Land Purchase:Sale Flashcards
What are the 2 steps in the conveyance of real estate?
1) The land K, which endures UNITILL… 2) The closing, where the DEED becomes the operative document
How is risk of loss apportioned in land sales? NOTE: NY Distinction
The std is Equitable Conversion = once the K is signed, the buyer is the owner of he land (s/t the condition to pay purchase price at closing) At sigining, the risk of loss (i.e. destruction without FAULT) is on the BUYER (i.e. has to pay FULL K price), UNLESS the K states otherwise NY DISTINCTION: in NY so long as the buyer is w/out fault, the ROL remains with the SELLER until the buyer takes possession
What are the requirements of the land K?
1) The land K must be in WRITING, signed by the would-be ∆ (p/t SOF) SOF EXCEPTION: the “doctrine of part performance”; if you have TWO of the following THREE elements, DON’T need a writing… Buyer takes possession; Buyer pays ALL or PART of the price; Buyer makes subtl improvements 2) It must describe blackacre and state some consideration? When the amt of land receited in the K is MORE than the actual size of the parcel, the REMEDY is specific performance w/ a pro rata reduction in price
What are 2 implied promises in everyland K?
1) Seller promises to provide MARKETABLE title at the closing The std = the title is free from reasonable doubt (i.e. free from litigation or the threat of litigation) UNMARKETABLE TITLE = Title acq’d by adverse possession (even if just PART of title) BUT, if the seller brings a succesful c/a action to quiet title and is successful, then CAN sell Encumberances (no servitudes or mtgs UNLESS waived by buyer) [NOTE: seller has a right satisfy existing mtg w/ sale proceeds] Zoning violations (BUT not when blackacre is subject to an adverse zoning req) 2) Seller promises not to make any false stmt of material fact Seller is liable for failure to disclose LATENT material defects Even if K states a general disclaimer of liability (e.g. “property sold as is”), it wont relieve seller from liability for FRAUD or FAILURE to disclose
Do land Ks contain implied warranties of fitness OR habitability?
At common law, NO! (caveat emptor) EXCEPTION: the implied warranty of fitness and workmanlike construction APPLIES to sale of a NEW home by a BUILDER vendor
What is the purpose of a deed?
At closing, the deed PASSES legal title from the seller to the buyer
What are the 4 requirements for a deed to pass legal title?
“L-E-A-D” = Lawfully Executed And Delivered 1) Lawful execution of the deed 2) Delivery of the deed
What is the std for the lawful execution of a deed?
The std = the deed must be (1) in WRITING (signed by the grantor); AND (2) have a DESCRIPTION of the land The land description doesn’t have to be perfect, just UNAMBIGUOUS YES: “All of O’s land” NO: “Some of O’s land” NOTE: need not recite consideration, NOR must consideration pass to make a deed valid
What is requirements for a deed to be properly “delivered”?
“Delivery” is accomplished… 1) When grantor PHYSICALLY transfers deed to the grantee (via the mail, agent OR messenger); 2) When the deed has been LEGALLY transfered (governed by grantor’s present INTENT); OR 3) When delivered by ESCROW (via an escrow agent once conditions are met); BUT 4) NOT when the grantee expressly REJECTS the deed NOTE: if deed (absolute on its face) is transferred to grantee with an oral condition, the oral condition DROPS OUT (it’s not provable), BUT delivery is accomplished
What are the 3 types of deeds? NOTE: NY Distinction
1) The quitclaim deed (containing NO cov’ts) 2) The general warranty deed (containg 6 cov’ts) 3) The statutory special warranty deed (containing 2 cov’ts) NY DISTINCTION: in NY known as a “bargain and sale deed”
What is a quitclaim deed?
A deed that conatins NO COV’TS Grantor isn’t even promising that the deed won’t have any post-closing issues (BUT the sales K has an implied promise to deliver marketable title at CLOSING) The WORST possible deed for a buyer
What is a general warranty deed AND it’s 6 cov’ts?
The general warranty deed warrants against ALL defects in title, INCLUDING those due to grantors predecessors 3 present cov’ts whereSOL starts running from the instance of delivery at closing 1) Cov’t of seisin = promise that the grantor owns this estate 2) Cov’t of right to convey = promise that grantor has the pwr to trnfr (i.e. he’s under no RESTRAINT or DISABILITY like age/sound mind) 3) Cov’t against encumbrances = promise that there are NO servitudes or mtgs on blackacre 3 future cov’ts where SOL for breach does not begin to run UNTIL the breach occurs (e.g. the date of the disturbance) 1) Cov’t for quiet enjoyment = promise that grantee won’t be DISTURBED in possession by a 3d party’s lawful claim of title 2) Con’t of warranty = promise that grantor will defend grantee against lawful claims of title asserted by others (indemnification) 3) Cov’t for further assurances = promise that grantor will do what’s needed to perfect to the title in the future (post-closing)
What is a statutory special warranty deed AND its 2 cov’ts? NOTE: NY Distinction
Deed that’s provided for by statute in many states, containing TWO promises that the grantor makes ONLY on behalf of himself (and NOT on behalf of his predecessors) 1) Grantor promises that he hasn’t conveyed this estate to anyone other than grantee 2) The estate is free from encumberances made by the grantor NY DISTINCTION: in NY this type of deed is called a bargain and sale deed
What is the shelter rule?
Scenario: O→A (does NOT record); O→B, BFP (records); B→C (C is B’s heir, and has knowledge of O→A transaction, so NOT a BFP) Shelter rule says… C takes shelter in B’s BFP status (steps into B’s shoes). Protects B, and BFP’s right to transfer land
What are the 2 types of recording statutes? NOTE: NY Distinction
2 types of jx: race notice jx (rnjx) vs. notice jx (njx) 1) Rnjx: If B is a BFP, and were are in a rnjx, B wins IF she records properly before A NY DISTINCTION: This is the rule in NY 2)Njx: the LAST BFP (B) wins regardless of who records first
