Real Estate Transactions Outline Fall 2012
IV. INTRODUCTION 1. Ethics
a. Abuse of process by lawyers who are in the know b. Rules regulating the Florida Bar i. Korte v. US Bank Natls Assoc. –frivolous defenses ii. JP Morgan v. Hernandez – fraudulent documents iii. The Florida Bar v. Adormo – class action $7 million settlement 2. History a. Treaty between Spain and US that made Florida part of US was concluded in 1819 and proclaimed in 1821. 3. MISC: a. I% rule: every buyer should be willing to pay 1% of the purchase price to hire a lawyer to deal with buying/selling real estate
IV. CONTRACTS FOR THE SALE OF LAND 1. Real Estate Brokers
a. Broker is the agent of the seller b. If broker is successful in securing buyer, then she gets % of sale as commission i. Because of the relationship of commission to selling price, agents may have an incentive to sell at the highest price, but that is not necessarily how it works in reality) c. Broker’s Authority i. Traditionally brokers market home (MLS, etc), review contract, negotiate with buyer/seller, locate property for potential buyer, arrange showings, provide information like relative property values, most recent selling prices, property taxes, give information on financial options, assist in formatting offers/counters/acceptances Power to consummate a sale, sometimes (broker contract could give broker ―power of attorney‖) ii. Realtor represents the seller unless you do something differently in your REB contract Single-agent relationship with seller No brokerage relationship (almost disinterested) Transactional broker (good for the deal) iii. BROKER HAS A DUTY TO INVESTIGATE SELLER’S PROPERTY iv. Unbundle Broker services Broker can unbundle his/her services, but 9 states have minimum service laws that dictate the services that a consumer must purchase when entering into a relationship with a real estate broker. 8 states have min, service laws, but allow consumers to waive (including Florida) These laws may harm consumers (1) reduce choice; (2) brokers who would offer less can’t (3) don’t ensure quality d. Drake v. Hosley (AL) 1986
i. Facts: REB, Hosely found willing, ready and able buyer, but seller sold to someone else and didn’t want to give H commission. ii. Trial Court: real estate broker was granted commission on summary judgment; ct concluded broker fulfilled the terms of the sale iii. ALSC: affirms: the Agreement provided that broker would receive 10% commission if he (1) located a buyer willing and able to purchase at the terms set by seller or (2) the seller entered into a binding sale during term of agreement. iv. Traditional Rule: Broker entitled to commission when he produces a buyer ready, willing and able to purchase the property on the seller’s terms, even if the sale is not completed. (protects marketplace) v. Dobbs Rule: In the absence of default by the seller, the broker’s right to commission comes into existence only when his buyer performs in accordance with the contract of sale. (broker gets paid only at closing unless seller defaults vi. TAKEWAY: Hosely found a group of buyers willing and able to perform in accord with the terms set by the seller, but they were prevented from doing so by the seller’s frustrating conduct. The buyers tried to perform by tendering checks for the down payment ―within 10 days of clear title‖ as required by the earnest money agreement. The sale did not take place because the seller, Drake, sold the property to a third party during the 10 day closing period. Thus, even under Dobbs rule, Hosley is entitled to his commission. e. Listing Agreements i. All listing agreements must be in writing (Statute of Frauds—every agreement that might take more than one year must be in writing) f. Material Defects and Compensation DUTY TO DISCLOSE i. ―seller must tell real estate professional of all material defects and will indemnify RE professional if seller does not disclose tree fell on roof (repaired)—did that materially effect the value of the property? Peacocks in neighborhood Dairy in neighborhood Slash: house not big enough and not enough parking Toxic Chinese drywall Flooding, may need to disclose bc prone to flooding or mold That previous resident diagnosed with HIV/AIDS, death, murder, suicide n property, not material Gilchrist v. Rayonier (1997): FlaSC held (1) one who negligently supplies false information for guidance of others in a transaction in which he has pecuniary interest is subject to liability under a theory of negligent misrepresentation for pecuniary loss caused to others by their justifiable reliance on information, and (2) statutory comparative fault provisions apply to actions involving negligent misrepresentation M/I Schottenstein Homes v. Azam (2002): FLaSC held the purchasers stated a cause of action for fraudulent misrepresentation when developer told homeowners that a nearby parcel of land was a permanent natural preserve when he knew there were plans for a school to be built on it. ii. DISCLOSURE
Is everything in the contract for sale that you thought you were getting?
2. Buyer has no duty to inspect in Florida. Broker can’t disclose confidential information. Has to be signed (usually by person you want to hold accountable to contract) iii. probably won’t be held liable g. Statute of Frauds: sale of land to be in IN WRITING. Types of Contracts: i. clear. Then. What happens during the executory period? i. marketable title). mortgage. arrange for move. maybe seller needs time to find a new home. 3 most often mentioned acts that constitute part performance (most of the time need 2-3 of these factors) payment of part (or all) of the purchase price—partial payment alone is almost always not sufficient going into possession of the property making substantial improvements
. description of property.RESIDENTIAL: have to disclose anything that materially affects the property value (from seller’s POV). b. the seller/buyer make a contract for sale that gives a 30-90 day executory period. Check that seller really owns property (good. Confidential Information i. Outside of CA. maybe Buyer needs to get a loan. Doesn’t have to be in a single instrument (email exchange) ii. First. access (access goes with status of title) Limitations of Actions: Actions for fraud: 4yr SOL from time you knew or should have known—after 12yrs from date of lie lost right to sue) iii. Integration Clause: this listing contract constitutes the entire agreement i. In California. price (definitely an essential term). Short-term contract (45-60 days then sale is over: sales contract) ii. The Statute of Frauds and Part Performance
a. maybe buyer is concerned about physical condition of house and wants an inspection. Part Performance Doctrine—takes contract out of the SOF—still have to prove the contract by clear and convincing evidence i. Long term contract = installment sale contract (combination of deed. Have to have a ―meeting of the minds‖: parties’ names. d. sell previous house. Most states hold broker liable for affirmative statements that turn out to be false and silence when the broker knew something was wrong. How to tell if materially affects: Threat of litigation. i. but could have been found with inspection. the contract is performed at the closing. promissory note all in one) e. Brokers have an affirmative duty to inspect and can be held liable for not investigating. but broker is required to disclose adverse material facts to a prospective buyer h. if brokers have no actual knowledge. or failure to disclose the information would constitute fraudulent misrepresentation ii. so materially dangerous that you might get sued. unless disclosure is required by statute. c.
