Essay Rule Statements

Question 1

When can a party seek specific performance of a land sales contract?

Answer 1

Generally, due to the unique nature of land, a party to a contract for the sale of land is entitled to specific performance after the other party breaches the contract, as normal money damages would be an inadequate remedy.

Question 2

Requirements for a valid land sales contract

Answer 2

A contract for the sale of land must comply with the Statute of Frauds; it must be in writing, signed by the party to be charged, and contain all of the essential terms of the contract.

These essential terms include the parties, the terms of payment, and an adequate description of the property. The writing does not need to be a formal contract but must contain the essential terms.

Question 3

When can you use parol evidence in a land sales contract?

Answer 3

The general rule is that if the description on its face identifies a particular tract of land as distinguished from other lands, it is adequate and parol evidence can be admitted and utilized to fit the description to the particular land.

Latent ambiguity OK to use parol evidence

Patent ambiguity cannot use parol evidece

Question 4

Latent ambiguity and patent ambiguity

Answer 4

Latent ambiguity: it is insufficient in itself to identify the property but refers to something extrinsic by which identification might possibly be made.

A patent ambiguity involves a description which leaves the land in question in a state of absolute uncertainty and refers to nothing extrinsic by which the land might be identified with certainty.

Question 5

Part performance of a land sales contract

Answer 5

Part performance awards specific performance when one party has paid for, possessed, or substantially improved the land in question.

However, North Carolina does not recognize the doctrine of part performance.

Specific performance may also be awarded when the party asserting the Statute of Frauds defense has already accepted the benefits under the contract.

Question 6

Partition

Answer 6

A tenant in common or a joint tenant generally has the right to unilaterally partition the property.

Property can be partitioned either voluntarily or involuntarily by court action.

In a partition action, the court divides the concurrently owned property into distinct portions, or if division of the property is not practicable or fair, the court may sell the property at a public auction and distribute the proceeds among the co-tenants in accordance with their ownership interests.

Question 7

Agreement not to partition property

Answer 7

An agreement by co-tenants not to seek partition is enforceable. However, the agreement must be clear and the time limitation must be reasonable.

Question 8

Implied warranty of habitability

Answer 8

There is an implied warranty of habitability in most residential leases.

The landlord must maintain the property such that it is reasonably suited for residential use.

The landlord’s failure to comply with applicable housing code requirements constitutes a breach of this warranty, particularly with regard to violations that substantially threaten the tenant’s health and safety.

Question 9

RRAA

Answer 9

Under North Carolina’s Residential Rental Agreements Act (RRAA), a residential landlord must provide fit premises, including the maintenance required to keep the unit in good and safe working order and the prompt repair of all electrical, plumbing, sanitary, and other facilities.

This warranty cannot be waived, so a tenant’s acceptance of property “as is” does not excuse the landlord from responsibility for these repairs.

Question 10

Remedies for breach of implied warranty of habitability

Answer 10

If the premises are not habitable, the tenant may choose to: (i) remedy the defect and offset the cost against the rent, (ii) refuse to pay rent, or (iii) defend against eviction.

Question 11

Remedies for breach of RRAA

Answer 11

In an action for rent abatement, the tenant may recover the difference between rent actually paid and the fair market value of the premises in their unfit condition.

Special and consequential damages

Punitive damages if the breach constitutes or is accompanied by tortious conduct.

North Carolina authorizes an action against a landlord who engages in unfair or deceptive practices. To prove this claim, the tenant must show that the landlord knew the premises needed repair, failed to correct the defects, and continued to demand rent payments.

However, a tenant may raise the affirmative defense of retaliatory eviction if the tenant made a good-faith request for repairs to the landlord about conditions in the premises that the landlord is obligated to repair under the RRAA.

Question 12

Landlord remedies

Answer 12

If a tenant fails to pay rent, then a landlord may use summary ejectment proceedings to regain possession of the leased premises and recover damages.

