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2022 MBE > Property: Titles > Flashcards

Property: Titles Flashcards

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1
Q

Statute of Frauds requirement for a land sale contract ∑3

A

(a) must be in writing
(b) signed by the party to be charged
(c) must include essential terms

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2
Q

SoF for a land sale contract: “essential terms” requirement

A

parties, price and payment, and description of the property.

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3
Q

SoF for a land sale contract:

3 exceptions

A

(1) Part performance
(2) Full performance
(3) Detrimental reliance

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4
Q

SoF for a land sale contract: part performance

A

A performance by either seller or buyer may be treated as evidence that K existed if 2 of the 3 exist:

(1) payment of all or part of purchase price
(2) possession by the purchaser
(3) substantial improvement by the purchaser

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5
Q

SoF for a land sale contract: rescission

A

Rescission of a contract to transfer land need not be in writing.

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6
Q

Liability during land sale contract

A

In contract stage of the land sale contract, liability is based on a contract provision. In deed stage of the land sale contract, liability is based on a deed provision

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7
Q

Doctrine of merger in a land sale contract

A

Covenants under the contract are merged into the deed.

© not applicable to obligations that are collateral to and independent of the conveyance

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8
Q

Implied covenant of marketable title

A

Every land sale includes this.

A seller must deliver marketable title at closing. A defect in title must be cured/fixed before closing.

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9
Q

Marketable title

A

Title is marketable when it is free from unreasonable risk of litigation concerning title.

(e.g. unmarketable if adverse possession without quiet title, right of first refusal)

Marketable title is not a title without defects or encumberances. It is the UNDISCLOSED encumbrance that makes a title unmarketable

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10
Q

Seller right to cure a defective title

A

Buyer must give time to cure after closing, unless time is of the essence

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11
Q

Waiver of unmarketable title:

A

Buyer can waive title defects in the contract of sale or subsequently.

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12
Q

Remedies for unmarketable title

A

Buyer may sue for breach, rescind, or specific performance to get a discount.

Usually can’t do those until the date of closing.

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13
Q

Timing of closing

A

presumption that time is not of the essence (may delay closing date) and delay in closing is not a ground for rescission

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14
Q

Implied warranty of fitness/suitability:

A

applies to new residential construction. warrants that suitable materials are used in construction.

Initial H/O + subsequent purchasers may seek damages (§M)

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15
Q

Implied warranty of fitness/suitability: statute of limitation

A

reasonable time after the discovery of defect

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16
Q

Implied warranty of fitness/suitability: disclaimer

A

A general disclaimer (e.g., “property is sold as is”) is typically NOT sufficient.

may be disclaimed by the builder or waived by the homeowner if done so with language that is clear and unambiguous.

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17
Q

Seller duty to disclose defects

general
exception

A

Majority–A seller of a residential home must disclose to buyer all (a) known, (b) physical and (c) material defects.

© no duty if readily observable or not latent

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18
Q

Seller duty to disclose defect: material defect

A

a defect is material if it substantially affect the value of the home, health of occupants, desirability

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19
Q

Seller duty to disclose defect: disclaimer

A

A general disclaimer (e.g., “property is sold as is”) is sufficient in some states

© still not sufficient to preclude the seller’s liability for misrepresentation or fraudulent concealment.

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20
Q

Types of remedies in land sale contracts

A

(1) expectation damages
(2) rescission (to sell to someone else or to cancel K and return payment)
(3) specific performance

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21
Q

Measure of expectation damages in a land sale contract

A

the difference between the K price and the market price on the date of performance

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22
Q

Liquidated damages clause

A

generally enforceable if the amount of liquidated damages is reasonable.

Traditionally, deposit of 10% or less of the purchase price is reasonable.

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23
Q

Risk of loss if damage/destruction to property between execution of K and closing:

A

Majority—Buyer carries risk of loss © Loss is due to seller intentional/negligent actions;

Minority—Seller carries risk (Uniform Vendor and Purchaser Risk Act)

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24
Q

Doctrine of equitable conversion:

A

equitable title to real property passes to the buyer upon entering the contract, even though the seller retains legal title.

The seller effectively holds the property in trust for the buyer, and he has a duty to keep up the property.