It is an AFFIRMATIVE DEFENSE and doesn’t prevent a suit from being filed. The contract stipulates that the sale is subject to J obtaining a home loan for 90% of purchase price ($102. typically in a suit for specific performance. good/accurate description. J paid $500 and took possession of house. Damages and Specific Performance i. Rosenfeld v. Bachstadt (NJ 1982): B agreed to sell real estate to Don by way of purchase money mortgage. Donovan v.‖ g. but subject to all other terms (2) oral modification not subject to SOF (3) J breached by failure to close. Loss of bargain damages are traditionally measured as the difference between the contract price and the market value of the land on the date of the breach b. Don sued
. so C bought another home. signature (need express authorization to sign for someone else) Lawyer can’t get you into a contract (by signing for you) but may be able to get you out. less the portion of the purchase price already paid. J’s did not fill in blanks on contract about what interest rate they were willing to pay. Ct finds no meeting of the minds. so can’t argue ―reasonable‖ interest rate and J’s didn’t know wife wouldn’t be on deed until day before trial and refused to perform a year earlier. C’s tried to argue for more damages but ―the measure for damages for a vendee’s breach of an executory contract is the difference between the contract price of the land and its market value at the time of the breach. so mortgage company denied loan. Can you make a contract for sale of real property via email? ii. PP is usually said to be recognized only in equity. Either buyer or seller can seek either remedy ii. i. Johnston v. Remedies and Real Estate Contracts
3. they came to an oral agreement—J will buy house for 110k. Trial Court: C sues for breach of contract because J won’t buy house bc can’t have wife on loan. ii. but the emails in the instant case did not create a binding agreement bc it lacked a vital term: did not set forth any understanding as to the amount of the contract deposit and did not indicate how the parties intended to treat the commercial lease then encumbering the premises. price. but couldn’t get good title to property. Defendant wants SJ dismissing the complaint that seeks specific performance of the contract for sale of the Defendant’s home. Closing date set. Then. House only appraised for 110k. COA: statute of frauds not applicable because of J’s part performance ($500 and moving in) (must prove making of oral agreement and part performance by clear and convincing evidence). J told C they had been preapproved. D argues the email was preliminary and did not satisfy SOF. f. Email signature is valid for SOF. But.ii. Damages to C in 10k. Zerneck (NY 2004) i. RULE: essential contract terms: name of buyer/seller. Curtis (ARK 2000): C is to sell house to J for 114k (there is no real estate agent). J refused to close bc interest rate unacceptable and could only get mortgage in his name and not in his and his wife’s. TC found: (1)parties had orally agreed to modify their original sales contract from 114 to 110.600). iii.
Don wanted difference in interest between B’s mortgage and new mortgage he had to get. Compensatory damages are designed to put injured party in as good of a position as he would have been if performance had been rendered as promised. survey. Interest on existing mortgage loans iii. SELLER’S DAMAGES i. seller’s obligations are solely illusory d. loss-of-bargain damages only available to buyer if the property’s value is higher than the contract price iii. costs and expenses incurred in connection with proposed acquisition. Loss must be a reasonably certain consequence of the breach although the exact amount need not be certain. ii. D didn’t close bc of divorce. But. but entered into a contract for possession with Ps for 1500/month. Carrying cost of property until resold ii. Austin Bank of Chicago (Ill COA 2004) i. B was not chargeable for loss that he did not have reason to foresee as a result of the breach.
. i. Buyer’s damages are limited to restitutionary recovery when the seller’s title is defective but the seller has acted in good faith. Cost of second broker’s commission v. c. Interest income seller expected to earn on purchase price iv. What other damages might buyer be able to get? Expenses for title search. RULE: Buyer can recover benefit of the bargain damages when the seller breaches an executory contract to convey real property. Increasing tax liability as a result in a change in tax laws vi. 7/2000 Defendants accepted offer from Plaintiffs to buy condo. it is disfavored in Florida courts. BUYER’S DAMAGES i. When contract makes purchaser’s sole remedy termination of K and refund of deposity (recission and restitution). is followed in about half the jurisdictions. wouldn’t give difference in interest rates reasoning that contract was for sale of property and financing was only incident. usually entitled to amount paid on purchase + interest. Schwinder v. improvements made (the difference between market and contract price may not be suitable in all situations). What position that would have been depends on the parties’ reasonable expectations. does not apply if seller breaches contract ii. atty fees Airfare to travel to negotiate and execute contract Rent at present location Loss of particularly favorable financing OFFSET by still have $/or saved interest buyer would have paid on mortgage iv. Date of valuation for remedies: market value as of date bf breach (maybe resale price) Good to use resale price bc appraisals can be imprecise v. Even if you get specific performance. can still get damages e. TC: Don was entitled to recover costs for title search and survey. COA: REVERSED: ct concluded that statute intended that the general law of damages for breach of K applies.for compensatory and punitive damages.
If the seller does not own all the property covered by the contract. When contract gives buyer only remedy of getting deposit back then. specific performance with an abatement of the price. SP is a matter of sound judicial discretion. unless seller elects to enforce this agreement‖. h. bearing some relation to the damages which might be sustained as of what date is reasonableness measured? Usually the time the K was entered into. Mahoney v. Specific Performance may be denied when: It would produce unjust/unconscionable results If K is excessively vague If vendor has resold to another purchase who had no knowledge of the prior K. the purchaser may desire. Contract gives 2 remedies 1. Factors to consider: Parties entered contract freely/deliberately with no fraud or oppression by either party (binding contract) Property has to be ―unique‖. Ct says can’t sue for damages because of this clause. seller always gets better deal. g. it is an illusory promise i. so damages are sometimes considered an adequate remedy Both SP and other remedies may be denied if there are precedent or concurrent conditions which have not been fulfilled or if the plaintiff is in substantial breach. Ct doesn’t like bc when have both damages. Liquidated Damages Clause: i. ii. Terms ―earnest money shall be forfeited as liquidated damages. ct will uphold prior K) If purchaser was buying the land for immediate resale at a profit. its supposed uniqueness is of no real consequence. willing and able‖ ii. SPECIFIC PERFORMANCE i. If the K gives the vendor the right to forfeit the purchaser’s earnest money as liquidated damages. Enforce agreement. then unjust enrichment one way or another. (if purchaser had notice.
. or get specific performance. but sometimes date of breach or date of breach + date of K. the clause may be treated as the vendor’s sole remedy iii. Plaintiff sues for damages arising out of breach of earnest money agreement bc the damages are greater than the amount stipulated in the liquid damages clause. Keep earnest money 2. Tingley (Earnest Money) (WA SC 1975) i.even after divorce D wouldn’t close. Ps sued for specific performance and won and ct gave them back some of the rent they paid f. and can generally obtain. Contract says seller can either keep deposit. Plaintiff has to be ―ready. 3 elements that must be validated to enforce damages clause parties intended to agree in advance to the settlement of damages that might arise from the breach the amount of liquidated damages was reasonable. sue for actual damages. Other Cases: i.
previous conduct of the parties. Parties entered into a contract for 545k cash with 10% down. some cts accept and some courts see it as a penalty and reject. On new closing. how do we know if party has performed within time frame? ii. damages would be uncertain in amt and difficult to prove ii. specific number of days provided for performance g. the usual rule is that the vendor may not seek actual damages. Almquist (NYSC 1998) i. from implementing forfeiture of down payment and from contracting to sell apt to anyone else. f.02. Buyers brought suit seeking to enjoin sellers from terminating K. Miller v. Fla. Time is of the essence: is a material breach. Closing date set. When is lateness a material breach of the contract? b. but day before. CLASS REVIEW: i. What happens if the blank is left blank? Buyer should be responsible for getting this blank filled n (mutual mistake or unilateral mistake)
5. the experience of the parties and the possibility of hardship or prejudice to either one. If time is not of the essence how far beyond the agreed-to closing date is the late party? e. Fla up to 15%. COA ―cannot conclude that the time allotted in the time of the essence letter in response to a short adjourned closing date chosen by the buyers was reasonable so as to inflexibly bind the buyers to an April 16th closing date. but now time is of the essence. Financing and the contract: what if you don’t have the number of years or the % rate in the contract? Is this a material part of the contract? Whose responsibility is it to make sure blanks in contract are filled in? Seller because she is going to be the one wanting to enforce them. TC dismissed. Stat.01. ii. Did the original contract make “time of the essence”? c. presence or absence of good faith.
