IV. Transferring Property - Real Estate Transactions and Title Assurance Flashcards
Hickey v. Green
An oral land-transfer agreement may be specifically enforced, even though it violates the Statute of Frauds, if the party seeking enforcement detrimentally relied on the validity of the contract and injustice can be avoided only by specific performance.
Hickeys told Green they were going to sell their old house to build on Green’s lot, Green backs out of deal for another buyer.
Lohmeyer v. Bower
The purchaser of real property may choose to cancel the sale if the title to the land is found to be unmarketable.
Lohmeyer found 2 zoning violations for house he was contracted to purchase.
Brush Grocery Kart v. Sure Fine Market
After executing a contract for the sale of real property, the vendee does not bear the risk of loss to the property prior to the transfer of title unless the vendee is in possession of the property.
Hailstorm caused $60,000 damage during trial that was to determine the price of purchase. Sure Fine not responsible because they were not in possession of property.
Stambovsky v. Ackley (Disclosure)
If a seller creates a condition that materially impairs the value of a contract and is within the knowledge of the seller or unlikely to be discovered by a prudent purchaser exercising due care, nondisclosure of the condition constitutes a basis for rescission of the contract.
Disclosure required if:
(1) condition created by seller
(2) materially impairs value of contract
(3) and is peculiarly within knowledge of seller/unlikely to be discovered by prudent purchaser (seller created condition, material, latent)
Stambovsky found out the home he was purchasing was “haunted”.
Strawn v. Canuso (Disclosure)
A professional seller of residential real estate, or a broker representing that seller, has a duty to disclose to a prospective buyer off-site conditions that materially affect the value or desirability of the real estate.
150 families bought residences near a hazardous waste dump site.
Rosengrant v. Rosengrant (Delivery)
A property transfer is only valid if the transferor intends for the transfer to take effect immediately upon delivery of the deed.
Mildred Rosengrant brought nephew Jay to a bank and gave him the deed to record upon their death. Jay did, but delivery was not immediate because Harold’s name was on envelope, and did not relinquish control.
Vasquez v. Vasquez (Delivery)
If a grantor actually delivers a deed to a third person and, without reserving a right to recall it, instructs the third party to deliver it to the grantee upon the grantor’s death, delivery is complete.
Juanita executed a will naming Ignacio and Jose Vasquez her heirs, then executed a deed granting property to Brigido Vasquez. She gave deed to her attorney to keep as a secret, and record and deliver to Brigido upon her death.
Brown v. Lober
The mere existence, without more, of a superior title does not constitute a breach of quiet enjoyment.
Browns discovered they only owned 1/3 of mineral rights when selling.
Luthi v. Evans (Notice)
A Mother Hubbard clause that does not provide a sufficiently detailed description of the property conveyed fails to provide constructive notice to a subsequent purchaser.
Messersmith v. Smith (Recording Acts)
The recording of a title instrument that does not meet the recording act’s statutory requirements does not provide constructive notice of the transfer to subsequent buyers. (In this case an acknowledgement in front of an officer of the notary)
Messersmiths convyed to Smith, who conveyed to Seale. Smith did not properly record as he acknowledged signature over the phone instead of in the presence of the notary.
Board of Education of Minneapolis v. Hughes (Recording Acts)
One who records his valid title first is the record owner of real property, regardless of whether another party has earlier received the same property.
Hoergers conveyed land to Hughes and again to Duryea &n Wilson. Hughes recorded before Duryea & Wilson.
Raub v. General Income Sponsors of Iowa (Recording Acts)
A bona fide purchaser is entitled to have its purchase upheld if it is not on reasonable notice to make inquiry into whether the grantor obtained the property fraudulently.
Raub sought to void deeds after being frauduently induced to transfer deeds, and banks claimed mortgages were invalid.
Riordan v. Lawyers Title Insurance Corp. (Recording Acts)
Title insurance for lack of a right of access to the property and unmarketability of title does not cover losses caused by lack of only practical access or physical defects. Title policy insures quality of owner’s title, not the marketability of land.
Riordans purchased title insurance, including lack of a right of access to the property and unmarketability of title. They demanded right of way to the property from the US, and sued title insurance claiming lack of vehicular access was covered, and lack of access made title unmarketable.
Shelter Rule
Subsequent purchasers after a BFP receive BFP protection.
Bona Fide Purchaser (BFP)
-
subsequently purchases an interest in land
– Any person who later acquires interest in land (including non-possessory interest, e.g. easement, lien, etc.) -
for valuable consideration
– not a gift or nominal payment (something substantial, indicative of bargain)
– Designed to protect person who make economic investments in good faith reliance on state of record title; no need for full/fairmarket value payment
– distinguish donee/gifts, devisees, and heirs
– Preexisting debt and judgment liens are not valuable consideration -
without notice of an interest already held by a 3rd party.
– At time when deed or other instrument is delivered
– NOT the time of recording
