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Property Law > Land Sale K's and Conveyances > Flashcards

Land Sale K's and Conveyances Flashcards

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1
Q

How does the SOF apply to land sale Ks?

A

it must be in writing, contain the signature of the party to be charged, and the essential terms (parties, descrip. of land, price)

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2
Q

Can part performance take a contract out of the SOF?

A

Yes, such as possession, substantial improvements, payment of purchase price.

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3
Q

What is the doctrine of equitable conversion?

A

When a K is signed, equity regards the buyers as the owner of the real property. The seller’s interest (right to proceeds of the sale) is considered personal property. Legal title held in trust for buyer; right to possession follows bare legal title. But seller is entitled to possession until closing.

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4
Q

What happens if property is destroyed before closing?

A

without fault of either party, majority rule places risk on the buyer. (still, seller needs to credit insurance proceeds against purchase price)

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5
Q

Under doc. of equit. conv., what happens if a party dies before K is completed?

A

seller’s interest passes as personal property and buyer’s interest passes as real property (if seller dies = legal title passes to heirs, but they must give up title at closing; if buyer dies = heirs can demand conveyance at closing)

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6
Q

What is the implied covenant in every land sale K?

A

Implied covenant that seller will provide marketable title (reasonably free from doubt or lawsuits) at closing

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7
Q

What can make a title unmarketable?

A

Defect in chain of title (variation in land description in deeds, defectively executed deed, prior grantor lacked capacity to convey)

Encumbrances: mortgages, liens, restrictive cov., easements, options to purchase (but all this must be present, not resolved, by closing)

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8
Q

Is title acquired by adverse possession unmarketable?

A

Yes

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9
Q

When the holder of a FI is unborn/unascertained, is it possible to convey marketable title?

A

No

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10
Q

Do zoning restrictions affect marketability?

A

No, but an existing violation of a zoning ordinance does

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11
Q

Under an installment land K, when must title be marketable?

A

When the buyer makes his last payment

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12
Q

Is a seller liable on implied contractual cov. of marketability after closing?

A

No - seller is only liable for express promises made in deed

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13
Q

What are the bases for suit by Buyer after title passes?

A

Through express covenant, including: seisin, right to convey, encumbrances, quiet enjoyment, warranty, further assurances

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14
Q

What must a buyer do if title is unmarketable?

A

Give seller notice and reasonable time to cure defects; if seller fails to cure, buyer can: rescind, sue for damages, specific performance w/ abatement, and a quiet title suit.

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15
Q

Does a quitclaim deed affect the implied covenant of marketable title?

A

No

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16
Q

What are the remedies for breach of sale K?

A

damages (difference between K price and FMV on date of breach, plus incidentals), or because land is unique, specific performance

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17
Q

What if a buyer wishes to proceed despite unmarketable title?

A

She can usually get specific performance w/ abatement of purchase price

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18
Q

Can a seller retain the buyer’s earnest money upon breach?

A

Yes, usually construed as liquidated damages

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19
Q

What are the seller’s liabilities for defective property?

A

Warranty of fitness/quality (new construction only); negligence of builder; misrepresentation (fraud); active concealment, failure to disclose defects

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20
Q

What is the warranty of fitness in a K of sale and deed of real property?

A

no implied warranty of quality, but cts. recognize warranty of fitness in sale of NEW house by the builder

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21
Q

What if a builder is negligent in performing building K?

A

buyer can sue

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22
Q

Can the seller be liable for defects in existing building, such as leaky roof, floor basement, termites, etc?

A

Yes, under misrep (know or negligently made false statement of fact to buyer and buyer relied on statement, that materially affects value); under active concealment (didn’t make statements, but took steps to conceal defects - wallpaper over water damage); under failure to disclose when knew or reason to know, defect is not apparent and buyer unlikely to discover through ord. inspection, and defect is serious

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23
Q

Can a seller avoid liability for defects through a general disclaimer in the sale K? (sold as is with all defects)

A

No, if liable for fraud, concealment, or failure to disclose. But if seller expressly disclaims liable for specific defects, will be upheld.

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24
Q

What is a deed?

A

transfers title to an interest in real property

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25
Q

What are the requirements of a deed?

A

in writing, signed by grantor, reasonably identifies land and parties

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26
Q

Can a deed convey property by inter vivos gift?

A

Yes, if: 1. donative intent; 2. delivery; and 3. acceptance

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27
Q

What happens when a deed is void?

A

set aside by court even if the property has passed to a BFP (these are forged, never delivered, issued to a nonexistent grantee, obtained by fraud in factum - grantor deceived and did not realize that she was executing a deed)

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28
Q

What happens when a deed is voidable?