4. breaching party may not be able to enforce in equity. Sellers said ok.03 and 695 (read) b. Vendor may not be allowed to keep deposit if he suffered no damages at all How much is reasonable? Most courts up to 10%. . Title to be Conveyed
a. we keep 10%. If liquidated damages clause does not address the issue of other damages. . has one of the parties made ―time of the essence‖ unilaterally? d. non-breaching party has to be ready. Neighbor offers to buy coop unit next to theirs so that they can renovate for more space. Marketable Title: ability to freely sell your title to property whether buyer is free of doubt of what she is buying 7
. 689. buyers asked for more time (no time of the essence clause in contract). Nature and object of the contract. Factors to consider when deciding what constitutes a reasonable time to close i. If the clause does discuss other damages. buyers weren’t ready and sellers sent a letter ―you breached. If not. Moved date. willing and able to perform. Many cts allow vendor to retain a breaching buyer’s deposit whether or not
any clause in the K provides for it. Time of Performance and Tender
a. but may seek specific performance.
so they want to keep $. Definition (77): a marketable title is one which is free from liens or encumbrances. Haisfield v. sellers got deposite. title is unmarketable Amount of encumbrance is not definite Acts as a building restriction Not an open. Issue: whether a line of sight or view easement renders title to the property at issue unmarketable. one which will not expose the purchaser to hazard of litigation or embarrass him in the peaceful enjoyment of the land. physical encumbrance But subject to such restrictive covenants ―which do not materially and adversely affect the use of the property for residential purposes or render the title unmarketable‖ (pg. Stat. Lape i. Haisfeld (buyer): sellers divide parcel in 2. 589. Lapes (seller). visible. sell first plot with sight easement. buyers breached by not closing. iii. they call it insurable title/not martketable title bc could have title defect that title insurer still insures c. Assurance of marketable title: Lawyer’s opinion letter Title insurance (most common) title search.i. but subject to restrictive covenants of record which do not materially and adversely affect the use of the property for residential purposes or render the title unmarketable‖ iv. in turn. Second buyers. Haisfeld’s can’t build what they want bc of easment. Lapes say defect not materially adverse. ii. thereby justifying the buyer’s refusal to close the transaction. TC found for sellers. one which a reasonably well-informed person. buyers appeal. so it is buyer’s perspective of materially and adversely affecting ―The line of sight easement in this case it clearly an encumbrance upon the property restricting its use in such a manner as to render the title
. would be willing to accept with the assurance that he.02(1)) Buyer looks at record herself iii. Title insurance: Hires layer to protect your property so you can keep property in event of dispute Compensate for loss in value When title insurance issued. ii. 75) buyer’s use. Issue: Whether a buyer of real estate may be justified in refusing to complete the purchase bc she is dissatisfied with the quality of the title the seller proposes to convey. they claim no marketable title and want their $ back—gave 60 days’ notice to cure. one which discloses no serious defects and is dependent for its validity upon no doubtful questions of law or fact. could sell or mortgage the property at its fair value. then binder that goes through chain of title with encumbrances Warranty within deed (Fla. acting upon business principles and with full knowledge of the facts and their legal significance. Contract: title must be ―free from all encumbrances. COA: title is unmarketable bc: Restrictive covenant is material. d.
The existence of a restrictive covenant that renders title to the property unmarketable is not excepted under the provisions of P 14 of the purchase agreement. Defects that Make Title Unmarketable i. physical encumbrance of the property that might have been considered in the establishment of the purchase price. then some court may still allow buyer to get out of K bc of unmarketable title. Notice to Vendor or title defects: buyer must examine title before closing. Access: A complete lack of access to a public road has usually been held to make the title unmarketable iv. Existing adverse possessors ix. mortgages. If defect. easements and liens) are usually considered to be title matters. Visible or Beneficial Encumbrances: some cts hold that an easement does not make the title unmarketable if it is obviously visible and is beneficial to the land. If buyer is aware of the encumbrance and K doesn’t expressly provide that the buyer will take the property with the encumbrance. e. then usually thought nor to be marketable bc may need lawsuit to determine ownership vi. but some states require disclosure and some states have lien/superlien that can be imposed on the property to reimburse govt for cleanup viii.
. Encumbrances: something that impacts use. they violate marketable title. possession of property—not the same as a general covenant (leases. visible. ii. she must notify the seller and give fair opportunity to cure. Implied Covenant of Marketable Title i. unless incurable. Some Ks for ―marketable and insurable‖ f. General Factors of Defects making title unmarketable: Violation of covenants Title links not of record Unreasonable risk of litigation xi. iii. Risk of litigation: HOA. If K doesn't expressly provide that the buyer will take the property subject to them. Ordinance violations: regulatory prohibition on construction of bldg was a title encumbrance. Adverse Possession: if seller’s title is based exclusively on adverse possession. every K has a implied covenant of marketable title ii. The existence of the easement is not an open. Encroachments: something built by neighbor on property is usually held to affect mkt of title (or if building is on neighbor’s property) bc of threat of litigation v. mineral reservations. covenants. CDDs—does lawsuit threaten to impact marketability of title? x.unmarketable. Hazardous waste: physical conditions by themselves have no title implications. Even when it doesn’t expressly provide for marketable title in the contract. Sometimes existing structures which violate zooming or other ordinances would be sufficient to make title unmarketable vii. Some Ks ask for ―insurable title‖ iii. a power line easement along the back of a property line is a typical example.
BC Hulton has a valid judgment lien against Duro’s interest in the real property before Duro assigned that interest to Samuelson. Sam took Duro’s interest subject to Fulton’s judgment lien. had equitable title. Title has to be marketable at closing xiii. COA says sheriff sole under judgment lien— important that judgment lien recorded before. Duro living on property. otherwise. d. b. Quitclaim deed ―I remise. Hold: a judgment debtor cannot divest his land of a judgment lien or lien made by sheriff’s sale by transferring the title to another person. Special warranty deed: warrants everything except a few special things or may limit warranty to thing that happened during ownership iii. Characterization issues: during the executory period should we characterize a given party as owning a REAL property or a PERSONAL property interest. ii. Risk issues: during the executory period. she must raise it prior to accepting delivery of the deed (only remedy for breach of most of the deed covenants is damages).(also 30 year rule) h. release. we do back to this treaty and find all the deeds since then (if you want to cross all of your ts. bargained and sold‖ this propery to buyer ii. Seller has legal title. Fulton said I have lien on property and sheriff sold property. Ex: a party to the K dies. Equitable conversion usually applied to:
. Whether recording a judgment imposes a lien on a judgment debtor’s interest in land which he is purchasing under an executory contract. except Spanish Land grants and English land grants: to determine marketable title. Facts: Fulton had a judgment against Duro. ii. g. and quitclaim my deed to this property‖
6. Fulton and Duro had prior squabble. Equitable Conversion
a. Type of Deed to be Delivered: ―no good deed goes unrecorded‖ i. leaving a will that gives her real estate to A. use the 30 year presumption in UTS) i. Fulton has judgment against Duro. Adams-Onis Treaty of 1819 (1821): When Florida was given to the US. c. Merger of title covenants: if the purchaser has some objection to the title on the basis of the implied covenant of marketable title.xii. Samuelson bought it from Duro before sheriff sale and said Duro sold me equitable title before sheriff sale. we don’t have to guess what marketable title is. iv. General warranty deed: Fla Stat 689 ―granted. In FLORIDA. Doctrine holds that ―equitable‖ title passes to the purchaser as soon as an enforceable contract to sell land is formed. but personal property to B. even though it is clear that the ―legal‖ title will remain with the seller until the closing and delivery of a deed. buyer has equitable title. Questions which EC is used to resolve: i. Duro i. iii. something occurs that jeopardizes the property’s value or usefulness. Fulton v. we have Uniform Title Standards: Standard 00: the attorney should construe questions in favor of marketability. when Sam goe equitable title had Fulton lien on it.