Question 13

Easement

Answer 13

An easement is the right held by one person to make specific, limited use of land owned by another. The land that is subject to the easement is the servient estate, whereas the land that benefits from the easement is the dominant estate.

Question 14

Express easement

Answer 14

An express easement arises when it is affirmatively created by the parties in a writing that is in compliance with the Statute of Frauds.

Question 15

Easement by reservation

Answer 15

An easement by reservation is created when a grantor conveys land but reserves an easement right in that land for his own use and benefit.

Question 16

Easement appurtenant

Answer 16

An easement appurtenant is tied to the land. Unless there are clear facts to the contrary, the benefits and burdens of the easement are transferred with the corresponding land.

Question 17

What happens if a written easement is granted but not recorded and sold?

Answer 17

However, if a written easement is granted but not recorded against the servient estate, then the easement is not enforceable against a bona fide purchaser.

When a bona fide purchaser buys the servient estate in good faith and without notice of the easement, the easement cannot be enforced against him.

Question 18

Estoppel by deed

Answer 18

Even if Holder was not a bona fide purchaser, he can assert the defense of estoppel by deed.

Under the estoppel by deed doctrine, a grantor who conveys an interest to land by warranty deed before actually owning it is estopped from later denying the effectiveness of his deed.

Consequently, when the grantor does acquire ownership of the land, the after-acquired title is transferred automatically to the prior grantee.

North Carolina recognizes the estoppel by deed doctrine when the grantor’s conveyance is by general warranty deed.

Question 19

General warranty deed

Answer 19

A general warranty deed guarantees certain covenants of title. The three present covenants of seisin, right to convey, and the covenant against encumbrances are breached at the time of the conveyance. In North Carolina, these covenants do not run with the land.

Question 20

What happens when an owner requires the serviant and dominant estate?

Answer 20

Once the easement and the servient estate are owned by the same person, the two property rights merge, and the easement is extinguished.

Question 21

Conveyance by deed

Answer 21

Despite a problem with the land sales contract, property can still be conveyed by a valid deed.

Deeds must also comply with the Statute of Frauds by including all necessary terms, such as the grantor’s signature, the named grantee, words of transfer, and a description of the property.

However, the essential terms of payment are not required for a valid deed.

If the description of the property is latently ambiguous (the description is insufficient to identify the property), then the parties may present parol evidence to identify the property. However, if the description is patently ambiguous (the description may not reflect the parties’ intent but is sufficient to identify the property), then the parties may not present outside evidence to describe the property.

Question 22

Tenancy by the entirety

Answer 22

North Carolina recognizes that real property can be held in a tenancy by the entirety. Tenancy by the entirety is a joint tenancy between married persons with a right of survivorship.

A joint tenancy requires four unities: possession, interest, time, and title. In North Carolina, there is a presumption that real property conveyed to a married couple is a tenancy by the entirety. This presumption is present even if the deed does not refer to the couple as married.

Question 23

Purchase money mortgage effect on tenancy by the entirety.

Answer 23

For most purposes, a deed of trust is treated the same as a mortgage.

Generally, neither party to a tenancy by the entirety can alienate or encumber property without the consent of the other.

There is an exception in North Carolina, however, for a purchase-money mortgage. A spouse who buys property with the aid of a purchase-money mortgage effectively commits the other spouse to the mortgage obligation. This is true even though the other spouse did not join in the execution of the mortgage, and it applies to all stages of the mortgage, including potential foreclosure.

Question 24

Effect of a mortgage

Answer 24

A valid mortgage is effective between the mortgagor and mortgagee, but it must be recorded to gain priority over other creditors.

Question 25

Race statute

Answer 25

North Carolina’s recording act is a race statute, meaning the first creditor to record his interest has priority over earlier unrecorded interests and later interests.

However, a recorded purchase-money mortgage has priority over all other non-purchase-money mortgages and liens, even those recorded earlier.