Real Property – Essay 1

(1) Issue – The issue presented here is whether Byer will breach the contract if he does not
tender payment under September 8th.

Rule – A breach of a contract occurs when one party in a binding agreement fails to deliver
according to the terms of the agreement.

Analysis

Sub Conclusion – Byer and Owens did not have a binding agreement in the first place,
and therefore Byer will not breach the contract if he does not tender payment under September
8th.
Sub Rule – A written contract must include the requirements of statute of frauds to be
valid. The elements to be enforceable include: (1) Identity of the parties, (2) Description of the
property, (3) Sales price, and (4) Signature of the party to be bound.
Sub Analysis – Here, the contract is not binding because the land description was
extremely vague. While boundary lines can be marked by systems including metes and bounds
descriptions, some of the descriptors used here are ambiguous or could become ambiguous. The
land was described as follows: The parcel known as Homearce, beginning at the large boulder
located at the Northwest corner of the property, then East along Main Street to the edge of the
Babbling Brook, then South along Babbling Brook to the oak tree, then West to the maple tree,
then North to the point of the beginning, consisting of 4.3 acres. The use of Main Street and
Babbling Brook were sufficient descriptive landmarks, but the use of the boulder and the trees
create vague descriptions for a deed to properly record the acres of the property. So much so that
the description using the boulder, Babbling Brook, and the two trees actually only yields 4.1
acres, while the deed recorded 4.3 acres.
Sub Conclusion – The ambiguity of the written contract created cause for not meeting the
statute of frauds.

Conclusion – When a written contract does not meet the statute of frauds, it is unenforceable.

(2) Issue – The issue presented here is how many acres the deed will convey.

Rule – When there is a mistake in the deed, the action taken depends on whether or not a fixing it
would materially change the deed.

Analysis

Sub Conclusion – The deed will convey 4.1 acres, since that is what the current deed
conveys.
Sub Rule – If a change would simply tighten up ambiguous language in the legal
description, it is permitted. But if a change would be material to the description of the property it
cannot be corrected as easily. To create and record a correction deed, the preparer should obtain
a copy of the current deed, and take the following steps: (1) Obtain your correction deed form;
(2) Execute the correction deed; (3) Record the correction deed.
 Sub Analysis – Here, the correction can be made to reflect 4.1 acres by keeping the
description the same. This is not a material change to the description of the property but a
correct calculation of the acreage.
Sub Conclusion – The deed must be changed to reflect the proper acreage of 4.1.

Conclusion – Byer will be purchasing a property that is 4.1 acres large.

(3) Issue – The issue presented here is whether Byer has a cause of action against Owens
for unmarketable title?

Rule – A marketable title to real estate is one that is free from reasonable doubt and does not
expose the party holding it to the hazard of litigation.

Analysis

Sub Conclusion – Byer does have a cause of action against Owens for unmarketable title.
Sub Rule – There are three types of deeds: (1) general warranty deed, (2) special
warranty deed; (3) quitclaim deed. A general warranty deed offers the maximum amount of
protection because the grantor warrants against all defects in the title, whether or not they arose
during the grantor’s period of ownership. A special warranty deed is less favorable to buyers
because it warrants only what the grantor personally did not cause or create. A quitclaim deed is
the least favorable because it contains not warranties of title.
Sub Analysis – Here, the contract between Byer and Owens provided that the seller
would convey good and marketable title, free and clear of all liens and encumbrances. Many
courts would hold that violations of building, housing, or zoning codes do not constitute
encumbrances that breach the deed warranty. Most jurisdictions would find that an encumbrance
breaches the covenant, even if the encumbrance was recorded in the public records at the time
the deed was delivered. Here, the property being subject to a mortgage, held by National Bank,
in the amount of $50,000 makes this title unmarketable. The zoning law does not render the title
unmarketable because it is only in existence. If the zoning ordinance was in violation of the
restrictions imposed then it would render the title unmarketable. Byers receive protection against
mortgages, because this marketable title provision included liens and encumbrances, and a
mortgage is a type of encumbrance.
Sub Conclusion – Byer can sue Owens for unmarketable title.

Conclusion – Byer has a cause of action for unmarketable title against Owens because he
warranted that there were no encumbrances tied to the title.