CONVEYANCING land sale contracts Flashcards
LAND SALE CONTRACTS–What do you need to have a valid contract?
LAND SALE CONTRACTS – SOF applies - writing; signed; and contains all essential terms (description; parties, price).
Governs until closing, at which time the deed becomes the operative doc governing the transfer under the merger doctrine.
Period between signing of the K and closing is known as the executory period.
LAND SALE CONTRACTS–merger doctrine
Governs until closing, at which time the deed becomes the operative doc governing the transfer under the merger doctrine.
LAND SALE CONTRACTS–executory period
Period between signing of the K and closing is known as the executory period.
Promissory estoppel
Promissory estoppel a party REASONABLY and FORESEEABLY RELIED on the land sale contract to his detriment and would suffer hardship if the contract is not enforced
Partial performance by either the seller or buyer (PIT0
Partial performance by either the seller or buyer is treated as a valid exception to the writing requirement in many jurisdictions if any of the two of the three are met: [PIT]
i. Payment of all or part of the purchase price.
ii. Improvements to the land made by the purchaser
iii. Takes possession
“time is of the essence”
Contracts normally include a closing date, but it’s not required. If there is a closing date and closing happens after that date, it’s actually okay (it’s not a breach) so long as it happened within a reasonable time and the contract doesn’t say “time is of the essence.”
SPECIFIC PERFORMANCE
The preferred remedy for breach of land contract because land is considered unique.
Doctrine of Equitable Conversion –
Doctrine of Equitable Conversion – BUYER bears risk of loss during escrow (from time K is signed till closing).
In CA: Minority follow Uniform Vendor and Purchase Risk Act – risk of loss tied to possession.
SELLER’S DUTY TO BUYER
h. S has a duty not to make any false statements of material fact (misrepresentation/fraud) and is liable for active concealment.
1. Maj. of states hold S’s liable for failure to disclose.
2. Material defects impact value, desirability, and health of property.
Liable if (1) S knows or has reas to know (2) not obvious to B and B is unlikely to discovery; AND (3) defect is serious & would prob cause buyer to reconsider purchasing.
3. (Maj.) S liable for latent defects. Latent defects are hidden defects – not easily discoverable by B.
General disclaimers of liability wont excuse fraud/omissions.
Material defects
Material defects are defects that substantially impact the value of the property, desirability of the property, or health and safety of its occupants (i.e., the presence of hazards such as lead-based paint, asbestos, and abandoned wells).
Latent defects
Latent defects are hidden defects – not easily discoverable to buyers.
DUTY TO DISCLOSE:
DUTY TO DISCLOSE: Most jdx’s impose a duty on the seller (or the seller’s agent) to disclose material defects and latent defects.
The doctrine of ‘caveat emptor’ (buyer beware)
The doctrine of ‘caveat emptor’ (buyer beware) was the general rule of residential real estate transactions. The seller could make no misrepresentations regarding the condition of the property but had no duty to disclose any defects to the buyer.
Exception: A builder vendor of a new home implicitly warrants that the home was constructed in an inhabitable, workmanlike manner.
EXCEPTION TO The doctrine of ‘caveat emptor’ (buyer beware)
Exception: A builder vendor of a new home implicitly warrants that the home was constructed in an inhabitable, workmanlike manner.
Two Implied Promises in every CONTRACT
Two Implied Promises in every K:
- S promises to provide marketable title at closing (title free from reasonable doubt + unreasonable risk of litigation)
- Unmarketable = CRAZE! CR; AP; Zoning Violations; Encumbrances (servitudes/mortgages);
