land sale Flashcards
writing requirement
sof
The writing must be signed by the party to be charged; and (2) Must include a: description of the property; description of the parties; the price; & any
conditions of price or payment
Marketable Title:
Title that is reasonably free from doubt.
not free from doubt if
defects in chain of title
encumbrences
encroachments
zoning restrictions
physical defects
defects in chain title.
traditionally adverse makes it not free from doubt
modern it is if owner isn’t likely to make claim or doesn’t succeed
defective execution of deed
encumbrances
Mortgages. think a default
Liens.
Easements. need to record for marketable
Covenants. need to record for marketable
Satisfaction of Encumbrances at Closing: A seller may satisfy a mortgage or lien at
closing with the proceeds of the sale.
encroachment
A significant encroachment renders title unmarketable.
A slight encumbrance (such as a boundary overlap of several inches only) will not render
title unmarketable.
In some jurisdictions, an encroachment that is visible or known to the purchaser does not
render title unmarketable.
Zoning Restrictions: and physical defects
The existence of a zoning restriction does not make title unmarketable.
However, a zoning violation may render title unmarketable.
Physical defects in the property, such as termites, do not render title
unmarketable.
Conversion:
The buyer bears the risk of loss on execution of a binding contract (Majority rule, FL
law).
The risk of loss is placed on the seller unless the legal title or possession of the property
has passed to the buyer (Minority rule).
Merger:
Traditionally, covenants in a contract of sale merge into the deed at closing.
o Under the modern view, the merger does not apply to matters that are collateral or not mentioned
in the deed.
duty to disclose defects
A residential seller has a duty to disclose to the buyer material latent
defects known to the seller, but that are not readily observable and thus unknown to the buyer.
types of seller and home depend on state
material= some states affect health and safety other states value
defect some states physical others non physical like noise
implied warranty of quality
an implied warranty of habitability, an implied warranty of fitness, or an implied warranty of suitability.
generally to new or remodeled homes
no commercial
imposed on contractors developers etc
covers significant latent defects caused by defendants’ poor workmanship.
must be discovered within a “reasonable time” of construction or remodeling.
split on subsequent purchasers and split on economic loss
Most jurisdictions permit the enforcement of an unambiguous disclaimer.
sol different with states
(construction completed buyer takes possession)
sellers remedies for buyers
money damages
expectation- contract vs market price
incidental (inspections)
consequential (mortgage prices)
punitive if willful
Retention of Deposit if a Contract for the Sale (Most courts have restricted the traditional rule to a down payment that equals10% or less of the purchase price/ traditional whole deposit.)
may include a liquidated damages clause, which
states that the seller may retain the entire amount of the down payment if the buyer
breaches. enforceable if = injury caused by the breach is one that is difficult or incapable of accurate
estimation and And the stipulated damages are a reasonable forecast of the harm caused by the
breach.
equity remedies
rescission of contract if buyer breaches
specific performance =
buyer remedies for sellers breach
money damages
expectation- contract vs market price
incidental (inspections)
consequential (mortgage prices)
punitive if willful
Restitution of Deposit:
if failure to deliver marketable title English rule no expectation unless bad faith American rule expectation
equity the same as sellers
mortgage
A conveyance of an interest in real property made to secure performance for an obligation.
The obligation often arises out of a loan of money made to facilitate the purchase or development of real
property.