K for sale in Fulton was a long-term installment sale contract and Earnest money contract (short K) ii. If it is the purchaser who dies. 689. Example Contract E: Ingress and Regress – have to be able to get to property viii. the vendor’s interest descends as personal property. buyer gets deposit back. buyer who owns property sign mortgage (can be different people. Benton gives Shrader mortgage as wraparound contingent on bank’s approval. whatever it may be)
. reverse mortgage. d. Legal Changes: zoning change (contract will not be enforced if zoning change has made property unusable for purchaser’s intended purpose). Deed has to be in English x. Shrader v. Foreclosure i. Marketable title: objective in definition but when it comes to buyer subjective (by application) ii. Buyer pay price in case. TC gives alternative: 1. Rick of losses: losses equitable conversion imposes on purchaser: i. title insurance vii. Death of contracting party: If a court concludes that conversion has occurred at the time of the vendor’s death. her interest descends as realty. wrap-around mortgage b. or other physical damage ii. Uniform Title Standards iv. Example Contract A: Title Insurace ix. Note 2 pg 79 important! iii.i. So. Contract requires seller to convey marketable title v. COA held TC abused its discretion when is gave the buyers the second alternative bc sellers are entitles to full benefit of their bargain. wind. ARM. Conversion on allies if there is a contract that equity would specifically enforce iii. borrowers sign note. A few courts have held there is no conversion until all conditions precedent in to the transfer of legal title have been fulfilled. but did offer alternative. but most likely same c. Duro: seller had personal property interest. Borrower has to own property ii. Borrower doesn’t pay (default. Building code change: Eminent domain action h. EXAM REVIEW: i. 2. balloon mortgage. Buyer needs to sign mortgage/note iii. flood. Equitable Conversion: Fulton v. e. buyer had real property interest
7. fixed rate. g. It is widely accepted that the purchaser’s equitable interest is in real property and therefore subject to judgment liens. Buyer assume seller’s mortgage. Bank didn’t approve wrap around. f. Sometimes no conversion if the title is unmarketable as of the date at issue.02 warranty deed form vi. Benton (Due-on-Sale Clause) i. Introduction to Mortgage Financing
a. Physical: Fire.
b. intestate succession. Bank approved the loan. B wanted to move in before school starts. K had financing contingency clause—B had r make prompt application and pursue with diligence. made offer. and by court decrees and legislative acts. Conditions may involve events which no one promises will occur. Deed must be in writing. signed by the party bound thereby. Final judgment of foreclosure viii. and rescission potentially available to the non-breaching party b. B’s attorney also represented the bank. Deeds
a. although not transferred by deed specifically. satisfactory completing of certain physical tests. buyer gets deposit back. bargain. DEEDS AND TITLES 1. Covenant = promise one who enters into it is obligated to perform nad one who doe not do so may be subject to a suit for breach. Mortgagee sends demand letter (advises of default) v. Mortgagee sends acceleration letter (request all $) vi. Conditions in Contracts
a. Termination of right of redemption
8. the successful procurement of a zoning change. (most common arrangement of financing to permit the purchase)(also purchaser’s sale of other real estate. and acknowledged by the party before two people and notarized. Notice of foreclosure sale ix. then K void. requested inspection bc wanted to put in tennis cts. Deed transfers legal title.
III. but didn’t give interest rate and hadn’t sent approval letter. While deeds are most common way to transfer title. with such remedies as damages. convey. Deed uses some or all of the verbs: grant. sell. Mortgagee files foreclosure lawsuit Last day to pay before we sell your property on courthouse steps. Jacobs i. Elements of a deed:
. ii. buyer doesn’t go to another bank bc of wetlands issue. Distribution of cash sale proceeds xiii. no right of redemption after that date (rt of redemption = pay what’s owed and save property from foreclosure) vii. c. Adverse possession and death of joint tenant have same effect as transferring deed. If conditions not met. it is merely a statement that a party’s obligation to perform some covenant is dependent upon the happening of some event or occurrence. B had wetland imspection-discrepancy between maps/wetland.iv. and which are entirely outside the control of the parties. COA holds buyers efforts reasonable and should get deposit back. can also transfer by wills. specific performance. Certificate of title xii. Condition is not a promise. obtaining of an easement to benefit the land c. Purchasing at sale xi. Foreclosure sale x. Barber v. buyers atty tells bank and bank withdraws from loan.
but can lead to problems if not) x. indicating that deed has been recorded (doesn’t have to be recorded. Violation of zoning or land use ordinance is not an encumbrance.09: statute of uses: right to receive money is not interest in real property (legal title)
. concurrent tenancy rights. if there is consideration. TC says no consideration is necessary. warranty of seisin: a warranty that the vendor owns the estate conveyed b. Special warranty deed: contains a statement by the vendor that the estate transferred is not otherwise than as stated in the granting clause and the premises because she herself has not encumbered the estate. can’t give title back. or other liens. e. divesting conditions. Notary public’s certificate of acknowledgment ix. Language envincing an intent ot make a conveyance ―words of grant‖ vii. Quitclaim deed: transfers ―as is‖ in which the transferor in effect says ―I’m not sure what I have. Recitation of consideration (not necessary. PC not related to Ross. Grantee’s name and an indication of the manner in which they are taking title iii. marital interests. Warranty deed or general warranty deed: vendor warrants that neither she nor any of her predecessors have encumbered the estate. Ross sues PC on theory of no consideration. but does give Ross 50k as ill-gotten gain. main consideration is love. PC then sells to Perez for 50k. Ross (old lady) conveys land to Peter C uses standard form.i. iii. Chase Federal Savings and Loan Association v. d. The date viii. Statement of exclusions vi. Deed is not a contract. Examples of encumbrances are easements. Reservation creates and leaves the grantor with a newly formed interest in the land (life estate) xi. Stamp of recorder. I give it to the transferee. There can be contractual terms in a deed. BUT. but whatever it is. pays $10 in consideration. Description of the real estate v. so don’t need consideration for transfer of a deed. running covenants. f. warranty against encumbrances: a warranty that no interest held by a third party limits or qualifies the estate being conveyed. profits. but still found in almost every US deed iv. present warranties are the vendor’s representations about the title at the time of the closing—there are 3 of them: a. 689. leases. do deed is good. Grantor’s name and signature ii. Exception: is a holding back of some previously existing interest (except the south 50 feet) 2. it should be GOOD and VALUABLE. Warranties can be either present or future: 1. warranty of the right to convey: a warranty that the vendor has the right to sell or convey the estate c. ii. Schreiber (131) i. mortgages. SOMETIMES you have exceptions and reservations in deed: 1.‖ g.
Township should be 36 sq miles. Cheney: Mom signed deed over to daughter. but instead the kids record the deed. but court says no delivery. b. Things are voidable when fraud in the factum (like Martinez)=undo. Adams-Onis treaty—US buys Florida from Spain 1819-1821 (Spanish land grants existed before 1818) v. creek) d. ii. vi. Martinez v. Things are void when fraud in inducement (forgery)=didn’t happen. etc) i. iii. Delivery and Escrows
a. But. put in safe deposit box that was in Mom’s and Wiggle’s name. if grantor never signed deed (fraudulent signing). Wiggill v. Acceptance is good proof of delivery. Ct says she had intent. ii. d. then void. how boundaries and contents of public lands ascertained. Area of township = 23040 acres. voidable. what survey says is what is right. Test in Florida: can surveyor locate piece of property with certainty c. Voidable=could be undone. court says no valid delivery bc no intent on parents part to pass title immediately. Recording is rebuttable presumption of delivery. He did it.
