Conveyancing

Question 1

The statute of frauds applies to conveyances of land which means the following are required

Answer 1

That the contract be in writing and contain the signature of the party to be charged and contain the essential terms. Part performance can take the contract out of the statute of frauds.

Question 2

What is the doctrine of equitable conversion?

Answer 2

Under the doctrine of equitable conversion, once a contract is signed, equity regards the buyers the owner of the REAL PROPERTY. The sellers interest is considered personal property. The legal title remains with the seller in trust for the buyer.

Question 3

Who pays of the home is destroyed before closing? (But after the contract is signed)

Answer 3

The risk of losses on the buyer, but the seller must offset the purchase price with any insurance proceeds.

Question 4

Every contract for the sale of land contains an implied covenant that the seller will provide what closing?

Answer 4

The that the seller will provide MARKETABLE title – i.e., title reasonably free from doubt. It need not be perfect title that must be free of questions that present an unreasonable risk of litigation.

Question 5

Do defects in the record chain of title make title to the land unmarketable?

Answer 5

Yes, a defect (e.g., variation in the land description and deeds, defectively executed deed, evidence that a prior grantor lacked capacity) would create a problem for marketable title.

Question 6

Can you convey marketable title if there’s a future interest in unborn or unascertained parties?

Answer 6

No.

Question 7

An easement that is beneficial, visible, or known to the buyer does not impair the marketability of title. However significant encroachments do render title unmarketable, e.g.,

Answer 7

Mortgages, liens, restrictive covenants, easements. These all render title unmarketable

Question 8

When must title be marketable to effectuate a sale?

Answer 8

At CLOSING! The seller can satisfy a mortgage or lien with the proceeds of the sale itself at closing. The buyer cannot claim title is unmarketable any time prior to that.

Question 9

What is the remedy if title is not marketable at closing?

Answer 9

The buyer must notify the seller the title is unmarketable and give him REASONABLE TIME to CURE the defects.

Question 10

Does a quit claim deed relieve the seller of the implied covenant to provide marketable title?

Answer 10

No. The seller must still provide marketable title.

Question 11

Is time of the essence in sale of real estate contracts? (By court presumption)

Answer 11

No time is not of the essence. The closing date is not absolutely binding the party late in tendering performance can enforce the contract if she tenders within REASONABLE TIME (e.g. 2 months)

Question 12

When is the implied covenant of marketability extinguished?

Answer 12

At closing. When title passes the contract is extinguished and only the covenants in the deed are at stake.

Question 13

What are the 6 possible covenants the deed for the sale of land?

Answer 13

1. Seisin
2. Right to convey
3. Encumbrances
4. Quiet enjoyment
5. Warranty
6. Further assurances

Question 14

After closing what must a buyer do?

Answer 14

Record the transfer.

Question 15

The buyer and seller have concurrent conditions to perform: what does this mean?

Answer 15

It means that if either is late in performing, there is no breach until the other party performs

Question 16

What are the remedies for failure to perform under a sales contract for real estate?

Answer 16

A seller may keep the deposited “earnest money” if the buyer defaults – this is the liquidated damages provision, which can be upheld if it was in writing in the contract.
If the seller breaches, the buyer is entitled to damages or, if the land is unique, specific performance. If the buyer wishes to proceed despite unmarketable title, she can get an abatement in price.

Question 17

When does a warranty of fitness or quality apply to a sale of real estate?

Answer 17

For new construction

Question 18

What are the 3 theories of liability for a seller who purchases a defective pre-existing building (leaky roof, flooding basement, termites)?

Answer 18

1. Misrepresentation (knowing or negligent, and reliance by buyer)
2. Active concealment (if the seller did the defects)
3. Failure to disclose (if seller knows or has reason to know, the defect is not apparent, and the defect is material)

Question 19

Is a blanket disclaimer of liability (sold as is or with all defects) sufficient to overcome sellers liability for fraud, concealment, or failure to disclose?

