Land Sale Contracts & Conveyances

Question 1

Land Sale Contracts: 3 SOF requirements

Answer 1

1) In writing,
2) Signed by the parties to be bound,
3) Essential terms articulated (E.g. Identify grantor/grantee, intent to convey, consideration to be paid, description of the land)

Question 2

Land Sale Contracts: SOF Exception

Answer 2

A land sale conract outside the SOF is enforceable against the selelr if the buyer does ANY 2 of the 3:
1) Pays all or part of the purchase price
2) Takes possession
C) Makes substantial improvements

Question 3

Land Sale Process: 4 steps

Answer 3

1) Contract
2) Escrow period (transfer of funds through escrow)
3) Closing (escrow completion to deed delivery)
4) Conveyance (successful deed transfer, upon which property is conveyed to the new owner)

Question 4

Equitable Conversion: Definition

Answer 4

During escrow (after land sale K but before deed delivery), buyer owns the real property, but seller owns personal property (i.e. right to proceeds of the sale)

Question 5

Equitable Conversion: Action against seller for claims arising before K

Answer 5

Any judgment against the seller is converted into an interest in sale proceeds

Judgment is not enforceable against real property (i.e. buyer is protected)

Question 6

Equitable Conversion: Risk of loss

Answer 6

If property is destroyed before closing through no fault of the parties, buyer bears the risk of loss in most jurisdictions

• Applies even if buyer has not yet taken possession
• Parties can contract differently
• Seller must credit any insurance proceeds from loss against the purchase price

Question 7

Equitable Conversion: Death of a party

Answer 7

If buyer or seller dies before closing, rights to the contract pass according to interests held

• Seller’s interest: Passes as personal property (i.e. sellers’s estate can sue for sale proceeds)
• Buyer’s interest: Passes as real property (i.e. buyer’s estate can sue for delivery)

Question 8

Land Sale Contracts: 2 implied promises

Answer 8

1) Promise to provide marketable title

2) Promise to disclose and make no material false statements

Question 9

Promise to Provide Marketable Title: Definition

Answer 9

Promise that title will be free from risk of litigation upon closing
- Can be waived by buyer, but not by seller

Question 10

Promise to Provide Marketable Title: Defects rendering title unmarketable

Answer 10

• Acquired by adverse possession
• Encumbered by interests (e.g. servitude, mortgage, future interest), BUT seller has the right to satisfy
• Zoning ordinance violations existing at sale

Question 11

Promise to Disclose: Definition

Answer 11

Seller must not materially misrepresent facts or make false statements concerning the property
- Seller has a duty to disclose KNOWN, LATENT material defects, which may be disclaimed if disclaimer is clear and specific

Question 12

Promise to Disclose: New property

Answer 12

Seller/builder is subject to an implied warranty of quality in construction

Question 13

Land Sale Contracts: Remedy for breach

Answer 13

Buyer must notify seller before closing and give reasonable time for seller to cure defects

• If seller fails to cure, buyer can rescind, file for damages, demand specific performance, or file suit to quiet title
• If buyer fails to notify seller before closing, K merges with the deed and seller is not liable for contractual promises

Question 14

Land Sale Contracts: Deed requirements

Answer 14

1) Lawfully executed

2) Delivered

Question 15

Deed Requirement: Lawfully executed

Answer 15

Deed must be signed by grantor, reasonably identify the parties, contain a legal description of the real estate

Question 16

Deed Requirement: Delivered

Answer 16

Requires intent to be bound by the conveyance

• Title passes upon effective delivery and cannot be rescinded
• Present intent controls; physical transfer not required

Question 17

Deed Delivery: Third-party or conditional transfers

Answer 17

If a deed is transferred with conditions or via a third party, courts look at grantor’s intent and whether she retains control to rescind transfer

Question 18

Deed Delivery: Acceptance

Answer 18

Grantee must accept the deed

• Acceptance is usually presumed
• Non-existent/void entity cannot accept deed
• Rejection by grantee is NOT effective delivery

Question 19

Land Sale Contracts: 3 types of deeds

Answer 19

• General warranty
• Special warranty
• Quitclaim

Question 20

Deeds: Special warranty

Answer 20

Grantor assures that:

a) They have not conveyed the land to another, and
b) The land is free from encumbrances attaching while grantor owned the land

Question 21

Deeds: Quitclaim

Answer 21

Transfers whatever interest grantor purports to have in property; no covenants included (i.e. grantor is not even promising they have title to convey)

Question 22

Deeds: General warranty

Answer 22

Includes:
3 present covenants (only breached at the time of delivery), and
3 future covenants (only breached upon third party interference with possession of grantee

Question 23

General Warranty Deeds: Seisin

Answer 23

Grantor covenants that they are the rightful owner (i.e. have title, possession) and that the deed covers the described land

Question 24

General Warranty Deeds: Right to convey

Answer 24

Grantor covenants that they have the right to convey

Question 25

General Warranty Deeds: Against encumbrances

Answer 25

Grantor covenants that the land is free from encumbrances (e.g. servitudes, mortgages)

Question 26

General Warranty Deeds: Quiet enjoyment

Answer 26

Grantor covenants that grantee will not be disturbed by a third party’s claim of lawful title

Question 27

General Warranty Deeds: Warranty

Answer 27

Grantor agrees to defend against the lawful claim of title by another or pay defense costs if the claim is successful

Question 28

General Warranty Deeds: Further assurances

Answer 28

Grantor promises to perform future acts reasonably necessary to perfect the title conveyed