. c. Occasionally a count may say that no act at all is necessary if the intent is sufficiently clear. contains 36 1 sq mile sections of 640 acres each. Free survey system (old): no predetermined monumentation is used (post. Martinez: Issue: intent of parties to make delivery: Mom and Dad own. delivery can still be complete. Can be recording. Void=didn’t happen. doesn’t matter if survey is off. even if deed is never recorded. then you find out there were shenanigans. tree. Modern system: use base line and meridian lines. but didn’t have the act—didn’t dispose herself of the title before she died. All surveys start in Tallahassee on meridian—that is 0’0’. For legal description start at corner of a section and measure from there
3. Land Act of 1805 gave rules of survey. Mom instructed Wiggles to hand envelope with deed in it over to daughter when she died. and some act or behavior on the grantor’s part to evidence that intent. mountains.2. A Valid delivery requires the coincident presence of two facts: an INTENT by the grantor to pass title immediately. Rule: If deed signed. How do we know which property is being conveyed by a deed? Suveyors and legal descriptions b. but protect BFP. i. Delivery makes the deed operative and it is often litigated. But. want to give to son and DIL. but only she had key. Some lines jag because of curvature of the earth. A deed which has not been delivered is said to be entirely void. Land Descriptions
a. Spanish land grants are removed from this type of survey iii. give deed to kids to take to bank to hold. mark each of the corners (with trees or rocks) didn’t have iron stake in ground like they do today. ―It is what it is‖ iv.
then defect you may need to disclose. give to x. Chinese drywall—defect is latent. it may be defect of marketable title n. Are you misrepresenting? Hiding defects? Not disclosing? h.
4. Not readily observable 2. Slash: f. f. Is it latent (can be sued for)/patent (can’t be sued for bc subject to inspection)? iii. depending on the phase—if it smells is may be patent m. Latent: dairy water contamination d. Seller must disclose: 1. Hurricane tree on house—may not be a latent defect if fixed properly. bc of prior representations. Look at amount of time passed since fixed—any problems like mold j. the alteration is void. not the deed itself. Now. but at what point does it become public knowledge (when it’s on national news?)—what if buyer is local/not local? l. Warranties of Quality
a. if your property floods every time there is a big storm. Is problem a neighbor (so temporary) or inherent in design g. Stambovsky v. What did the buyer know? 1. LACK OF ACCESS is NOT defect on land. k. Did the seller know or not? iv. we are back to disclosure: b.e. There are latent (Less obvious) and patent (pretty obvious) defects in the property c. he wants to rescind contract. Ackley: NY slicker buys ―haunted‖ house. Madonna: defect to building. i. This works because grantor relinquished control. Should the buyer be estopped (seller defense)?
. Grantor can’t reserve right to revoke deed. Madonna dancing wouldn’t be defect in building if you can’t hear her (affects habitability)—old construction— whenever someone makes a noise I hear it. Is there a defect? (something that materially affects the value) ii. Seller knows about o. ―As a matter of law the house is haunted‖. If make changes to deed after signed. Give deed to someone else before die with instructions that when I die. especially bc of mold. In this case. but buyer had no idea. Superfund site—close to contamination—need to disclose. Patent: peacocks (and may be particular to one person. the house is haunted and you need to disclose. House on landfill—latent defect in property (sometimes personal knowledge may cure defect) i. But. Can put deed in ―death escrow‖. so may not be a defect) e. When buyer finds out. Haunted is latent defect. The seller facilitated that reputation. patent if buyer hears ghosts. Questions to ask i.
negligence is less objectionable than fraud. which are not readily observable and are not known to the buyer. Seller/Builder? Speight v. availability of additional land.11(4) can sue in negligence and breach of contract against contractor *****Bessett v. *****Johnson v. Relief from fraudulent misrepresentation may be granted only when the following elements are present: i. amt of revenue lodge brings in. its falsity is regarded as obvious. s.
v. represents knowledge that the representation is false
. then buyer can’t win ii. statue of repose 12 years Implied warranty of habitability in tort sue the seller BUT economic loss rule: If there is contract breach. bc of Florida stat 95. iii. i. the seller is under a duty to disclose. seller fraudulently misrepresented. Walters Development Co.p. However. However. Nor should the law encourage negligence. even though its falsity could have been ascertained had he made an investigation. if a mere cursory glance would have disclosed the falsity of the representation. Hold: where the seller knows of facts materially affecting the value of the property. could pursue a claim for implied warranty of workmanlike construction. false statement of material fact ii. Statute of Limitations on IWOWC: 4 years. although he might have ascertained the falsity of the representation had he made an investigation. The recipient of a fraudulent misrepresentation of fact is justified in relying on its truth. Duty is equally applicable to new/used property. Sellers knew of and failed to disclose that there had been problems with the roof. Issue: whether the Speight’s. Ltd.
q. When buyer asked. If you have a contract. as remote purchasers. unless he knows the representation to be false or its falsity is obvious to him. Seller now has obligation to disclose material facts.
u. We hold a recipient may rely on the truth of a representation. A person guilty of fraud should not be permitted to use the law as his shield. For instance. when the choice is between the two—fraud and negligence. you have the ability to negotiate a remedy. rook. t. Hold: IWOWC can be brought by subsequent purchaser Implied Warranty of Worklmanlike Construction is a judicially created doctrine implemented to protect an innocent homebuyer by holding the experienced builder accountable for the quality of construction. Basnett***** (What is the seller’s duty to disclose?): sellers misrepresented size. No contractual privity. The seller’s fraudulent concealment entitles the buyer to return of its deposit. can't sue in tort. Davis***** Seller knew of problems with roof and did not disclose to buyer. Speight (3rd owner) sued builders—implied warranty of workmanlike construction.
r. A person guilty of intentional fraudulent misrepresentation should not be permitted to hide behind the doctrine of caveat emptor (buyer beware).
v. so can’t sue in tort unless there is a statute.
(Johnson v. i. tax liens. covenant against encumbrances: nothing encumbering except what buyer has agreed to assume (mortgages. etc. so Johnson doesn't apply). alleging that vendor had made negligent misrepresentation regarding zoning restrictions on tract. Warranty in Deed: Covenants start running on date of closing or when you should have known. Question of whether a cause of action for fraudulent misrepresentation exists where the putatively misrepresented info is contained in public record is one of fact and should not be resolved through a motion to dismiss. has full common law covenants: i. Seisin: owner of property is only one that can transfer ownership 2. v. ii. after the transfer. consequent injury w. Schottenstein v. b.iii.. FlaSCt held: (1) one who negligently supplies false information for guidance of others in transaction in which he has pecuniary interest is subject to liability under theory of negligent misrepresentation for loss caused by the other party’s justifiable reliance on the information and (2) statutory comparative fault apply to actions involving negligent misrepresentation. We also conclude the doctrine of comparative negligence applies to an action for negligent misrepresentation. (not residential. The first of the mechanisms is the deed covenant/warranty in deed: a statement in (or a legal inference from) the deed itself which gives the grantee rights against the grantor if the title is not as promised. There are tother mechanisms discussed in the next sections: the recording system. Azam Homeowners sued for fraud in the inducement. Title assurance: the set of mechanisms which buyers of land use to (1) learn whether their sellers have and can convey the quality of title they claim and (2) obtain recovery f the title. If use warranty deed. HOA liens. checking public records yourself. intention that the representation induce another to act iv. Purchaser of tract of timberland brought action against vendor.. rescission and negligence alleging that developer falsely represented that a newarby parcel of land was permanent ―natural preserve‖ when developer knew that county had plans to build a school.)
