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The Land transaction (Merchantable title=presumed marketable title) a. Brokers: i. Brokers have a fiduciary duty and cannot act on behalf of their own interest instead of their clients (Licari v. Blackwelder; Bought & Resold) b. The contract of sale: i. The statute of Frauds: Except for leases under 3 years, no interest in land can be created or transferred unless it¶s in writing. 1. 2 Exceptions to the SOF (Where specific performance granted) a. Part Performance: allows the specific enforcement of an oral agreement when particular acts have been performed by one of the parties to the agreement. 2 theories argue both ways: (Hickey v. Green; 16,000) i. Unequivocal Reference to a contract: acts done by parties that make sense only as having been done pursuant to a contract. 1. Ex: Clear oral promise, partial payment, ii. Reasonable Reliance: An act made in reliance that will be inequitable to deny specific performance. b. Estoppel: Applies when an unconscionable jury would result from denying enforcement of the oral contract after one party has been induced by the other seriously to change his position for the worst un reliance on the contract. ii. Marketable title: One which is free from reasonable doubt and title is doubtful and unmarketable if it exposes the party holding it to the hazard of litigation. 1. 2 different encumbrances on title (Lohmeyer v. Bower; one story) a. Zoning Restriction (Municipal): The existence of such does not make the title unmarketable, thus the buyer cannot rescind the contract. Only a violation of the restriction makes the title unmarketable. b. Restrictive Covenants (Private Party): The existence makes the title unmarketable, thus the buyer can rescind a contract without there being a violation. i. If the parties contracts differently than the buyer may not rescind unless there is a violation. iii. Equitable conversion: Used to determine who has title of the property during the period of time between the contract and closing if something is destroyed. 1. 2 different approaches a. Burden on the buyer (he prefers)
Can have both special damages and punitive damages. fucked up garage) a. Retention of the deposit (seller) & Restitution of the deposit (buyer) c. Remedies for the breach of sale contract: NOT TESTED ON 1. Caveat Emptor: ³Let the buyer beware´. Damages i. the seller is under a duty to disclose. iv.b. Specific performance of the contract: Only really granted to buyer not seller. Ackle) b. Burden on the seller 2. Implied Warranty Quality: 1. . Where the seller knows of facts materially affecting the property value which are not readily observable and not known to the buyer. Exceptions to Caveat Emptor: Only applies to latent defects (Hidden/ Non Obvious) not Patent Defects (Obvious). Ex: Seller did not disclose leaking roof. Ex: B/c seller created condition estopped from denying ghost from buyer of different city. 3 Allowed a. (Where the 1) Seller knew of a problem & 2)Buyer through ordinary diligence could not discover the problem). i. vi. 2. Inheritance: if one dies before closing the sellers interest is personal property and buyer is treated as owner of land. Dagenais. (Johnson v. i. Privity of K is not necessary for an implied warranty of workmanlike quality against a builder for latent defects which cause economic loss. b. Seller had Duty to disclose but was even more fucked b/c affirmatively represented that the roof was good. CL need privity and property damage/personal injury(economic loss not allowed). Davis) v. The Duty to Disclose Defects: 1. (Stambovsky v. Where a seller creates a condition that materially impairs a contract¶s value and is peculiarly within the knowledge of the seller or unlikely to be discovered by a prudent buyer exercising due care. a. (Lempke v. non disclosure creates a basis for rescission as a matter of equity.
minus the contract price. Lee. In General 1. Loss of the bargain rule: Puts the injured party in the position it would have been if contract was performed. Essential Elements of a deed (MEMORIZE) a. K merges into deed so unless in deed can lose rights from K. Down payment a. Signature of the grantor: i. Grantor b. e. 3. 3. Description of the land involved: A deed must contain a description of the parcel of land conveyed that locates hte parcel by describing its boundaries. The Deed: i.2. Fraud: A fraudulently procured deed is voidable by the grantor in an action against the grantee. The grantor whose signature is forged to a deed prevails over all persons. a. Natural or artificial monuments. CL (majority): Where the buyer gives a down payment and doesn¶t fulfill the K without lawful excuse he cannot recover the payment. b. but a . Grantee c. Pirnie. Street name & number or Name of property. 4. Ways to do so include: i. 2. partial down payment returned) c. Modern view: Measure of damage is the difference between the purchase price and the market value of the property at the time of the breach. Forged a forged deed is automatically void. Jones v. ii. CL View: buyer¶s damages upon breach by seller is also based on value of property at time of breach. Words of Grant d. (Kutzin v. including subsequent bona fide purchasers from the grantee who do not know deed is forged. Minority: If buyer breaches he can recover the payment minus the damages to the seller as a result of the breach. Calculating damages) b. You do not have to record a deed and doing so does not guarantee good title. Survey. Remote Grantor: Remote refers to time not distance.
