Marketable Title

Question 1

Marketable Title
Four Parts
1. ?
2.
3.
4.

Answer 1

1. Reasonably prudent intelligent buyer.

Question 2

Marketable Title
Four Parts
1.
2. ?
3.
4.

Answer 2

2. Who wouldn’t worry about buying the property because they wouldn’t be subject to the hazard of litigation.

Question 3

Marketable Title
Four Parts
1.
2.
3. ?
4.

Answer 3

3. Who would take and pay fair value.

Question 4

Marketable Title
Four Parts
1.
2.
3.
4. ?

Answer 4

4. After competent legal advice

Question 5

Marketable Title
Four Parts
1.
2.
3.
4.

Answer 5

1. Reasonably prudent intelligent buyer
2. Who wouldn’t worry about buying property because they wouldn’t be subject to the hazard of litigation.
3. Who would take and pay fair value.
4. After competent legal advice

Question 6

_______________ ______________ is a title which would not expose the buyer to the hazard of litigation with regard to a material matter, OR materially reduce the value of the property, assuming the parties are reasonably prudent and intelligent, and acting on competent legal advice.

Answer 6

Marketable Title

Question 7

Marketable Title is a title which would not expose the buyer to the hazard of litigation with regard to a _______ _________, OR materially reduce the value of the property, assuming the parties are _______ ________ and __________, and acting on ______ ______ ________.

Answer 7

material matter

reasonably prudent

intelligent

competent legal advice

Question 8

Marketable title is a title which would not expose the buyer to the _______ of _________ with regard to a material matter, OR materially reduce the value of the ________, assuming the parties are reasonably prudent and intelligent, and acting on competent legal advice.

Answer 8

hazard of litigation

property

Question 9

Hazard of litigation means that

Answer 9

you don’t want to buy a lawsuit

Question 10

Does the existence of a municipal regulation make title unmarketable?

Answer 10

NO

Question 11

The existence of a _______ _______ does not make title unmarketable.

Answer 11

municipal regulation

Question 12

If something is wrong with the property that could subject you to a lawsuit is title marketable?

Answer 12

NO!

Question 13

What is a common example of a municipal regulation?

Answer 13

zoning

Question 14

The existence of a municipal regulation does not make title unmarketable, but the _______ does make title unmarketable.

Answer 14

violation

Question 15

Mere existence of ___________ ____________, in place at the time of the agreement, do not render the title unmerchantable or unmarketable.

Answer 15

municipal regulations

Question 16

___________ ____________ are not really part of the “title to” or interest in land.

Answer 16

Municipal Regulations

Question 17

The discovery of the violation of municipal regulations pre-closing does usually result in the title being unmerchantable or unmarketable because it subjects the buyer to a _______ ____________.

Answer 17

potential lawsuit.

Question 18

The existence of a ________ __________ makes title unmarketable.

Answer 18

private restriction

Question 19

HOA rule – all the houses in thus subdivision have to white or gray or every house to have no tree in the front yard or nobody can park in the driveway unless you have two vehicles in the garage. The mere existence of those rules makes title unmarketable. How do you fix that?

Answer 19

You agree to them in the purchase agreement and agreement to them makes title marketable again.

Question 20

HOA rule – all the houses in thus subdivision have to white or gray or every house to have no tree in the front yard or nobody can park in the driveway unless you have two vehicles in the garage. The mere existence of those rules makes title unmarketable. How do you fix that?You agree to them in the purchase agreement and agreement to them makes title marketable again.

If the private restrictions are violated, then title is ______________ __________.

Answer 20

unmarketable again

Question 21

Mere existence upon the use and enjoyment of the land or the location and type of buildings that may be erected as established by private encumbrances rendering the title to land unmarketable. What does this refer to?

Answer 21

Private Restrictions.

Question 22

Statute of Frauds
Explain.

Answer 22

When conveying real property write it down. Needs to be written down and signed. If I tell you I am going to sell my house, I need to write it down and sign it.

Question 23

Except for leases less than three years, no interest in land may be created or transferred except by an instrument in writing, signed by the party to be bound.

What does this refer to?

Answer 23

statute of frauds

Question 24

No action shall be brought upon any contract or sale of land or any interest in or concerning land unless the agreement upon which the action is brought, or some memo or note thereof, shall be in writing and signed by the party to be charged.

What does this refer to?

Answer 24

Statute of Frauds

Question 25

Part Performance (recognized in most states): occurs where a party demonstrates that certain acts were undertaken that make sense only as having been performed pursuant to an oral contract (“unequivocally referable to a contract of sale”).
Really hard to explain absent an oral contract. They moved in or they paid you the purchase price or started putting in a pool. Examples of part performance and recognized as an exception to the statute of frauds.

What does this refer to?

