Land Conveyance and Real Estate Sale

Question 1

The Land Contract

Answer 1

Rule: Land contract must satisfy the statue of frauds, therefore, it must:

• Be in writing, signed by the party to bound;
• it must describe Blackacre; and
• Must state some consideration.

Question 2

Exception to Satute of Frauds (Doctrine of Part Performance)

Answer 2

Rule: Oral contract is enforceable if 2/3 are satisfied:

• B takes possession;
• B remits all or part of the price; and/or
• B makes substantial improvements.

Question 3

Doctrine of Equitable Conversion

Answer 3

Rule: Once a contract is signed, equity regards the buyer as the owner of real property. The seller’s interest (rights to the proceeds of the sale) is considered personal property.

• Seller holds bare legal title in trust, therefore, is entitled to possession until closing.

Question 4

Marketable Title

Answer 4

Rule: Every contract contains an implied covenant that the seller will provide marketable title at closing. It need not be perfect title, but it must be free of questions that present an unreasonable risk of litigation.

• Title acquired by adverse possession is unmarketable, unless court has ruled to quiet title.
• Encumbrances render title unmarketable.
• Zoning restrictions do not affect martetability, but violations of will.

Question 5

Remedy If Title Is Not Marketable

Answer 5

Rule: Buyer must notify seller that title is not marketable, and must give him reasonable time to cure the defects.

• If seller fails to cure the defects, the buyer’s remedies include recission, damages, specific performance with abatement, and a quite title suit.
• If closing occurs, no remedy is available because the contract has merged with the deed.

Question 6

Requirement of a Deed

Answer 6

Rule: A deed must be:

• in writing;
• be signed by the grantor; and
• reasonably identify the parties and the land.

Question 7

Dellivery and Acceptance

Answer 7

Rule: Grantor must intend to make a deed presently effective, even if possession is postponed.

NOTE: Title passes on delivery, and grantee giving back a deed has no effect. A new deed must be drawn up.

Question 8

Types of Notice

Answer 8

Record Notice: A person is charged with knowledge of a deed recorded in the “chain of title.” That is, knowldege that would be found by a title search.

Inquiry Notice: A person is charged with knowledge of whatever a reasonable inquiry into the land would have revealed.

Actual Notice: Knowledge obtained from any source (newspaper, word of mouth, etc.)

Question 9

Race-Notice Statute

Answer 9

Rule: Under a race-notice statute, a subsequent BFP is protected only is she takes without notice and records before the prior grantee.

Example: “No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof whose conveyance is first recorded.”

Question 10

Notice Statute

Answer 10

Rule: Under a race-notice statute, a subsequent BFP is protected only is she takes without notice and records before the prior grantee.

Example: “No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof unless it is recorded.”

Question 11

Deed: Reasonable Identification of Land

Answer 11

Rule: The description is suffecient if it provides a good lead to the indentity of the property.

Question 12

Dedication

Answer 12

Rule: Land may be transferred to a public body by dedication. This can be done by written or oral statement, submission of a map or plat shoing the dedication, or opening the land for public use.

• To be effective a dedication must be accepted. Usually done by, formal resolution, approval of map or plat, or actual assumption of maintenance or improvements.

Question 13

General Warranty Deed

Answer 13

Six covenants:

1. Siesin;
   * Grantor has title and possesion.
2. Right to convey;
   * Grantor has authority to make grant (i.e. Title is suffecient)
3. Against Incumbrances;
   * Physical or title (mortgages) encumbrances.
4. Quiet Enjoyment;
   * Grantee will not be disturbed in posession by third party’s lawful title.
5. Warranty; and
   * Grantor will defend against all claims by third paty and to compensate the grantee for any loss sustained by the claim of superior title.
6. Futher Assurances.
   * Grantor promises to perform acts necessary to perfect title.

Question 14

Breach of Covenants: Warranty Deed

Answer 14

Present Covenants: Breached, if at all, at the time of conveyance (includes: siesin, title, and against encumbrances).

Future Covenants: Breached only upon disturbance of grantee’s possesion.

Question 15

Statutory Special Warranty Deed

Answer 15

Rule: Generally contains only two covenants:

1. That grantor has not conveyed the same estate or any interest therein to anyone other than grantor; and
2. That the estate is free from encumbrances.

Question 16

Estoppel By Deed

Answer 16

Rule: If the grantor purports to convey an estate in property that she does not then own, her subsequent acquisistion of the estate will automatically inure to the benefit of the grantee.

• Does not apply to quitclaim deeds.
• Most courts hold that title inures to the benefit of grantee only as against the grantor. Thus, if grantor subsequently transfers her after acquired title to a BFP, the BFP will prevail over original grantee.

Remedies: Accept title or sue for damages due to breach of covenant.