Pg 50 Flashcards
When do you impose a lien on property?
To get recovery of the price that is owed
What happens if there’s a lien on property?
It results in foreclosure of the property if the buyer does not pay the rest of the balance. This is a judicially supervised sale to the highest bidder where the proceeds pay the seller and the surplus goes to the buyer. If there is a deficiency, then a personal judgement is entered for it
What is the only time that a lien on property is of value to the buyer?
Only if he has priority that is higher than competing interests. If there were competing interests that were created before the contract of sale was entered, and the buyer had notice, his lien is inferior.
When does a lien have priority over other interests?
If it was created after those interests, unless the holder took in good faith, for value, without notice of the contract [BFP]. If the contract has language that subordinates the buyer’s rights to those acquiring later interests, this priority can be lost
What are the two different types of rescission?
– mutual agreement to cancel the contract (this means they excuse one another and restitution is made for performance that was already done)
– one party unilaterally treats his duty as excused (and looks for judicial confirmation usually from something like mistake, misrepresentation, duress, undue influence, impracticability, frustration)
What are the two different types of real estate contracts?
– Marketing contract
– installment sale contract
What is a marketing contract?
A contract that specifies the price and other conditions of sale for a short period of time. The parties immediately transfer title with financing either through the seller or third-party lender. It is expected to be performed in a short time/couple of months, and doesn’t allow the buyer to take possession until legal title has passed by delivery of the deed. Once the full contract price is paid, the buyer gets possession and title at the same time.
What is an installment sale contract?
When the seller does the financing himself, and this means that the buyer does not get the deed until he has made all payments. It is like a mortgage that stays operative for 10 to 20 years while the buyer makes installment payments on the purchase price. When all or substantially all of the price is paid, the seller delivers the deed, but possession is taken many years before.
If the buyer breaches, the seller can keep the installments as rent or liquidated damages. This is not favoured by the courts so these are often treated as mortgages to avoid inequity
What is a deed?
An instrument in writing, executed and delivered, that conveys real estate
What is title?
Legal ownership of property
What are different ways that you can transfer real property?
Through a will, intestate succession, adverse possession, prescription, dedication, legislative acts of transfer, court decrees, eminent domain, removal of clouds on title, sale, etc
If you own property, what do you have?
Both the title and deed
What is a mortgage?
An instrument in writing that operates as security for a debt
What are the elements of a deed?
– In writing – identity of the parties – sufficient description of the property – words that indicate a present intent to convey – grantor’s signature
Is it necessary that the parties involved in a deed be specifically named?
No, an informal designation is OK if no innocent third parties are hurt by it. It must be reasonably understood who the parties are based on the evidence
If a deed says that land is being conveyed to the seller’s son, is that sufficient to identify the parties?
It depends on the situation. If he only had one son, it is OK
If a deed is delivered with the grantee’s name left blank, but the grantor knows or authorizes a person to fill it in, is that OK?
The deed is void until the name is inserted at a later date, and at that point the deed is OK. It’s still OK if the grantor dies before the name is written as long as the name does get inserted
If a deed is made out to a nonexistent grantee, what happens?
It is void. This could include: a dead grantee, heirs of a living grantee, corporations that haven’t been formed yet or have dissolved, etc.
What are different ways that you can sufficiently describe property in a deed?
– Complex legal descriptions of metes and bounds
– street address
– descriptive phrases such as “the Harris Ranch“
What is required for there to be a sufficient description of the property in a deed?
It must be possible for a person of ordinary intelligence and understanding to successfully use the description to locate and identify the property
If there is a discrepancy between the deed description of the land and the actual property, what happens?
It is not fatal if the property can be identified with sufficient certainty
If you own a parcel of land on State Street, but the deed says that it is .5 acres when it is actually only .25 acres, is that still a sufficient description of the property for the deed to be valid?
Yes, as long as the address was correct. It is OK if the land is smaller than indicated
If a description of land is so vague that you cannot identify the property, is that enough for the deed to be valid?
No
What is a mother Hubbard clause?
“Grant all my land in California“