Answer 25

Exception #1 to the Statute of Frauds.

Question 26

Example of ________ _________ would be the buyer’s taking possession of the property and paying all or part of the purchase price or making valuable improvements.

Answer 26

part performance

Question 27

Estoppel (well recognized): Has three basic elements:
o Inducement (action or inaction).
o Change of position in reliance upon inducement.
o Inequitable to deny the existence of a contract:
 Inequity occurs where one has been induced by the other seriously change his/her position in reliance upon the contract.
 Inequity occurs when unjust enrichment would result if a party who has received the benefits of the other party’s performance were allowed to rely upon the statute.

What does this refer to?

Answer 27

Exception #2 to the Statute of Frauds.

Question 28

Estoppel has three basic elements:
1. ?
2.
3.

Answer 28

1. Inducement (action or inaction)

Question 29

Estoppel has three basic elements:
1.
2. ?
3.

Answer 29

2. Change of position in reliance upon inducement

Question 30

Estoppel has three basic elements:
1.
2.
3. ?

Answer 30

3. Inequitable to deny the existence of a contract:

Question 31

Estoppel has three basic elements:
1.
2.
3.

Answer 31

1. Inducement (action or inaction)
2. Change of position in reliance upon inducement.
3. Inequitable to deny the existence of a contract:

Inequity occurs where one has been induced by the other seriously change his/her position in reliance upon the contract.

Inequity occurs when unjust enrichment would result if a party who has received the benefits of the other party’s performance were allowed to rely upon the statute.

Question 32

Example: Ricky says to Green, I am excited to buy lot S that I will put my house for sale now. She didn’t say you shouldn’t do that. What part of estoppel does this refer to?

Answer 32

Inactive inducement

Question 33

Hickey changed his _________ _______ ___________ upon Green’s inducement. Hickey advertised his house for sale and signed a contract with buyer. this can also be referred to as what?

Answer 33

position in reliance

detrimental reliance

Question 34

Unfair for Green to back out seeing as how Hickey has agreed to sell his house to somebody else. There was something in writing, but he didn’t fill out Green’s name on it and he left it blank. If he filled the name in, you wouldn’t have to read the case. He had some written language about the purchase. Hickey won and he had to finish paying her the purchase price.
What does this refer to?

Answer 34

Unfair or inequitable to deny the existence of a contract

Question 35

Statute of Frauds: Problems
1) O  A as a gift. Deed not recorded. Later O tells A she wants Black acre back. A, a dutiful daughter, hands the deed back to O and says, “the land is yours again.” O tears up the deed. Who owns Black acre?

Answer 35

A owns the land because they didn’t put it in writing. They could say my house is your house because to do that they would need to write it down.

Question 36

O conveys land to A and O as joint tenants. Deed is not recorded. A tells O she wants her son B to have her interest, O agrees. To save the recording tax on two deeds, A just whites out her name on the deed and puts B in her place. The revised deed is recorded. O dies. Who owns Black acre now?
A. A owns it
B. B owns it
C. O’s estate owns it

Answer 36

Answer: A. A owns it.
White out is a bad choice. Don’t pick the answer choice that started with white out. The point at which A has an interest. For A to convey her interest to her child she would have to write it down and sign it. She did write it down but she didn’t sign it. Not an effective conveyance A and O are joint tenants A gets O’s share. If we wanted B to own it A would have to convey her interest to B and O would have to convey to O and B as joint tenants with right of survivorship. A changing her interest just changes her part of the property. A didn’t sign this so not an effective conveyance. When O dies A has through the right of survivorship.

Question 37

Agreeing to a private restriction makes title marketable again. True of False.

Answer 37

True

Question 38

Types of Title (parties to an agreement can vary the standard to make it more or less rigorous):
1.
2.
3.
4.

Answer 38

1. Perfect Title
2. Record Title
3. Marketable Title
4. Insurable Title

Question 39

Subject to no risks or defects whatsoever (rare, but sometimes proposed by purchaser).

Answer 39

Perfect Title

Question 40

________ __________ is great but Swanson is not really sure if it exists and no seller is going to agree to that.

Answer 40

perfect title

Question 41

As discerned from the public record. - Just means what is on the public record.

Answer 41

Record title

Question 42

Title such that a Title Company would insure (preferred by seller, could lead to unmarketable title if the insurance is inadequate.)

Answer 42

Insurable title

Question 43

If the document is silent ________ ________ is what is presumed.

Answer 43

marketable title

Question 44

A violation of a municipal regulation makes title unmarketable.
True or False

Answer 44

True. You don’t want to buy a lawsuit.

Question 45

Time is of the Essence: in equity, if parties fail to stipulate that “time is of the essence,” the courts will give a reasonable time for performance, but where the parties have stated that “time is of the essence” the Seller’s title must stand or fall as of that date. title defects cannot be _______ after the closing date without the purchaser’s consent.

