Land Sale Contracts Flashcards
Doctrine of Equitable Conversion
If seller of land dies before contract closes, the successors to the seller’s real property must give up legal title at closing
Once K signed and both parties entitled to specific performance, buyer of land is considered to own and seller entitled to sales
What happens if buyer of land does not tender purchase price until after closing date?
Whether there is breach depends on whether seller tendered a conveyance of title (neither party in breach until other tenders performance)
Gen rule: party has reasonable time after closing date to tender performance and avoid breach (party who is late may enforce K but is liable for incidental damages)
Exception: time is of the essence clause
Closing
When parties to land sale contract are to exchange purchase price and deed
Time is of the Essence clause
Closing date absolutely binding in equity so party who fails to tender performance on closing date is in total breach and loses right to enforce K
(1) K states time of essence
(2) Circ indicate parties intend
(3) One party notifies the other w/in reas time before closing date
Can a buyer obtain specific performance in an oral land sale K?
Most courts will enforce oral K in equity if perf at least 2:
(1) taken possession of land
(2) made substantial improvements to the land
(3) paid all or part of purchase price
-No damages remedy, only specific perf
Land sale contracts requirements
- Statute of frauds: must be memorialized in writing and have:
(1) description of property
(2) ID of parties
(3) price and manner of payment
(4) signature of party to be charged
What if buyer of land dies befoer K closes?
Successors to buyer’s real property rights may demand a conveyance of land at closing
What if seller breaches implied covenant of marketable title?
Closing date may be extended to allow seller time to cure, recission is available (buyer rescind K, sue for damages, get specific performance)
What would make title to land unmarketable?
(1) restrictive covenant that limits development on land (mortgages, liens, easements, covenants)
(2) Prior deed from grantor who lacked capacity to convey land (defect in chain of title)
(3) Hidden easement reducing value of land (constitutes encumbrance on property)
Title insurance policy
Protects person who owns policy by ensuring that insured as good record title as of the policy’s date and defends that title in event of litigation
Seller liability for defects in any improvements to existing land and buildings
May be based on seller’s
(1) misrepresentation
(2) active concealment
(3) failure to disclose serious defects known to her and which the buyer is not likelyt to discover
Can avoid liability with specific disclaimer identifying and disclaiming liability for specific types of defects
If buyer breaches land sale K, what can seller recover?
Difference between K price and market value of land on date of breach + incidental damages
