Enter a judicially determined title and deliver the certificate of title to the owner. It has never caught on in the US.
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In an adverse possession claim, can two parties tack heir periods of possession together in order to establish title?
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If there is sufficient privity of possession. Where a purchaser of land incloses and occupies a tract outside his boundaries, believing it to be included therein, and in that belief conveys to another by the same description, his possession may be tacked to that of his grantee. (Carpenter v. Huffman)
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What is the ultimate fact to be proved in an adverse possession case?
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That the claimant has acted toward the land in question as would an average owner, taking property into account the geophysical nature of the land. (Jarvis v. Gillespie)
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When does the statute of limitations begin to run in an adverse possession case?
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Not until the true owner has knowledge or ought to have knowledge of the facts constituting the injury and cause of action.
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What if the adverse possession claim is for property under the surface?
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It cannot be open and notorious (visible), and therefore cannot be obtained by adverse possession. (Marengo Cave Co. v. Ross)
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Is a title insurance company liable for tort claims in addition to its contractual obligations?
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SPLIT!
No. The relationship between the insurance company and the customer is only a contract of indemnity. Tort liability may exist if the insurer has voluntarily assumed a duty of searching title for the insured's benefit in addition to the contract.(Greenberg v. Stewart Title Guaranty Company) |
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What precisely is the insurance company providing when they insure against loss or damages sustained or incurred by the insured by reason of lack of a right of access to and from the land?
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As long as there is a right of access (no matter how poorly kept) the insured has no claim. Dissent: "reasonable" is implied in right of access. (Gates v. Chicago Title Insurance Company).
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What must be included in a deed?
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Grantor's name, grantee's name, words of conveyance, description of land, grantor's signature, (sometimes signature of two witnesses)
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What is a metes and bounds description of land?
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Starts at a definite point on the boundary of a tract of land and traces its perimeter by reference to appropriate courses and distances back to the starting point.
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What is a government survey description of land?
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All the land west of the Mississippi and North of the Ohio River was divided into rectangular tracts by running parallel north and south and then east and west. Initial N/S line is called the prime meridian, and initial E/W is called base line. Land is identified by reference to the principal meridian an the base line.
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What is a plat?
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A surveyor prepared map of the subdivision by dividing the area into blocks and the blocks into lots. The blocks and lots are described by metes and bounds on the plat and numbered for ease of reference.
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Part of the Northeast Quarter of the Northeast Quarter of Section 9 Township 16 North Range 13 East all in Douglas County NEbraska as recorded in the Douglas County Register of Deeds office." Does this suffice as a description?
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No.
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"All lands and real estate belongings to the said party of the first part wherever the same may be situated" Does this suffice as a description?
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No.
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"My farm." Does this suffice as a description?
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Yes. (You can look it up in the deeds, still kind of bizarre though).
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"The lot on which the residence and Dairy-Joy or ice cream business of Kenneth L. Bennett is located." Does this suffice as a description?
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No.
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What is a general warranty deed?
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Seller promises that the title is free from defects not listed in the deed.
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What are the six covenants included in the general warranty deed?
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PRESENT: Seisin, right to convey, no encumbrances,FUTURE: quiet enjoyment, warranty, further assurances
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What is a special warranty deed?
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It includes the same six covenants as the general warranty deed but the grantor promises only that the grantor did not create a title defect. If the defect is an easement created by the grantor's predecessor then the grantor is not liable for breach of the covenant against encumbrances.
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What is a quitclaim deed?
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No title covenants. The grantor simply conveys whatever interest the grantor has in the property.
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In the sale of house in an existing violation of a city ordinance and a restrictive covenant a breach of the covenant against encumbrances?
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SPLIT!
It is not an encumbrance rendering unmarketable title, but it is restrictive to what they can do with their land. Yes. |
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When a grantor conveys the land twice and the original grantee sues for specific performance and wins, does this constitute an eviction for the subsequent grantee?
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Yes; it is a breach of warranty and quiet enjoyment.
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Does grantee's knowledge of a prior potentially superior claim to the land bar their claim for grantor's breaches of covenants?
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No, such covenants warrant against known as well as unknown defects.
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When does the statute of limitations begin to run when the grantee is evicted and warranty/quite enjoyment are breached?
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Not until the eviction becomes final.
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Which covenants run with the land in a general warranty deed?
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Warranty and quiet enjoyment
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Which covenants are personal in a general warranty deed?
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All the present covenants. Seizin, the right to convey and covenant against encumbrances.
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When the covenant against encumbrances is breached, what is the remedy for a remote grantee?
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The grantee must take recourse against his immediate grantor, and that grantor can sue his, etc. back to the original.
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What is the remote grantee's option in collecting damages for a breach of the covenant against encumbrances?
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He can either discharge the encumbrance and sue to get his money back, or he can collect nominal damages.
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What is the controlling factor in determining the question of delivery of a deed?
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INTENTION OF THE GRANTOR!
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What does it mean when a deed is delivered in escrow?
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They are given to a third party to be delivered to the grantee upon the satisfaction of a certain condition (such as payment of the purchase price, or upon the occurrence of a particular event (such as the death of the grantor)).
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Is there valid delivery of a deed where the deed is held by a third party depositary for safekeeping subject to be returned to the grantor upon request, to be transferred to the grantee upon the death of the grantors?
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SPLIT!
Generally, if the deed is not delivered in the lifetime of the grantor, no right or title is conferred on the grantee. There is an exception if the grantor delivers the deed to a third party to be delivered at his death. As long as the intention is clear, the deed may be valid even if the grantor retained his right to take it back up until his death.**Intent is key Recording of the deed=rebuttable presumption of delivery |
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O, prepared and signed a deed transferring his farm to S for life, remainder to S's sons. Angry at this disposition, S tore up the deed in O's presence and threw it in the wastebasket. O died, leaving the farm by will to S's daughter. S's sons claim the property. Who prevails?
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S's daughter.
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When does a contract merge into a deed?
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When the deed satisfies the contract. Collateral agreemetns call for acts by the seller which go beyond merely conveying clear title and placing the purchaser in possession of the property.
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What is required to establish a breach of the implied warranty of habitability?
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1) that the house was purchased from the defendant-builder-vendor 2) that the house contained a latent defect 3) the defect manifested itself only after its purchase 4) the defect was caused by the builder's improper design material, or workmanship 5) the defect created a substantial question of safety or made the house unfit for human habitation. The claim must be brought within the three-year statute of limitations and the six year statute of repose.
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Can builder-vendors disclaim express and implied warranties?
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Courts generally say yes, if they use clear and unambiguous language.
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Does an implied warrant of habitability exist in the sale of a used home by a non builder-vendor?
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No; tort theories of misrep./ fraudulent concealment are alternatives open to the unknowing buyer.
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What are the essential elements of fraud?
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1) material representation of a pst or existing fact 2) the representation is false 3) the representation is made with knowledge or reckless ignorance of its falsity and 4) the representation causes a detrimental reliance by another.
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How does the Uniform Vendor and Purchaser Risk Act allocate the risk between seller and purchaser?
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The purchaser is relieved from the contract if he is not in possession and if the property is materially destroyed without fault on the part of the purchaser.
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