Answer 45

cured

Question 46

_________ ____ _____ _____ ____________: in equity, if parties fail to stipulate that “time is of the essence,” the courts will give a reasonable time for performance, but where the parties have stated that “time is of the essence” the Seller’s title must stand or fall as of that date. Title defects cannot be cured after the closing date without the Purchaser’s consent.

Answer 46

Time is of the essence

Question 47

A violation of a private restriction, even if the restriction has been agreed upon, makes title unmarketable.
A. True
B. False

Answer 47

A. True

Question 48

Even if you have agreed upon the private restriction itself a violation of that restriction will make title ___________.

Answer 48

unmarketable

Question 49

“equity regards as done that which ought to be done” refers to what?

Answer 49

equitable conversion

Question 50

Equitable Conversion: “equity regards as done that which ought to be done”. The court looks at a specifically enforceable contract, and puts the parties where they have __________- to be.

Answer 50

bargained

Question 51

Equitable Conversion: “equity regards as done that which ought to be done”.The court looks at a specifically enforceable contract, and puts the parties where they have bargained to be.

In some states, the buyer is viewed in equity as the owner from the date of the ______ (holder of a ______ ________.)

Answer 51

contract

equitable title

Question 52

Many courts hold that the ___ _____ ______ is on the buyer from the moment of contract of sale, irrespective of the fact that the seller is still in possession until the closing.

Answer 52

risk of loss

Question 53

If ______ ____ _______ is on the buyer, it is advisable for the buyer to procure property insurance at the time of execution of the purchase agreement (contract of sale) .

Answer 53

Risk of Loss

Question 54

Equitable conversion - many places know you as the equitable owner from when you sign the ________ ________. What that means from a risk of loss standpoint means that you bear the risk of loss from that moment even if the seller is the one still occupying that property. Because of that it is important that you are covered with _________. Either the if something were to happen to the house while it is in the seller’s possession that the seller would be required to use the funds to rebuild or required to give to the buyer the funds or the buyer might get their own __________.

Answer 54

purchase agreement.

Insurance

Insurance

Question 55

Seller’s Duty to Disclose Defects: Majority Rule:

Answer 55

Seller has a duty to disclose Known material defects.

Question 56

Seller’s Duty to Disclose Defects: Majority Rule: Seller has a duty to disclose known material defects. Non-disclosure is equivalent to ______ or __________.

Answer 56

fraud or misrepresentation

Question 57

What is a material defect? One of two tests apply:
1. ?
2.

Answer 57

Whether a reasonable person would attach importance to the defect in determining whether to buy; or

Question 58

What is a material defect? One of two tests apply:
1.
2. ?

Answer 58

Whether the defect affects the value or desirability of the property to the buyer.

Question 59

Sellers have a duty to disclose known ________ _______ and if they don’t, it is equivalent to _________ or ___________.

Answer 59

material defects
fraud or misrepresentation

Question 60

The rule from the haunted house case is what?

Answer 60

You can only rescind if the seller created the reputation that the house was haunted and then failed to disclose to the buyer.

Question 61

The rule from the haunted house case is that you can only _______ if the seller created the reputation that the house was haunted and then failed to _______ to the buyer.

Answer 61

rescind

disclose

Question 62

General rule in most cases is that you don’t have to disclose that the property is ____________.

Answer 62

stigmatized

Question 63

Duty to disclose _____ ______ _______.

Answer 63

latent physical defects

Question 64

An “as is” clause in a sales contract will generally be upheld if:
1.
2.
3.

Answer 64

1. The defects are reasonably discoverable;
2. There is no fraud, however:
3. If there is a fraudulent misrepresentation or concealment of information by the seller, the buyer is not bound by the “as is” clause.

Question 65

An “as is” clause in a sales contract will generally be upheld if:
1. ?
2.
3.

Answer 65

1. The defects are reasonably discoverable

Question 66

An “as is” clause in a sales contract will generally be upheld if:
1.
2. ?
3.

Answer 66

2. There is no fraud, however:

Question 67

An “as is” clause in a sales contract will generally be upheld if:
1.
2.
3. ?

Answer 67

3. If there is a fraudulent misrepresentation or concealment of information by the seller, the buyer is not bound by the “as is” clause.

Question 68

Buyer beware. In the buyer context it is called:

Answer 68

caveat emptor

Question 69

Movement is to restrict _______ _______ and force people into disclosing what is wrong with the property because it wouldn’t be fair to lie about it and say the roof is great when it isn’t and con someone into buying something. Restricted caveat emptor and yes the seller has to disclose ____ ________.

Answer 69

caveat emptor

latent defects