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25
Q

Seller duty to carry insurance

A

Seller has no duty to carry casualty insurance on the property. But if seller has casualty insurance and the risk of loss is on the buyer, seller must give the buyer credit against the purchase price.

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26
Q

When seller dies after land sale contract, who has the ownership of the land?

A

Buyer, under the doctrine of equitable conversion

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27
Q

Doctrine of ademption

A

a devise of real property fails (or is “adeemed”) when the testator no longer owns the property upon death. Once adeemed, benecificiary gets nothing.

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28
Q

When seller dies after land sale contract, who owns the sales proceeds of the land contract?

A

Majority—the devisee of the seller-decedent’s personal property;

Minority (anti-ademption statutes)—the devisee of the seller-decedent’s real property.

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29
Q

A deed passes title upon

A

A deed passes title upon

(a) delivery and
(b) acceptance.

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30
Q

Deed: delivery requirement

A
  • Physical transfer not required.
  • Grantor must have the intent to make a PRESENT TRANSFER of the property.

e.g. Can transfer a future interest, but can’t intend that transfer of a deed be effective at death–An intent to have a transfer be effective at the grantor’s death is not valid in a deed unless the deed expressly reserves a life estate

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31
Q

Deed: delivery to grantee’s agent

A

presumption of delivery (that grantor had requisite intent) to make a present transfer

32
Q

Deed: delivery to grantor’s agent

A

presumption of no delivery.

Physical transfer not required. If transfer can be revocable, it’s not delivered.

Transfer is treated as if the grantor had retained the deed, even when the grantor has instructed the agent to deliver the deed to the grantee at some future time or upon the happening of an event

33
Q

Deed: acceptance

A

Acceptance of a deed is generally presumed if the transfer is for value

34
Q

Can real estate agents and brokers can prepare a contract of sale?

A

Yes

35
Q

Real estate agents and brokers can prepare a deed?

A

No

36
Q

Deed: content requirements

A

a valid deed must contain:

(a) identified parties
(b) signed by the grantor
(c) words of transfer and
(d) sufficient description of the property

37
Q

Deed: identified parties requirement

A

Majority—deed must identify the grantee in order to pass title.

Extrinsic evidence, however, can be admitted to identify the grantee.

38
Q

Deed: words of transfer requirement

A

Granting clause: a portion of a deed that contains the words that transfer an interest

39
Q

Deed: signature requirement—equal dignities rule

A

if the agent is required to sign (e.g. execute the deed), then the agency relationship must be created in writing.

40
Q

Deed: sufficient description requirement

A

Property is sufficiently described if it is reasonable definite.

It need not be a legal description. Extrinsic evidence is admissible to clarify

41
Q

Deed: forged signature

A

A deed that contains a forged grantor’s signature is void, even if relied upon by a bona fide purchase

42
Q

Deed: voidable deed

A

A deed is voidable if it is executed by a minor or incapacitated person or is obtained through fraud in the inducement, duress, undue influence, mistake, or breach of fiduciary duty.

© A voidable deed will be set aside only if the property has not passed to a BFP

43
Q

Deed: 3 types of deeds

A

general warranty deed, special warranty deed, quitclaim deed

44
Q

Deed: general warranty deed

A

Grantor warrants title against all defects.

Grantor guarantees that he holds 6 covenants of title: CN of seisin, CN of right to convey, CN against encumbrances, CN of quiet enjoyment, CN of warranty; CN of further assurances

45
Q

Deed: covenant of seisin

A

A present covenant that warrants that the deed describes the land in question.

46
Q

Deed: covenant of right to convey

A

A present covenant that warrants that grantor has the right to convey.

47
Q

Deed: covenant of encumbrances

A

A present covenant that warrants that there are no undisclosed encumbrances that would limit the property’s value

48
Q

Deed: covenant of quiet enjoyment

A

A future covenant that warrants that grantee’s possession will not be disturbed by a third party’s lawful claim for title

49
Q

Deed: covenant of warranty

A

warrants that Grantor will defend against future LAWFUL claims of title. must notify the grantor of the interference and grantor must refuse.

© grantor not required to defend against a wrongful claim. Grantee can only recover from the grantor when the title is defective.