Answer 19

No, a blanket statement disclaiming liability is insufficient to overcome liability. However, if a disclaimer identifies SPECIFIC types of defects (e.g., defects in the roof), it will likely be upheld.

Question 20

What is title insurance?

Answer 20

It’s a policy that insures that a good record title of the property exists as of the policies date, and it promises to defend the record title if litigated – it protects only the person owns the policy and does not run with the land to the purchaser.

Question 21

A deed is valid if which of the following is left blank to be filled in by the recipient of the deed: 1. The name of the grantee, or 2. The description of the land?

Answer 21

You CANNOT leave the description of the land blank. If you leave the grantee name blank, the person taking delivery has the authority to name the grantee.

Question 22

A void deed will be set aside by the court even if the property has passed to bona fide purchaser but avoidable deed will be set aside only property has not passed to bona fide purchaser. Give examples of void deeds and voidable deeds

Answer 22

1. Void deeds include those that are forged, never delivered, or obtained by fraud in factum (grantor didn’t realize they were executing deed).
2. Voidable: executed by minors or incapacitated persons, fraud in the inducement, duress, undue influence, mistake, breach of fiduciary duty.

Question 23

If one joint tenant tries to convey property by Signing for herself, and forging the other tenants signature, what is transferred?

Answer 23

Such a conveyance is valid as to the interest of the owner who signatures genuine, but void as to the forgery.

Question 24

What is a fraudulent conveyance?

Answer 24

1. A conveyance made one with actual intent to hinder or defraud creditors, or
2. Without receiving reasonably equal in value and the debtor was insolvent or became insolvent as a result of the transfer.

Question 25

A description of land conveyed is sufficient if it provides______to the identity of the property. If it is too indefinite, however, the grantor retains title.

Answer 25

GOOD LEAD. Ambiguities can be resolved with parole evidence

Question 26

What is a reformation of deeds, and when will be allowed?

Answer 26

A deed will be reformed if it does not represent the parties agreement because of: 1. Mutual mistake, 2. Scrivener’s error, or 3. Unilateral mistakes caused by misrepresentation.

Question 27

Can a deed be effective before delivery and acceptance?

Answer 27

No, delivery and acceptance are required for effectiveness.

Question 28

May I convey my deed to a dead person? What if I do so by accident?

Answer 28

No. A deed to a dead person is void, even if the grantor is unaware of the grantee’s death.

Question 29

What constitutes delivery of the deed?

Answer 29

The grantors present IN tension to make the deed PRESENTLY effective, even if possession is postponed. It may be satisfied by delivery, notarize acknowledgment and recordation, or anything else demonstrating intent.

Question 30

If a grantee returns the deed to the grantor does that undo delivery?

Answer 30

No, delivery is a one-way street it cannot be canceled or taken back.

Question 31

May a grantor give deed to a third-party with conditional delivery? If so, when does it occur

Answer 31

Yes, conditional delivery occurs when grantor gives it to a third-party with instructions to give it to the grantee when certain conditions occur (e.g., if grantee pays purchase price before a certain date).

Question 32

When may a grantor takeback a deed given to a 3rd party that’s to be delivered to a grantee?

Answer 32

1. If the condition has not yet occurred and there is no enforceable written contract
2. Breach of escrow conditions
3. Relation back doctrine: title usually passes when the condition occurs, but if justice requires it and there is an enforceable contract convey, title may relate back to the time when the grantor gave the deed to the third-party

Question 33

When may a donor transferring real estate to a donnee upon a condition cancel the transfer? (Is it different when the condition is the grantor’s death)

Answer 33

If the condition is death, the transfer is a revocable.

If the condition is anything other death, it may be revoked unless there is an enforceable contract to convey

Question 34

What is the different between covenants for title and real covenants?

Answer 34

Real covenants are written promises to do or not do something on the land. Covenants for title are completely different, and relate to title itself.

Question 35

What are the covenants contained in a GENERAL WARRANTEE deed?

