(3) Property: Ownership Flashcards
Adverse Possession
Adverse possession allows someone in possession of land owned by another to acquire title to the land when the possession of the property is (1) continuous for the statutory period (usually 10 years) – seasonal use will be deemed continuous if a reasonable owner would use the property that was (i.e., vacation home); (2) open and notorious; (3) exclusive; (4) actual; AND (5) hostile and under a claim of right.
*(2) possession such that a true owner would be put on notice of the adverse possession upon inspection of the land
*(5) possess the property without the true owners consent
Aggregation/Tacking
Adverse Possession
Adverse possessors in privity may aggregate their years spent possessing the property to meet the statutory period. There can be no gaps in between possession. Privity exists when the land is voluntarily transferred to another (i.e., by deed or will).
Is tacking allowed when there is ouster?
Adverse Possession
NO, tacking is not allowed when there is a wrongful exclusion of a party entitled to possession (ouster)
Will the statute of limitations run against an owner with a disability?
Adverse Possession
The statute of limitations will not run against an owner with a disability (insanity, infancy, imprisonment) ONLY IF the owner had the disability at the start of the adverse possession.
Requirements for a valid Sale of Land Contract
Land Contract
A valid sale of land contract must meet the requirements of a contract (offer, acceptance, and consideration) and satisfy the statute of frauds. Thus the contract must be (1) in writing; (2) signed by the party to be charged; (3) describing the property; (4) identifying the parties; and (5) contain the purchase price.
Exceptions to Statute of Frauds
Land Contract
(1) Part Performance – specific performance may be sought when 2 out of the following 3 are had (a) payment of all or part of the purchase price, (b) possession by the purchaser, or (c) substantial improvement of the property by the purchaser;
(2) Full Performance – a party to an oral contract can enforce the other party’s oral promise unless the promise itself is the transfer of real property;
(3) Detrimental Reliance – party seeking performance reasonably relied on the contract and would suffer hardship if specific performance wasn’t permitted;
(4) Judicial Admission – a party may enforce an oral contract when the other party admits to its existence.
Merger Doctrine
Land Contract
Once a deed to the property is delivered and accepted the sale of land contract merges with the deed and the rights to sue under the contract are extinguished.
*The buyer may sue upon the deed.
Definition & Rule:
Warranty of Marketable Title
Land Contract
Definition: A marketable title is title that is free from any adverse claim and does not contain a substantial defect such as (1) defects in the record chain of title; (2) encumbrances such as mortgages, liens, restrictive covenants, easements, claim of adverse possession, zoning violations.
Rule: A seller has a duty to convey marketable title to a buyer at closing. A buyer may withdraw from the contract if the seller cannot convey marketable title at closing. The buyer may waive this warranty.
Implied Warranty of Fitness or Suitability
Land Contract
This warranty is implied in new construction. In some jurisdictions the warranty covers latent construction defects that will not manifest until after the sale. In other jurisdictions the warranty covers defects that significantly affect the ability of the buyer to live in the residence. Some jurisdictions recognize both.
When can a suit for Implied Warranty of Fitness or Suitability be brought?
Land Contract - Implied Warranty of Fitness or Suitability
The suit for breach must be brought within a reasonable time for the defect.
How are damages calculated for an Implied Warranty of Fitness or Suitability claim?
Land Contract - Implied Warranty of Fitness or Suitability
Damages are based on the cost of repairs to bring the residence into compliance with the warranty but if the defect cannot be corrected without substantial damage to the residence then it is based on the difference in property value with and without the defect.
Can an Implied Warranty of Fitness or Suitability be disclaimed?
Land Contract - Implied Warranty of Fitness or Suitability
YES, the implied warranty may be disclaimed but not by using a general disclaimer (e.g., “property sold as is”).
Rule & Remedies violated party can take:
Duty to Disclose
Land Contract
A seller has a duty to disclose all known material physical defects to the buyer. The defects must not be readily observable (latent) or known to the buyer. To be material the defect must substantially affect the value of the residence, the health or safety of a residence or the desirability of the residence.
*The buyer may rescind or seek damages if the seller fails this duty.
Revocation of a Sale of Land Contract
Land Contract
In a sale of land contract a seller may not revoke once the contract is signed. When the land is conveyed through a deed the seller may only revoke before the deed is effectively delivered.
*If delivery of the deed is conditional – courts are split.
Valid Deed Requirements
A valid deed must (1) be in writing; (2) signed by the grantor; (3) identify the grantor and grantee; (4) describe the property (the description must be reasonable definite); AND (5) indicate the grantor’s present intent to convey the land. Plus grantee’s acceptance which is presumed unless the grantee specifically indicates intent not to accept the conveyance.
