Land Transactions Flashcards
Contents of Standard Contract for Sale
- Purchase price and how it will be paid
- Legal description of the property
- Promise that good title will be provided by the seller
- Warranties of title: assurances by seller to buyer
- Date for transfer of possession
- Provision for liability for damage to the property during the intervening period
- Itemization of furnishing: listing of who gets appliances, plants, etc.
- Basic terms of an escrow agreement
- Earnest money
- Signature lines
Unmarketable Title Rule
the existence of unmarketable title from the seller to the buyer will allow for the buyer to rescind during the intervening period
Approaches to Nondisclosure
- Quality Approach
- Punitive Approach
- Economic Efficiency Approach
Quality Approach
Some jurisdictions impose liability where the quality was misrepresented (including market value, symbolic value, etc.).
Punitive Approach
All nondisclosure is punished.
Economic Efficiency Approach
Where the court finds that a preventable mistake was allowed to occur, it will impose liability under the theory of economic efficiency.
Types of Warranties
Present (can only be sued at the time of closing or during the statutory period)
- Covenant of Seisin
- Covenant to Convey
- Covenant against Encumbrances
Future (can be sued on after the deal is done)
- Covenant of General Warranty
- Covenant of Quiet Enjoyment
- Covenant of Further Assurances
Types of Deeds
- General Warranty Deed
- Special Warranty Deed
- Quitclaim Deed
General Warranty Deed
Usually full receipt covering all 6 warranties. Best kind for the buyer.
Special Warranty Deed
Only a deed as it applies between the buyer and seller (intermediate deed that covers no past purchasers)
Quitclaim Deed
No warranties of any kind. Worst kind for the buyer.
Escrow
An instrument deposited by its maker (grantor) with some third-party custodian (like lawyer or bank) who is given instructions to deliver the instrument to another party on the occurrence of one or more future conditions. Irrevocable.
Types of Escrow
- Commercial: delivered as part of transaction
2. Death: delivered when grantor dies
Estoppel by Deed
If grantor subsequently acquires title to the land, the grantor is estopped to deny that he had title at the time of the deed and that title passed to the grantee.
Trusts
Revocable alternative to escrow.
Title Certificate
Available in some jurisdictions to owners of title. Issued by the state and reissued to each new owner.
Mother Hubbard Clause
A clause which intends to convey specific tracts of land but does so using very general language.
Wild Deed
A deed that’s tied to an unrecorded link in the prior purchaser’s chain, not a subsequent purchaser’s.
Wild Deed Doctrine
The wild holder of deed in every jurisdiction loses.
Zimmer Deed (an adaptation of Wild Deed)
Where there is a deed that is tied to an unrecorded link in the subsequent purchaser’s chain, this holder will lose in relevant jurisdictions.
- In notice jurisdiction, apply the shelter rule.
Title Theory of Mortgage
A mortgage transfers title to a property to the mortgagee, who holds it until the mortgage has been paid off, at which time title passes to the mortgagor (buyer).
Lien Theory of Mortgage
The buyer holds the deed to the property during the mortgage term. The mortgage is a lien on the property until paid off.
Shelter Rule
A grantee who has received an interest in property from a bona fide purchaser will also be protected as a bona fide purchaser, even if the grantee would not legally qualify for this status.
Race Acts Recording Statute
provides that as between successive takers, the person who record first prevails