Answer 35

1. Seisin (A covenant that the grantor has the estate being conveyed – title and possession)
2. Right to convey
3. Encumbrances (A covenant against physical or title encumbrances)
4. Quiet enjoyment (A covenant that the grantee will not be disturbed by a 3rd parties lawful claim of title)
5. Warranty (Covenant to defend against reasonable claims of title by 3rd parties)
6. Further assurances (Take further steps to perfect title)

Question 36

If there are successive conveyances by general warranty deed, and the last grantee is evicted by lawful claim of title, who may he sue?

Answer 36

He may sue anyone up the line above him who conveyed via general warranty deed.

Question 37

What is a special warranty deed? It is a grant that contains by implication 2 limited assurances against acts by the grantor:

Answer 37

1. The grantor is not conveyed the same estate or interest to anyone other than the grantee
2. The DST is free from encumbrances by the grantor

Question 38

What is a quit claim deed?

Answer 38

It releases WHATEVER INTEREST the grantor has. No covenants of title are included or implied.

Question 39

What is estoppel by deed?

Answer 39

If the grantor purports to convey an estate that she does not own, her subsequent acquisition of the estate will AUTOMATICALLY go to the grantee.

Question 40

Proper recordation gives_____notice of the 1st conveyance to everyone, so there can be no subsequent bona fide purchasers.

Answer 40

Constructive notice

Question 41

1. What is the typical language of a notice statute recording act?
2. what is its effect?

Answer 41

1. No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof, unless it is recorded.
2. Subsequent bona fide purchaser (i.e., for value, without actual or constructive notice) prevails REGARDLESS OF WHETHER THE BFP RECORDS

Question 42

1. What is the typical language of a race statute recording act?
2. what is its effect?

Answer 42

1. No conveyance or mortgage of an interest in land is valid against any subsequent purchaser whose conveyance is 1ST RECORDED.
2. Grantee WHO RECORDS 1ST shall prevail.

Question 43

1. What is the typical language of a race-notice statute recording act?
2. what is its effect?

Answer 43

1. No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof whose conveyance is 1st recorded.
2. Subsequent bona fide purchaser (i.e., for value, without notice) who records 1st prevails.

Question 44

For purposes of recordation statutes, are mortgagees for value purchasers?

Answer 44

YES. Mortgagee’s give value, and are therefore purchasers.

Question 45

What is the shelter rule?

Answer 45

A person who takes FROM a BFP will prevail against any interest that the BFP would’ve prevailed against. This is true even if the transferee had actual notice of a prior unrecorded conveyance.

Question 46

Record notice requires chain of title: what does this mean

Answer 46

A subsequent purchaser will be held to have record notice if the deed is recorded “in chain of title,” meaning recorded in such a manner that someone searching could reasonably find it.

Question 47

What is inquiry notice?

Answer 47

Under certain circumstances, a purchaser is obligated to make reasonable inquiries and is otherwise charged with knowledge of whatever the inquiry would have repealed.

Question 48

In a tract index jurisdiction, what does the searcher look for?

Answer 48

The buyer looks at the page indexed by block and/or lot describing the property and any instruments affecting it.

Question 49

In a grantor-grantee jurisdiction, what does the searcher look for?

Answer 49

The buyer looks for the chain of title by searching the index for prior buyers and sellers

Question 50

What is ademption?

Answer 50

If the testator bequeaths or devises an item specifically in his will that he no longer owns at the time of death, the gift FAILS. If the testator has given away part of his land, that part cannot pass by will

Question 51

In the case of ademption, what do most states do?

Answer 51

If the contract for sale of land was executory at the time of the testator’s death, the would be recipient of the land gets the proceeds instead.

Question 52

What is an anti-lapse statute?

Answer 52

If a named beneficiary in the testator’s will dies before the testator, the gift will pass to the predeceasing beneficiaries living decedents. This will never pass to the decedent’s spouse because it is not part of the beneficiary’s estate; rather, the descendents are substitutes for the beneficiary. (This does not apply if the beneficiary’s dead when the will is executed)