50
Q

Deed: covenant of further assurances

A

A future covenant where grantor promises to fix future title problems

51
Q

Breach of present covenants of a warranty deed

A

occurs at the time of conveyance

52
Q

Breach of future covenants of a warranty deed

A

occurs only upon interference by third parties.

53
Q

Standing to enforce covenants in a warranty dead

A

Subsequent grantees can enforce future covenants (covenants of quiet enjoyment, warranty, further assurances)

54
Q

Remedies for breach of covenants in a warranty deed:

A

right to monetary damages, not right to possess.

55
Q

Deed: special warranty deed

A

warrants that grantor has not caused the title defect.

56
Q

Estoppel by deed (after-acquired property) doctrine

A

if a person purports to transfer property that she does not own, the subsequent acquisition of the property by the transferor automatically operates to transfer ownership of the property to the transferee.

57
Q

Validity of restraints on alienation

A

Absolute restraint on alienation is void.

Partial restraint is valid if it is for (a) limited time and (a) reasonable purpose.

58
Q

Transfer of property despite restraint on alienation

A

If a restraint on alienation is valid, any attempt to alienate the property is void.

If a restraint on alienation is void, the property can be alienated

59
Q

Right of first refusal: definition

A

A preemptive right that gives its holder the opportunity to acquire property prior to its transfer to another, and it is valid unless it is unreasonable

60
Q

Right of first refusal: validity

A

valid if it complies with the Statute of Frauds and the terms are reasonable.

61
Q

Right of first refusal: recording acts

A

subject to recording acts

62
Q

Right of first refusal: RAP

A

RAP applies to right of first refusal

© RAP doesn’t apply if

(1) granted to a current leasehold tenant or
(2) when the property right is created in a commercial transaction.

63
Q

Subjects that recording acts apply to

A

deeds, mortgages, leases, options, judgments affecting title, other instruments creating an interest in land such as easement, covenant

64
Q

Recording acts: race-notice statute

A

requires a subsequent purchaser to take the interest without notice of a prior conflicting interest and be the first to record.

65
Q

Recording acts: notice statute:

A

A purchaser who purchases without notice of the prior interest prevails

*(A purchaser need not record in order to prevail over a prior interest in a notice jurisdiction, but he must record to prevail against a subsequent purchaser.).

66
Q

Recording acts: race statute

A

a purchaser who records first prevails, regardless of his knowledge of any prior conflicting interests.

67
Q

Recording acts: protected parties

A

subsequent purchasers and grantees who paid value for an interest.

© Not grantees who acquire by gift, devise or descent

68
Q

Recording acts: mortgagees

A

Mortgagees are protected under recording acts unless mortgage is not given simultaneously with a loan

69
Q

Recording acts: creditors

A

Creditors are protected under recording acts only against claims that arise after a judgment against the debtor is recorded, unless statute says otherwise.

70
Q

Recording acts: estoppel by deed

A

Subsequent purchasers are protected against people who obtain title under estoppel by deed doctrine.

71
Q

Recording acts: adverse possession

A

subsequent purchasers are NOT protected from a property interest acquired by operation of law, such as a property interest acquired by adverse possession or prescriptive easement.

72
Q

Recording acts: shelter rule

exception

A

Grantors who are protected by recording act protect their grantees.

© Exception to shelter rule: purchaser who has notice of a prior interest can’t sell his interest to another without such notice and then buy back the property

73
Q

Recording acts: types of notice

A

actual notice, inquiry notice, constructive notice

74
Q

Recording acts: inquiry notice:

A

exists if a reasonable investigation would’ve disclosed the existence of a prior claim.

e.g. when someone else has possession of the property; when chain of title references a prior interest

75
Q

Recording acts: constructive notice

A

exists when prior conveyances are properly recorded

76
Q

Recording acts: wild deed

A

An exception to constructive notice.

A document may be filed with the recorder of deeds but be unconnected with a purchaser’s chain of title. The majority of jurisdictions hold such a wild deed does not impart record notice to purchaser.

77
Q

Fixture: whether an object can be removed by seller of property – factors

A

Factors:

  1. whether removable without damage (removable)
  2. whether item is specially designed for use with property (not removable)
  3. whether integral to function of the property (not removable).

2022 MBE (18 decks)

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