Land sale contracts

Question 1

party seeking to be bound means

Answer 1

party being sued

Question 2

doctrine of part performance

Answer 2

equitable doctrine that allows buyer to enforce an oral real estate K by specific performance if

1. oral K is certain and clear
2. acts of partial performance clearly prove existence of K

Question 3

acts of part performance fulfilled by

Answer 3

need 2 of 3

1. buyer has taken possession of the property
2. buyer has paid the purchase price or a significant portion of the purchase price
3. buyer has made substantial improvements to the premises

Question 4

doctrine of equitable conversion

Answer 4

once K is signed, “equity” indicates the buyer as the owner of the real property

K conveys equitable title to buyer

Question 5

ROL if property destroyed btwn contract and closing

Answer 5

buyer bears risk unless K privately reallocated ROL

seller has to credit fire or casualty insurance proceeds against purchase price to buyer

Question 6

Every K contains an implied covenant that the seller will provide _________ at closing

Answer 6

marketable title

Question 7

List (3)

common defects of unmarketable title

Answer 7

1. Defects in record chain of title → usually adverse possession issue
2. Encumbrances (mortgage, lien, easement, restrictive covenants)
3. Zoning violations

Question 8

If a title rests on AP, it is?

Answer 8

unmarketable

UNLESS

party has brought claim to quiet title and judge has approved it

Question 9

If a title has encumbrances it is?

Answer 9

unmarketable

UNLESS

buyer has waived them

NOTE: encroachments usually NBD … but a foot or more, will probably be an encroachment

Question 10

A hold of a future interest that is unborn or unascertained

Answer 10

makes it impossible to convey marketable title

Question 11

Title needs to be marketable

Answer 11

on the day of closing

Question 12

When does a seller need to give marketable title in an installment land contract?

Answer 12

not until buyer has made his last payment

Question 13

Remedy if title is not marketable

Answer 13

Buyer needs to give seller notice and reasonable time to cure defects.

closing date can be extended to give seller time to cure

Question 14

list (4)

if seller fails to cure prior to closing, what options does the buyer have?

Answer 14

1. rescission
2. damages
3. specific performance with abatement (reduction of purchase price)
4. a suit to quiet title

Question 15

if seller fails to cure after to closing, what options does the buyer have?

Answer 15

none

deed and contract merge and seller’s liability on implied covenant of marketability ends

Question 16

Can a general disclaimer of defects (aka “property sold as is” or “with all faults” language) allow seller to avoid liability for fraud or failure to disclose?

Answer 16

NO!

this is too general and lets the seller off the hook too easily.

if the seller lists specific defects, then it will likely be upheld and seller will avoid liability