. Present: 1. *****Gilchrist Timber Co. Davis applies)
5. Rayonier****** NEGLIGENT MISREPRESENTATION and NOT RESIDENTIAL. Title Covenants in Deeds
a. FlSCt held that purchasers stated a cause of action for fraudulent misrepresentation. lawyer’s opinion. x. the Torrens or title registration system. and title insurance. turns out not to be as represented. right to convey: grantor has right to convey (can’t when owner is crazy and can’t formulate intent to deliver) 3. The party who negligently transmitted the false information may be held liable when the recipient is able to establish a negligent misrepresentation cause of action as set forth in the Rstmt.
695. Proof of title b.01(1): Conveyances to be recorded: no conveyance shall be good against creditors or subsequent purchasers for a valuable consideration without notice. problem—what happens to large tract that gets smaller and smaller 2. c. then Basnett holds. 3 systems of public recorder index 1. tract: for each tract of land. Can we apply the affirmative defense of comparative negligence? Maybe if follow Gilchrist Timber and find that it was negligent misrepresentation instead of intentional. 695. Misrepresentation about status of title. 1. constructive notice. 2/3 interest was a matter of public record. Brown v. Notice: actual notice.ii. Title Assurance Methods
a. but found out then that only owned 1/3 mineral rights bc original seller kept 2/3 mineral rights. implied actual notice (doesn’t allow willful blindness. Torrens (doesn’t really exist for us) ii. What about damages? Dimunition in value measured the date of contract or the date of deed?. Covenant of Warranty: seller will defend title 2. Lober: Plaintiff buys house in 57. Covenant of Quiet Enjoyment: right to possess and use as your own promise by the grantor to compensate the grantee for the loss if the title turns out to be defective or subject to an encumbrance and the grantee thereby suffers eviction 3. all conveyances on one page. but lost bc not yet an eviction. Recording i. 15 years later tried to sell mineral right. ii. Seller didn’t tell about 2/3 interest. Buyer thought they had 100%. Covenant of Further Assurances: promise by grantor to execute such further documents as may be necessary to perfect the grantee’s title. Things to think about? Do we really have a loss? Yes. SOL: buyer buys without seller lawyer-didn't find the public record reservation—did seller breach seisin when had already recorded the reservation? Probably not. didn't know of competing interest
. breach of covenant of quiet enjoyment. Plaintiff tried to sue seller on i. so you are deemed to know) iii. but loss bc of SOL. iii. when intentional and negligent.
6. covenant of seisin. pay costs to cure. pay to litigate issue or buy the right back from cola company. grantor-grantee index: to/from alpha by year—doesn’t matter property or value 3. it’s recorded. then intentional wind. unless it is recorded.01 buyer takes priority when: 1. If intentional. Future Covenants 1.
c. as long as it's ―recorded‖. then no longer TBE. Boundary by acquiescence: uncertain of common boundary. didn’t have notice (BFP) iv. Tenants in Common i. If get divorce. Sue clerk for negligence. If one joint tenant sells. even if it is not properly indexed. creates a single interest. but can be prescribed. wholesale land grant under Swamp and Overfill Act. v.
7. Title Insurance company takes risk that there will not be a claim on property insuring buyer has insurable title. pd valuable consideration 3. wife can convey to hub and vice versa. c. Goes on for 7 years 5. Title insurance commitment
. but other says no. Pre-divorce. Marketable Record Title Act: statute that tells you have far back you need to search the records –cuts off certain old rights in land after the passage of a certain period of time (in Florida 30 years) d. Recorded even if clerk makes a mistake—when clerk screws it up. you won’t win. Title Insurance
a. each person has undivided interest in part of property (owns % of property). Has tight to use 100% of property. Don't forget matters that aren't of record that might affect title: 1. severs right of survivorship and owners become TIC. Three types of forms i. b. b. 2 people acquire property together. Ecretion. other person gets it. When one jt dies. goes to her estate. but only has a percentage ownership. presumed 50/50. realize it’s not right. Joint Tenants with Right of Survivorship i. Boundary by agreement: agree where fence goes up. but it’s wild bc neighbor never owned that part. when first person dies. water boundaries) 2. it is recorded. Florida is a Notice statute state: if you have notice. In order to have superior title. Adverse possession: have lawful right to be in possession and have been in possession for last 7 years (can’t have in a subdivision) 3. Wild deed: deed is not in grantor chain ex: if you make a deal with neighbor about pence and you get quitclaim deed from neighbor to show no interest. Husband and wife—married people acquire title at same time. becomes TIC 50/50. don’t reach an agreement. Two or more people. you can’t have notice. Like JTROS as fas as survivorship. These are non-record transfers!
8. one neighbor puts up fence on other’s property. Other says get fence off. Tenants by the Entirety i. now one lot reduced/one lot bigger 4. Different Forms of Property Ownership
a. fence stays for 7 years.2.
ii. lawyer can’t tell title ins co what’s going on. tend to be more comprehensive. Settlement
a. Affiliated business arrangement AFBA 5. lawyer) iv. Purpose: 1. lender. Info booklet b. mortgage. affidavits. ii.ii. What happens at closing? i. trust docs. prohibit anyone from referring services to closing b. 3. Pay 3rd party expenses (pay off seller’s mortgage)
. Mortgage services disclosure statement—have to disclose if they are going to sell it or keep it 4. satisfaction of judgment) iii. Overnight loan package to lender ii.
9. assignable c. Title insurer can pay or litigate when there is a claim. If title defect becomes known. Lenders title insurance policy: paid for by buyer. iii. Record docs (deed. Lender has to tell you the charges for closing before the closing c. certain disclosures a. Owner’s title insurance policy (issued in amt of purchase price or by appraisal) iii. Sellers and 3rd parties get paid (realtor. Certain info about time of loan app a. Applies to: 1. If title insurance co doesn’t win. Ownership changes ii. Post-closing i. To help consumers become better shoppers for settlement services 2. b. RESPA: supposed to standardize closings across the country) consumer protection statute. then ins co pays insured the diminution in value. they must ―diligently pursue the claim‖ i. Title insurance company pays lawyer—lawyer really represents the insured. prohibits people from requiring buyers to have to buy title insurance and says can buy title insurance from whomever buyer pleases. poa. Mortgage obligation is finalized iii. To eliminate kickbacks and referrals that unnecessarily increase the costs of certain settlement services. HUD1 Settlement Statement: closing statement has to be standardized. 1-4 residential property 2. Regulates mortgages i. Title insurance requirements are met c. surveyor. first passed in 1974. Owner/lender must cooperate with insurance co and insured needs to fess up with actual knowledge at the time of purchase.
we’ll save you. including the following factors: Statements of the parties Presence of a substantial disparity between the value received by the grantor and the fair market value of the property The fact that grantor continued to pay real estate taxes The fact that grantor made post-conveyance improvements to the real estate The nature of the parties and their relationship prior to and after the conveyance. Verify satisfaction of mortgages paid at closing vi. Te 2nd mortgage was delinquent and a foreclosure was imminent. in the inceptin of the instrument. after a default is preserved. P argues mortgage loan agreement and acting as security for loan.iv. ii. call us. iii. The absolute deed intended as security: i. the equitable right of redemption. remains in full force. e. and should therefore be deemed a mortgage. an agreement allowing the mortgagee to keep any part of the mortgaged property. Send seller’s 1099-S form to IRS
IV. D got deed/title. ii. Value of the house is 94k/68k equity. P still living in the house. in any way deprive himself of his equitable right to come in after a default in paying the money at the stipulated time. Uses factors to get to that charcterization. Nor is the mortgagee allowed at the time of the loan to enter into an option or contract for the purchase of the mortgaged property. iv. Right of Redemption: The debtor or mortgagor cannot. as a part of or collateral to its execution. Perry v. (parol evidence it admissible in these cases): Factors: i. P doesn’t repurchase. there was a relatively low amt of consideration pd for the warranty deed.
