Contracts for Sale

Question 1

Real Property contracts for sale require?

5

Answer 1

Statute of Frauds

1. writing
2. Description of the property
3. names of the parties
4. price
5. signed by the party to be charged against

Question 2

What is the part performance exception to land-sale contracts?

Answer 2

Exception to the writing requirement

• change in possession
• exchange of funds
• improvements made to the property

Does NOT apply in NC* All you can do is get your money back

Question 3

N.C. exception to statute of frauds for land contracts?

Answer 3

none, has to be in writing

Question 4

N.C. marketable title act provides

Answer 4

Presumption that marketable title will be given at closing

Question 5

Duty to disclose defects in land sells in N.C.

2

Answer 5

• can sell “as is,” then none
• unless buyer agrees to buy property “as is,” the seller must make a full and fair disclosure about the facts that would be material to the buyer

Question 6

What is the Implied Warranty of Workmanlike Construction

Answer 6

With respect to purchasers from a builder of new homes “new property”

Held to a duty of workmanlike construction

Question 7

How is equitable conversion applied in N.C.?

Answer 7

Common Law: Once a land sale contract is signed, the buyer holds equitable title and bears the risk of loss

N.C. follows Uniform Vendor and Purchaser Risk Act

• Postpones passage of risk of loss when
  1. Legal title passes at closing; or,
  2. Possession passes

Question 8

When does risk of loss pass in land sale contracts in N.C.?

Answer 8

N.C. follows Uniform Vendor and Purchaser Risk Act

• Postpones passage of risk of loss when
  1. Legal title passes at closing; or,
  2. Possession passes

Question 9

Merger Doctrine in N.C.

Answer 9

The contract merges into the deed at the closing –> can only sue on the title (no longer the contract)

Question 10

Covenants of Title in a General warranty Deed

Answer 10

1. warranty of seisin: right to possess
2. right to convey
3. no encumbrances on the property (easement/covenant/mortgage) not shown in the deed
4. Warranty: seller will do whatever is necessary to protect the buyer (if title challenged by 3rd party)

Question 11

What is a quit claim deed?

Answer 11

When seller conveys whatever interest they have in the property –> no warranties

Question 12

N.C. rule for deed delivery in escrow (seller gives to purchaser to hold until they pay)

Answer 12

Can give to the purchaser to hold until they pay and will not be conveyed until whatever is intended has manifested