A

will be set aside only if the property has not passed to a BFP (executed by minors, incapacitated persons, fraud in inducement, duress, undue influence, mistake, breach of FD)

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29
Q

What is a fraudulent conveyance?

A

even if the deed complies with formalities, can be set aside by grantor’s creditors if made with 1. actual intent to hinder, delay, defraud creditor of grantor; 2. without receiving a reasonably equivalent value in exchange for transfer (and debtor was insolvent). But will not be set aside against grantee who took in good faith and paid reasonably equivalent value.

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30
Q

What do you need for a description of land to be sufficient?

A

good lead to the identity of the property (all my land in Stockton); if too indefinite, grantor retains title (but can be reformed)

Parol evidence may be admissible to resolve ambiguities if description gives a good lead

31
Q

When can a deed be reformed?

A

when it does not represent the parties’ agreement because of 1. mutual mistake; 2. scrivener’s error; or 3. unilateral mistake caused by misrep.

32
Q

When is a deed effective?

A

When delivered and accepted (deed to dead person is void and conveys no title, even if grantor was unaware of death - title remains in grantor)

33
Q

How is delivery of deed satisfed?

A

manual delivery, notarized acknowledgement by grantor and recordation, or anything else showing grantor’s intent to deliver (parol evi. is admissible on issue of intent, but not to show that delivery was conditional)

  • title passes upon delivery – it cannot be taken back or canceled (grantee cannot return deed to grantor, no effect); to return, grantee needs to draw up new deed and deliver to grantor
34
Q

What does retention of interest by grantor suggest?

A

this, a right to revoke, indicates lack of intent to pass title

35
Q

Does failure to record a deed affect passage of title?

A

No

36
Q

What if the deed provides that title will not pass until grantor’s death?

A

This is valid and creates a FI in the grantee

37
Q

What if a deed is delivered with an oral condition?

A

condition is disregarded adn delivery is absolute (needs to be in the deed to be effective)

38
Q

When is conditional delivery permissible?

A

when grantor gives deed to third party w/ instructions to give to grantee (if fails to give instructions, validity depends on whether the third party is considered an agent - if so, no delivery);

grantor gives to third party w/ instructions to give to grantee when certain conditions occur (parol ev. fine to show that delivery is conditional – this is not the case when the grantor gives DIRECTLY to grantee)

39
Q

When can a grantor revoke deed?

A

if condition has not occurred and no enforceable written K to convey

40
Q

What happens when grantee wrongfully acquires deed from escrow holder prior to perf. of condition?

A

title does not pass and grantee cannot give good title to subsequent purchaser

41
Q

What is the relation back doctrine?

A

When there is an enf. K to covey, title may relate back to the time when grantor gave deed to third party - rights of intervening BFP are protected (usually happens when grantor dies or becomes incompetent) (only way to really circumvent performance of condition and passing title at that time)

42
Q

Can a grantor revoke deed before a condition occurs when he gives to third party to give to a donee?

A

if the condition is not the grantor’s death, cts will generally hold delivery revocable unless enf. K to convey; if condition is grantor’s death, cts find delivery irrevocable (clear intent to create FI in donee)

43
Q

When is acceptance effective?

A

relates back to date the deed was delivered into escrow

44
Q

What are the three types of deeds used to convey property interests other than leaseholds?

A

general warranty deed, special warranty deed, and quitclaim deed

45
Q

What are the covenants in a general warranty deed?

A

cov. of seisin: grantor cov. that she has the estate she purports to convey (title and possession at time of grant)
cov. of right to convey: grantor has authority to make grant
cov. against encumbr: no physical (encroach) or title enc (morgages)
cov. for quiet enjoyment: grantee will not be disturbed in possession by a third party’s lawful claim of title
cov. of warranty: grantor agrees to defend against reasonable claims of title by a third party and compensate grantee for loss sustained by claim of superior title
cov. for further assurances: promises to perform acts nec. to perfect title conveyed

46
Q

When can seis, right to convey, and cov. against encumbrances be breached?

A

at time of conveyance, only

47
Q

When can cov. of quiet enjoy, warranty, and further assurances be breached?

A

after conveyance, upon disturbance of grantee’s possession

48
Q

What is a special warranty deed?

A

same covenants as a general, but promises to warrant adn defend the title only against claims arising by, through, or under the grantor (does not warrant against defects in title that existed before the grantor was deeded the property)

49
Q

What is a quitclaim deed?

A

releases whatever interests the grantor has - no covenants of title are included or implied

50
Q

What is estoppel by deed?

A

if a grantor purports to convey an estate in property that she does not own, her subsequent acquisition of the estate will auto. inure to the benefit of the grantee (usually doesn’t apply to quitclaim deeds)

title inures to the benefit of the grantee only against the grantor; so if grantor transfers after-acquired title to BFP, BFP will prevail against original grantee

remedies: original grantee can accept title or sue for damages for breach of cov.