Present Covenants (3 of them): a. H&G could not sue Dixon based on special warranty deed given (Rockafellor).grantor warrants that he has the right to convey the property. Bower. Ordinary. If not breached when deed delivered cannot ever be sued upon. usual regular. i. f. Quitclaim Deed: contains no warranties of any kind. i. i.grantor warrants that he owns the estate that he purports to convey. Ex: H&G bought from Dixon. ii. If breached grantee no longer has a covenant but instead a cause of action for breach of the covenant. Either grantor owns property at that time or not c. Covenant of seisin . b. Covenant against encumbrances: grantor warrants that there are no encumbrances on the property. 2. d. was able to sue Connelly (who originally gave Dixon general warranty deed) under covenant of seisin. Special Warranty Deed: Contains warranties only against the grantor's own acts but not the acts of others. a. 3 types of Deeds: 1. (Tie in with Lohmeyer v. Encumbrances include: 1. liens.subsequent BFP from the grantee who is unaware of the fraud prevails over the grantor. Covenant of right to convey . General warranty deed: Warrants title against all defects in title. Covenants & Restrictions). 6 express warranties found in General Warranty (MEMORIZE) 1. Protects grantee against superior claims of title from anyone in the past. whether they arose before or after the grantor took title. ii. ii. In General: SOL runs when the land is conveyed (deed delivered). iii. CL Majority: Chose in action (cause of action) cannot be transferred to new owner. Modern Minority: The chose in action can be transferred to the new owner. Mortgages. 1. and covenants. Either existing encumbrances at that time or not. easements. Different words to identify GWD i. 3. Leaves yourself most vulnerable to claim b. Sometimes: Attestation or acknowledgment. .
In General: SOL begins at the time of eviction or when the covenant is broken in the future.iii. Covenant of quiet enjoyment . Can be the Grantors declaration. or is otherwise damaged. such as defending against claims of 3rd parties or compensating the grantee for loss by virtue of failure of title. b. iv. d. i. Def: An act that shows intent to be bound by the transfer. express or implied that he is bound by the deed. 2. building codes. ii. Latent Public Land violations (such as zoning ordinances.grantor promises that he will execute any other documents required to perfect the title conveyed. Ex: Recording. Covenant of general warranty . Promises that the grantor will do some future act. c. notarizing. Act: Deed does not have to be handed over to the grantee. Covenant of further assurances .grantor warrants that the grantee will not be disturbed in possession and enjoyment of the property by assertion of superior title. (Brown v. Delivery: 1. buys up the paramount claim. Ex: P had only received 1/3 mineral rights but b/c covenantee has not been prevented from enjoying their possession not breach of CQE. etc« 2.grantor warrants that he will defend against lawful claims and will compensate the grantee for any loss that the grantee may sustain by assertion of superior title i. a. 1. statutes gov¶t regulations). Encumbrances don¶t include: 1. Not breached until the grantee or his successor is constructively evicted (right of possession is interfered with) from the property. placing in safe deposit box (most common). Future Covenants (3 of them): a. i. Lober). (Intent can be defeated if delivery is invalid). Delivery without handing over: .