. The Use of Mortgage Substitutes
a. By a parity of reasoning. and will be protected and enforced by a court of equity. P got 11k. we have judicial foreclosure (strict foreclosure) and the right of redemption stops at foreclosure sale unless judgment gives a different date (usually before sale). c. d. Parol evidence is admissible to estb that a deed purporting to be an absolute conveyance of real estate was intended to serve as security for an obligation. THE USE OF MORTGAGE SUBSTITUTES 1. no matter what stipulations the parties may have made in the original transaction purporting to cut off this right. Court recharacterizes deed as mortgage. Queen: the plaintiff was the owner of a property with a 2nd mortgage. P was not well-educated. In Florida. P was then renting house with option to ―repurchase‖ after a year for $. D tries to kick out. P retained physical possession. Update title search to include recorded deed and mortgage (and check it’s recorded) and then issue title insurance policies v. b. Intent must be proven by clear and convincing evidence. It is a statutory right of redemption—the equitable right is limited by statute. P did not have access to legal advice at the time the deal was executed. redemption being limited to the balance. saying. fails. and to pay the debt and interest and thereby to redeem the land from the encumbrance of the mortgage. Such intent may be inferred from the totality of the circumstances. P got letter in the mail.
they give him 30k. but from her default under the real estate contract for failure to make a timely payment. Bank wants deficiency payment against owner. d. Vendors view as pro-vendor c. Sebastien v. but bank couldn’t pursue deficiency against drs bc deed really a mortgage. GM does nothing to terminate K. P can repay 30k with a fee (conditional repurchase agreement). when finished paying. GD sent GM $250 to restart payments. should get restitution of excess. and to retain all payments nder the contract as liquidated damages. look at all the good things I’ve done. Russell’s loss of her interest under the contract did not result from a wrong committed by the Richardses. sells granddaughter 6 acres at $50/month. to retake possession of the premises. Drs are owners of property as per deed. Buyer didn't make required payments.5%. but drs say no. The usual consequence of default. but not enough to pay mortgage. GD stopped paying. amy sue (1) for the installments which are due with interest thereon (2) for specific performance of the contract (3) for damages (4) to foreclose his vendee’s rights (5) to quiet title (6) or he may rescind the contract. D lost property to foreclosure. D is a construction guy with 30k debt and can’t pay. The clause typically will provide that ―time is of the essence‖ adnd that when a vendee defaults under the contract. The Installment Land Contract
a. no process. is forfeiture of all interests. When a vendee under an installment land contract defaults. Hartell: Grandma has 160 acres. Buyer had installment K of 11k at 8. Peterson v. legal title to the property remains in the
. Drs won. Ct says GD can give full performance or GD can get restitution for value seller got for payments and property. under traditional remedies. Richards: long term land contract. does buyer still get remedy? GM has security interest (like mortgage). Floyd: (most like Florida): issue: whether a clause in an installment land sale contract providing for forfeiture of the buyer’s payments upon the buyer’s default may be enforced by the seller. but for 21/2 years totally stopped paying. Drs show that even though there is a deed. Downs v. the vendor. get deed. Buyer raises defenses: exceptions to statute. Ziegler P wants to foreclose. the vendor has the option to declare the contract terminated. K terminated. GD should be given opp to pay (reas amt of time) or if can’t pay. Russell v.400 (40% of purchase price). b. Most vendors rely on the forfeiture clause which is contained in virtually every installment land contract. it’s really a mortgage. When a typical installment contract is used as the means of financing the purchase of property. only unusual equitable circumstances create an exception to that rule. we aren’t ―real‖ owners the deed was really a mortgage. CT held buyer responsible for term of K and forfeit rights at point of default. GM collected payments after past default and never went back. paid $5. Issue: If buyer intentionally defaults. i. banker/bro lost. He gives drs title. GD made 58of first 65 payments. e. Ct holds forfeiture cannot be enforced. No remedies in K.f.
2. D didn’t repay—bank foreclosed. Banker calles his brother (a Dr) and gets 3 doctors to help guy out. as clearly stated in the contract assumed by Russell. GM sent back and said no thank you. terminate instantly. right of lender in New Mexico to repossess.
ii. 502. You get privately owned waterbodies in three ways: i. it is not always so. but could also include waterbodies created by sinkholes. as well as to the nature of the soil itself. It is coordinate with the limit of the bed of the water.” Tilden v. -. However. The seller holds nothing but bare legal title as security for the payment of the purchase prce. 708. Mean High Water is generally the boundary between public and private ownership on tidally influenced waters. what rights (if any) they may have to use that waterbody. Waterfront Boundaries Move. ii. 113 So. at which time. Fla. These are generally artificial.
IV. d. Because the waterbody is too small to be “navigable” which unfortunately is a standard that changes depending on the political moods in Tallahassee. 712 (1927). the seller tenders a deed to the buyer. While that is generally the case. Smith. 94 Fla. It is computed very differently as the average a height of the high waters over a 19 year period. we must be able to explain to our clients.a water mark. or iii. It Moves from time to time and therefore can never be pinned down to a specific point in a survey. Stat. Those are defined as i. equitable title passes to the buyer when the contract is entered. Because the waterbody was created after Statehood. High water mark means what its language imports. Land sales contracts are treated just like conventional mortgages. The Ordinary High Water Line (OHWL) “as a line between a riparian owner and the public is to be determined by examining the bed and the banks and ascertaining where the presence and action of the water are so common and usual and so long continued in all ordinary years as to mark upon the soil of the bed a character distinct from that of the banks in respect to vegetation. The Boundary between public and private ownership on a waterbody is legally defined as either the Ordinary High Water Line (if non-tidal) or the Mean High Water Line (if Tidal). The boundary along water frontage is ambulatory. and that only is to be considered the bed which the water occupies sufficiently long and continuously to wrest it from vegetation and to destroy its value for agricultural purposes.seller until the buyer has paid the entire contract price or some agreed-upon portion thereof. If a waterbody is privately owned. This becomes a key point later in our discussions because it affects the way in which a waterfront
. We generally think in terms of all waterbodies being publicly owned. c.27 (14). The Boundary is Legally Defined. Not all Waterbodies are Public. Riparian Rights and Water Front Property
a. §177. Who owns what? What rights do I have to use the water? What are the regulatory restrictions? What are the non-record transactions that affect the water on my property? b. Because the state has already sold them or somehow relinquished its interest. Other stuff 1.
