purchase/sale of real estate Flashcards
purchase/sale of real estate
Every conveyance of real estate consists of a 2-step process.
- The land K
- The closing
purchase/sale of real estate
land K
The land K endures until the closing
- Land K and SoF
- Problem of risk of loss
- 2 implied promises in every land K
- Caveat emptor
purchase/sale of real estate
land K
land K and SoF
The standard: The land K must be 1) in writing 2) signed by the parties to be bound (buyer & seller), 3) must describe the land, and 4) state some consideration.
purchase/sale of real estate
land K
land K and SoF
If amount of land in land K is more than the actual size of the parcel
When the amount of land recited in the land K > the actual size of the parcel, B’s remedy is specific performance WITH a pro rata reduction in price.
purchase/sale of real estate
land K
land K and SoF
doctrine of part performance
Equity will decree specific performance of an oral K for land sale if the doctrine of part performance is satisfied.
The doctrine of part performance is satisfied if two of the three elements is met:
1. B takes possession.
2. B pays all or part of the price
3. B makes substantial improvements
purchase/sale of real estate
land K
problem of risk of loss
equitable conversion
destruction
purchase/sale of real estate
land K
problem of risk of loss
equitable conversion
Under the doctrine of equitable conversion, equity regards as done that which ought to be done.
In equity, once the K is signed, B owns the land subject to the condition that he pay the purchase price at closing.
The K provides equitable title
purchase/sale of real estate
land K
problem of risk of loss
destruction
If, in the interim between K and closing, Blackacre is destroyed through no fault of either party, B bears the risk of loss (unless the K says otherwise).
purchase/sale of real estate
land K
2 implied promises in every land K
Promise to provide marketable title
Promise to not make any false statements of material fact
purchase/sale of real estate
land K
2 implied promises in every land K
Promise to provide marketable title
Seller promises to provide marketable title at closing.
The standard
3 circumstances that render title unmarketable
purchase/sale of real estate land K 2 implied promises in every land K Promise to provide marketable title The standard
Title is free from reasonable doubt.
Title is free from lawsuits and the threat of litigation.
purchase/sale of real estate land K 2 implied promises in every land K Promise to provide marketable title 3 circumstances that render title unmarketable
Adverse possession
Encumbrances
Zoning violations
purchase/sale of real estate land K 2 implied promises in every land K Promise to provide marketable title 3 circumstances that render title unmarketable adverse possession
If even part of the title rests on adverse possession, it is unmarketable.
Seller must be able to provide good record title.
purchase/sale of real estate land K 2 implied promises in every land K Promise to provide marketable title 3 circumstances that render title unmarketable encumbrances
Marketable title means an unencumbered free simple.
The presence of any servitude will render title unmarketable unless buyer has waived them.
Seller has the right to satisfy an outstanding mortgage or lien at closing w/proceeds of the sale.
Buyer cannot claim title is unmarketable b/c it is subject to a mortgage prior to closing as long as the parties understand that the closing will result in the mortgage being satisfied or discharged.
purchase/sale of real estate land K 2 implied promises in every land K Promise to provide marketable title 3 circumstances that render title unmarketable zoning violations
Title is unmarketable when Blackacre violates a zoning ordinance. (This can make it subject to a lawsuit.)
