Land Sale

Question 1

Marketable title

Answer 1

Title free from defects or unreasonable risk of litigation

Seller generally not required to deliver marketable title until closing; seller can use sale
proceeds to pay off an existing mortgage, eliminating the related title defect

Buyer can rescind/recover out-of-pocket and earnest money payments, sue for breach, or sue for SP with an abatement of purchase price

A buyer receives marketable title if the buyer’s interest has priority over competing interests in the same property.

And a buyer with a recorded equitable interest has priority over a subsequent judgment lien.

Question 2

Equitable Conversion

Answer 2

Under the doctrine of equitable conversion, although the seller retains legal title to real property during the pendency of the sales contract, equitable title passes to the buyer upon entering the contract. The seller effectively holds the property in trust for the buyer, and he has a duty to keep up the property. However, as the holder of legal title, the seller has the right to possess the property. Equitable conversion does not apply if the contract is not specifically enforceable.

Most states, following the logic of the doctrine of equitable conversion, place the risk of loss during the time between the execution of the contract and the closing on the buyer, regardless of whether the buyer takes possession of the property. An exception is recognized when the loss is attributable to the seller’s intentional or negligent actions. The Uniform Vendor and Purchaser Risk Act (adopted by a minority of jurisdictions) keeps the risk of loss with the seller, unless and until the buyer takes possession, or title is transferred. For the Act to apply, a material part of the property must be destroyed.

Question 3

When a person who attempts to transfer real property that he does not own subsequently becomes owner of that property…

Answer 3

When a person who attempts to transfer real property that he does not own subsequently becomes owner of that property, the after-acquired title doctrine provides that title to the property automatically vests in the transferee

Answer 4

Most jurisdictions require residential sellers to disclose all known, material physical defects that cannot be reasonably discovered by the buyer.

**However, this duty can be disclaimed if **
(1) **clearly and specifically stated **in the sales contract and
(2) the property’s condition has not been fraudulently misrepresented or concealed.

T: as is clauses r kosher