51
Q

At common law, what happens if the grantor conveyed the same property twice?

A

grantee first in time generally prevailed

52
Q

Who do recording acts generally protect?

A

BFPs from secret interests previously created and provide mechanism for earlier grantees to give notice through recordation

53
Q

Why might recording be necessary for the grantee?

A

not essential to validity of deed btwn grantor and grantee, but essential to protect grantee against a BFP (statutes require grantee to record deed to put subseq. purchasers on notice)

54
Q

What is the effect of proper recordation?

A

gives constructive notice of first conveyance to everyone - there can be no subseq. BFPs

55
Q

What are the three different types of recording acts?

A

notice statutes, race-notice statutes, and race statutes (under all three, burden is on subseq. taker to prove that he qualifies for protection)

56
Q

What does a notice statute require for protection?

A

a subsequent BFP (person who pays value + no notice of prior instrument) prevails over prior grantee who failed to record

key: subseq purchaser had no actual or constructive notice at time of conveyance

57
Q

Under a notice statute, is the BFP protected regardless of whether she records?

A

yes

58
Q

Example of BFP who prevails under notice statute

A

O to A on Jan 1. A does not record. O to B on Jan 15 for value. B has no notice of convey to A. B prevails over A. It doesn’t matter if A later records after Jan 15 and B, before B records. B simply had no notice at time he took.

59
Q

What does a race-notice statute require for protection?

A

subsequent BFP is protected only if she takes without notice AND RECORDS before prior grantee (BFP who records first prevails)

60
Q

Example of BFP who does not prevail under race-notice statute

A

O to A on Jan. 1. A does not record. O to B on Jan. 15. B has no notice of A. A records on Jan. 18. B records on Jan. 18. A prevails because B did not record first.

61
Q

What does a race statute require for protection?

A

whoever records first wins, notice is IRRELEVANT.

62
Q

What constitutes a BFP?

A

purchaser + without notice (actual, constructive, or inquiry) + pays valuable consideration

Donees, heirs, and devisees are not BFPs and thus, are not protected under the recording acts (do not give value)

purchaser from donee/heir is protected

judgment creditor is not protected against prior unrecorded conveyance by def.

63
Q

What is the Shelter Rule?

A

a person who takes from a BFP will prevail against any interest the transferor-BFP would have prevailed against. This is true even if transferee had actual notice of a prior unrecorded conveyance.

64
Q

What does it mean for a purchaser to lack notice?

A

no actual, constructive (record), or inquiry notice of a prior conveyance at time she paid consideration and received interest (doesn’t matter if she learned of conveyance AFTER purchase, all that matters is what she knew at time of conveyance)

65
Q

What is actual notice?

A

knowledge obtained from any source (newspaper, word of mouth)

66
Q

What is constructive notice?

A

aka record notice, if deed is recorded in chain of title (recorded in a manner that a searcher could reasonably find it - subseq purchaser is charged w/ notice if a search would provide the result, even if she doesn’t actually make the search, and even though she has no duty to search)

67
Q

What is a wild deed?

A

recorded deed not connected to the chain of title, so it does not impart constructive notice b/c subseq. purchaser could not find it

O to A. A does not record. A conveys to B and B records. O conveys the same to C. C does NOT have notice of B’s claim.

68
Q

What if a deed is recorded late? (notice)

A

deed recorded after grantor is shown by record to have parted w/ title through another subsequent instrument is not constructive notice

69
Q

What if grantor who had no title when conveyed but afterwards obtains title?

A

generally does not impart constructive notice to BFPs - BFP will win bc not in chain of title

70
Q

What is inquiry notice?

A

purchaser is charged w/ knowledge or what the inquiry would have revealed, even if in fact he made none (references to recorded instruments to unrecorded transactions and possession unexplained by record = give rise to inquiry notice)

71
Q

What if a purchaser doesn’t pay consideration before the deed is delivered and recorded?

A

will not prevail over other deeds recorded subseq. but before the consideration is finally paid

72
Q

When is an instrument considered recorded?

A

when filed w/ recorder’s office, regardless of whether it is thereafter properly indexed (subseq purchaser is charged w/ notice of misindexed instrument but can pursue action against recorder’s office)

73
Q

What happens when a property is devised by will, but testator no longer owns it at time of death?

A

gift fails; this is ademption

only the portion that is sold or given away is adeemed, the remainder passes to devisee

74
Q

When does a lapse occur?

A

when the beneficiary of a gift in a will dies before the testator; now, the gift can pass to predeceasing beneficiary’s living descendants (anti-lapse statute specific conditions)

anti-lapse statute will not apply if there is a contrary will provision (gift is contingent on beneficiary surviving testator)

Property Law (9 decks)

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