Other courts hold that no 3rd party is necessary. there has been delivery even though possession may be postponed until grantor¶s death. i. no delivery during life has taken place. 3. At CL the mortgage conveyed titled. In NY a mortgage merely creates a lien rather than conveying title 7. b. Mortgage: Borrower 2 O¶s = mortgagor. it can frequently avoid foreclosure by tendering its deed to the lender in lieu of foreclosure 5. Conditional Delivery. Ex of delayed delivery (Rosengrant v. Continuing to live on prop. 1. deed cannot take effect at death b/c grantor intended it to be a will. the parties occupy the position of mortgagor and mortgagee at common law. Walker) 6. Sweeney.a. Rosengrant. farming. Deeds in lieu of foreclosure: In instances where a borrower cannot repay its debt. Mortgagors interest in the property is called equity 2. Lender 2 e¶s= mortgagee.( Bean v. and it was to protect the buyer from summary ejectment that Courts or Equity evolved the concept of equitable title as distinct from legal title. ii. b. If a grantor delivers a deed while reserving a right of retrieval 2. Right of redemption: If you have a house in foreclosure if you can come up with the arrears you can buy the house back. Prior to sale: Injunction b. In General: 1. Borrowers remedies if foreclosure defective: a. After sale: Rescission 4. Bank had deed transfer to Nephew). not a deed. If grantor intends to pass title/future interest to grantee NOW. If grantor intends no interest should arise until death. 2 different views (Sweeney v. Traded deeds & estranged wife): a. Good Faith & due diligence requirement of the Mortgagee . Where the sale of real property is evidenced by contract only and the purchase price has not been paid and is not to be paid until some future date in accordance with the terms of the agreement. i. 3. d. paying taxes. Deliveries can only be conditional if the grantor delivers the deed into the hands of a 3rd party who holds the deed until the condition occurs.
Some jurisdictions refuse to enforce the forfeiture provision of a land contract if the proportion of the purchase price paid is so substantial that the amount forfeited would be an invalid penalty. When a vendee under a land sale contract has acquired an interest in the property of such a nature that it must be extinguished before the vendor may resume possession. iii. The vendor may not enforce his rights by an action of ejectment but must proceed to foreclose the vendee¶s equitable title or bring an action at law for the purchase price. Purpose of Recording: To give notice to potential buyers (sp they know owner actually owns interest). EX: Lenders at foreclosure sale buy house for 27k when they knew house was worth at least 46k from last appraisal. Due Diligence: Whether the reasonable person in the lenders place would have adjourned the sale. Walker: 1. notices in newspapers (ensure the public knows). Must go back to a root of title when searching. .II. Then you use grantor index to make sure that the title has not been conveyed. No rule but ct says need to make an effort to provide notice (look to custom of locality). a. 2. If buying house want to check grantee index to see whom he bought it from. 2 Kinds of indexes: a. a. (Murphy v. Upon the execution of a contract for sale of land. 3. The Recording System: i. Bean v. Owners owed at least 19k in equity. Financial Dev. The vendor holds the legal title in trust for the vendee and has an equitable lien for the payment of the purchase price. What would have changed this: Use brokers. Title Assurance: a. the vendee acquires equitable title. Grantor: b. Ex: Fraud 2. Good Faith: There must be an intentional disregard of duty or a purpose to injure for their to be bad faith a. Corp. Grantee: i. 2. 1. In General: 1.) i.
i. Purchasers Duty to Notice: i. If no title search is done. Notice: gilbert Section 1793 c. So. Bona fide Purchaser: Must act in good faith in order to gain protection of the statute. Ex: O sells to A then latter on to B. 2. A gets b/c first in time 3. a. ct will hold that you had constructive notice. Specific Description land being conveyed must be described with specific specificity in order to give constrictive notice to a purchaser. ii. Recoding Rule: If you have not recorded your deed your deed you cannot claim protection by recording system.ii. and is insufficient to give constructive notice to subsequent purchasers UNLESS they have actual knowledge of the transfer. Race: i. b. Mother Hubbard Clauses: Instrument in writing that conveys an interest in property and describes the property as ³all if the grantors property in a certain county´ It sweeps in property not specifically described. even though no notice. Mother Hubard Clause: Since only generally describes the property it is only valid between the parties to the instrument. 4. 3 Types of Recording Statutes (only 2 states follow race others are split) a. . A purchaser who has actual notice is not a bona fide purchaser. Race Notice: d. ii. if buyer does no search cannot claim the protection of the recording system. a. Effective way of using Mother Hubbard Clause: File generally then later on add specificity to the recording. Protections of Recording System: 1. At CL 1st in time=1st in right i.
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