or lake. 1845 (the date of statehood). Riparian and littoral rights are common law rights and. They only apply when the state owns the waterbody. Owner Has Certain Rights in the Waterbody. Each move the boundary between public and private ownership EXCEPT AVULSIVE! i. littoral rights are those appurtenant to lands fronting on an ocean. Riparian vs. f.2d 13 (Fla. the lands under that waterbody are Sovereignty Lands and ownership passed to the State by virtue of it becoming a state (the Equal Footing Doctrine). Include Use Rights. Reliction – the gradual lowering of the water to expose the land and other gradual and imperceptible changes iv. ii. g. Riparian and littoral property rights consist not only of the right to use the water shared by the public. and (4) the right to receive accretions and relictions to the property. Inc. for constitutional purposes. Accretion -.do not change the boundary between public and private ownership. they constitute “property. j. (2) the right to use the water for navigational purposes.” h. Avulsive – sudden. Examples of this would be a hurricane cutting a new pass.. the statutory definition is likely to be casually followed and is not a bad restatement of the common law. the statutory definition cannot constitutionally modify. e. ii. The dividing line between public and private ownership of lands adjacent to state-owned waterbodies is the OHWL.Riparian And Littoral Rights. or restrict those rights granted at common law. 1976). Nonetheless. 338 So. (but see Stop the Beach Renourishment) i. including the right to have the property's contact with the water remain intact. sea. Littoral. they are so similar that they are referred to almost interchangeably -. If a given waterbody was navigable on March 3. not current navigability. Erosion -. Riparian rights attach to lands fronting on a river or stream. Because riparian and littoral rights are common law creations that vested in the upland owner long before the adoption of the statutory definition in 1953. Governing Legal Doctrines after Coastal: After Coastal there are basically five legal doctrines relevant to a Sovereignty Lands determination: They are: i.the gradual building up of the land. State v. Vested Common Law Rights. The main body of Florida case law addressing the issue. although similar rights have been found in shared private waterbodies.property must be described. Can’t be Statutorily Modified. or any change in the waterfront involving heavy equipment. perceptible changes or artificial changes -. iii. or changing the route of a river. Note that the test is navigability when Florida became a state. There are two types of rights to waterfront property. and although technically different. states "[t]he ordinary high water line (OHWL) is described as 'the point up to which the presence and action of the water is so
. Florida National Properties. limit. (3) the right to an unobstructed view of the water. but include the following vested rights: (1) the right of access to the water.the gradual washing away of the land.
imperceptible.'" iii. There is a rebuttable presumption that waterbodies which were meandered in the original U. Gradual.27(14) defined as the average height of the high waters over 19 year period m. accretion.S. natural change moves the boundary line (erosion. is not an absolute rule. it automatically received title to navigable water and all tidally influenced water ―sovereign lands = lands that are under water‖ passed under ―equal footing doctrine‖—the test is where was the water in 1845. i. (non record transfer) ii. Thus. v. Receive accretions and relictions n. that unmeandered waterbodies were not. government surveys were "navigable" and. reliction) v. draw lines that approximate shoreline. Tidal and navigable waters i. Beach restoration: classic avulsion change (doesn't change boundary line if avulsive). clearly established the strength of these presumptions.e. Freshwater: ordinary high water line (OHWL). the line of demarcation between public and private ownership adjusts to correspond to the then existing OHWL. 1845 when Florida became a state. natural processes (accretion. to my knowledge. This was the express holding of Coastal. avulsive changes do not change this line of demarcation and. a significant gap may develop between the water-line and the public-private boundary. but may be challenged in court. Smith ii. however. iv. This. fixes boundary between upland and sovereign owner
. Changes in the OHWL resulting from slow. Tilden v. reliction and erosion) change the dividing line between public and private ownership. Access ii. establish erosion control line before restoration. iv. conversely. When surveying ―meander‖ bodies of water that are navigable. Use iii. The courts have not. Waterfront owner has riparian (river or stream) rights or littoral (lakes) i. On the other hand. Manmade or sudden changes don’t change boundary lines (avulsion) l.continuous as to destroy the value of the land for agricultural purposes by preventing the growth of vegetation. The state does not lose title to any Sovereignty Lands through the application of the Marketable Record Title Act. Fresh water have different boundary tests i. over time. Avulsive changes resulting from sudden or artificial changes affecting the OHWL do not affect the boundary between state and private ownership. Unobstructed view iv. the doctrine of contemporaneous determination or the doctrine of legal estoppel. Mean high water boundary is mathematically certain and 177. as the natural movement of waters build up or erode lands along one side of a waterbody. Swamp and Overflow land Act: over 20 million acres of swamp and overflow land conveyed to Florida by US Patent iii. k.
Farmer says his land is from the Spanish land grant. Marketable Record Title Act is inapplicable to sovereign lands (have to go back to 1845). so no sovereign land. COA by magic of law. says Spanish govt owns navigable waters and didn’t convey them away. so COA read in gratn and said his property always didn’t include lake. are you on government or private property? a. A: is it restored beach or non-restored beach? i. TC so the land was never deeded to the state. Review of case: farmer owns SE ¼ of a section with a lake—deed says farmer owns out into lake. then on private property up to high tide line.
Remedies Loss of Bargain Damages
. Farmer farming muck from lake and selling it. If you are on Destin’s beach. then on public property up to the line deemed private. p. State says they own lake and ask farmer to stop. If non-restored. it’s the farmers. if on restored beach.o. Potential exam questions: 1. IV.
Cts consider if parties entered into K freely. airfare to negotiate. willing and able SP may be denied when: It would produce unjust results. etc buyer would have paid and any interest buyer made on money still had that would have used to buy house) Buyer’s damages are limited to restitutionary recovery when the seller’s title is defective but the seller has acted in good faith Loss of bargain damages only available to the buyer when the property’s value is higher than the contract price When contract makes buyer’s sole remedy termination and refund of deposit. Liquidated Damages Seller may retain deposit as liquidated damages Specific Performance Even if party gets specific performance. SELLER Compensatory: carrying cost of property until resold. attorneys’ fees. Loss must be reasonably certain consequence of the breach. then seller’s obligations are illusory and Florida courts won’t have it. property has to be unique. the buyer may obtain SP with an abatement of the price. Both SP and other remedies may be denied if there are K conditions which have not been fulfilled or if the P is in substantial breach. BUYER Is usually entitled to refund of dep + interest on dep + costs and expenses incurred in connection with proposed sale + any improvements made on prop Expenses for title search. K is excessively vague. bearing some relationship to the damage which might have been sustained actual damages may be uncertain and difficult to prove
. Difference between the K price and the mkt value on the date of the breach Compensatory Damages Put injured party in as good of a position as he would have been if performance had been rendered. survey. If purchaser was buying land for immediate resale at a profit. buyer had to be ready. loss of particularly favorable financing (offset by any money saved on interest/taxes. Fla cts enforce up to 15% 3 elements that must be validated to enforce damages clause: parties intended to agree in advance to the settlement of damages that might arise from breach amount of liquidated damages was reasonable. If the seller does not own all the property covered by the K. then uniqueness doesn’t fly. If vendor has resold to another purchaser who had no knowledge of the prior K. interest income seller expected to earn on purchase price. increasing tax liability as a result in law change Liquidated damages: seller may retain the dep. cost of second broker’s commission. rent at present location. interest on existing mortgage. although the exact amount need not be certain. can still get compensatory damages SP is a matter of sound judicial discretion.
If the clause does discuss other damages.
If liquidated damages clause does not address the issue of other damages.
. some cts see this as a penalty and reject. but not actual damages. the usual rule is that seller may seek specific performance.