Real Estate BLL

Question 1

Who can waive the marketable title requirement in the real estate contract?

Answer 1

A
If a contract of sale is silent as to quality of title, the court will imply a marketable title, and an easement does affect the marketability of title. But while the seller has a duty to deliver a marketable title, the requirement of marketable title is for the benefit of the buyer. The buyer may waive the right to have a marketable title, which is what the buyer did in this case.

Question 2

Deed formalities and conveyance

Answer 2

(1) Writing and (2) Delivery

Writing: to satisfy SOF

Valid conveyance by deed requires formalities—writing signed by grantor, reasonably identifies parties (To all 한화팬&raquo_space; not good) and land

ii. Valid delivery of proper deed is a question of grantor’s intent to transfer presently + acceptance (직접 안건네줘도 상관없다)
2. Acceptance is presumed unless rejected. A deed to a deceased person is void
a. Cancelation or destruction of deed has no effect on title, will not return ownership until new deed delivered

Merger:
at closing, the real estate contract merges into the deed

Description of the property
must be reasonably definitive

Question 3

Types of deed

Answer 3

General warranty deed: Seller warrants that no title defects were created by himself and all prior titleholders. Premise for all 6 warranties since the property was created

1. 3 Present covenants (do not run w/ land, only immediate grantee can enforce): covenant of seisin (promise that he owns title and possesses), covenant of right to convey, covenant against encumbrances (no easements, covenants, unpaid mortgages or liens)
2. Future covenants (run w/ land, any future grantee can enforce): covenant for quiet enjoyment (promise that grantee won’t be disturbed by lawful claims of title), covenant of warranty (promise to defend vs. reasonable claims of title & compensate for any losses from superior claims), covenant for further assurances (promise to take reasonable steps to perfect defects of title)

ii. Special warranty deed: Seller warrants that no title defects have occurred during own ownership. Premise for all 6 warranties since the seller had title

iii. Quitclaim deed: Seller makes no warranties and conveys whatever interest he has, and you do not sue (quit + claim)

Question 4

Ademption

Answer 4

I have a property and leave it you by the will, but unfortunately I sold it while I was living. There was no property any more&raquo_space; you have nothing

Question 5

Lapse

Answer 5

I leave the property to you but you died before I die. The property will be possess by ‘residuary estate’

Question 6

Exoneration of lien

Answer 6

I leave the property to you and I died. Later, an estate found that there was encumberance onto the property. An estate pays off everything and you will get clean property

Question 7

Present possessory estates - rule against restraints on alienation

Answer 7

Invalid conditions: violate public policy, penalize marriage, promote divorce (OK to support until marriage/divorce)

Restraint on alienation: Public policy favors free alienability of property. . Any unreasonable language (e.g., indefinite restraint) are void

e.g. to her and, her heirs and assigns, provided, however, that said grantee may not transfer any interest in the land for 10 years from the date of this instrument.”

Question 8

Inquiry notice

Answer 8

Generally, under inquiry notice, if a grantee is aware of facts or circumstances that would lead a reasonable person to inquire further, she is charged with constructive knowledge of all the facts a reasonable investigation would have disclosed.

Question 9

Covenants

Answer 9

Promise to do or not to do stg on the property
Always created by the writing
Generally last forever, if it touches and concerns the land, not give to an individual

Writing
Intent
Notice
Privity
Touch and concerns the land

Question 10

Equitable servitude

Answer 10

Similar to the covenants
Seeks injunctive relief, injunction: not damages

Implied reciprocal servitude
Common scheme and notice (우리 단지의 문 색깔은 빨강!)

Question 11

Although the lender’s policy of title insurance ended when the loan was repaid, an owner’s policy of title insurance continues to protect the owner if the owner (here, the buyer) is sued on a title covenant in a future conveyance.

Question 12

An easement may render a title unmarketable, especially with the type that would benefit a neighbor rather than the property owner.

A seller has the right to satisfy a mortgage at the closing with proceeds of the sale. If the purchase price is sufficient, the closing results in a marketable title. The proceeds of the sale would satisfy the mortgage.

Question 13

Easement

Answer 13

The right to use someone else’s land (not title)

easement by writing
easement by prescription (adverse possession)
easement by necessity (dead end)
easement by implication (prior use)

An easement can last forever unless terminated (notice 여부 없이)

Termination
-agreement
-time
-merger (I have the right of easement and I bought that property)
-Abandonment (give up the right + express my intent)
– mere non use is not enough

An easement holder may enter the property to repair
Although the location of the easement was not in writing, the location was able to set by the neighbor’s 14-year use of a 15-foot strip on the west side of the man’s land.

Question 14

covenant for warranty

Answer 14

The covenant for warranty is a covenant wherein the grantor agrees to defend on behalf of the grantee any lawful or reasonable claims of title by a third party and to compensate the grantee for any loss sustained by the claim of superior title. The covenant for warranty is not breached until a third party interferes with possession of the grantee. The covenant is not breached by the grantor’s refusal to defend the title against a wrongful claim by a third party.

그러니까 만약에 누군가가 quite title claim을 걸었는데 이겼어. 그리고 그거에 대해 original owner 가 보상을 안해줬어. 그래도 상관없어 왜냐하면 covenant for warranty는 defect title에 의해 손해를 입었을때만 보상해주기 때문이지. 이 재판에서는 이겼으니까 defect title이 아니었던 거지

Question 15

tenant in common may bring an action to partition the property. Partition in kind, in which there is a physical division of the common property, is preferred; however, a partition by sale is allowed when a fair and equitable physical division of the property is impossible. Upon partition of the property, each co-tenant will receive either the ownership ratio in the land`

Question 16

assumption and subjec to the mortgage

Answer 16

The property can be sold without paying off the mortgage if the mortgage is assumed by the new buyer, who agrees to pay the seller’s (the original mortgagor’s) debt.

This is a novation if, in approving the assumption, the bank releases the old mortgagor and substitutes the buyer as the new debtor.

The buyer need not assume the mortgage. If the buyer purchases the property without agreeing to be personally liable, this is a sale “subject to” the mortgage. In default, the bank can foreclose the mortgage and sell the property that the buyer has purchased, but the subsequent buyer is not liable for any deficiency.

subsequent grantees do not become personally liable on the mortgage unless they explicitly assume the mortgage. Subsequent grantees can lose the land through foreclosure if the mortgage is not paid.

“subject to a mortgage to the bank, which the grantee assumes and agrees to pay&raquo_space; assumption and novation

subject to a mortgage&raquo_space; not assumption/novation

Question 17

When a contract for the sale of land calls for a buyer to deposit earnest money, the seller may retain that earnest money as liquidated damages in the case of a breach. However, if the deposit is so large that it is not a reasonable estimate of the seller’s actual damages, courts will generally refuse to enforce it on the grounds that it is a penalty. Here, the seller’s losses exceeded the amount of the earnest money, which would allow the seller to keep the earnest money as liquidated damages.

although the contract was silent regarding remedies, courts routinely uphold the seller’s retention of earnest money as liquidated damages.

Question 18

Landlords are often required to maintain received security deposits in an escrow account, and in the majority of states, the interest earned on the account belongs to the tenant, not the landlord.

Answer 18

The maximum amount of a security deposit is usually set by a state statute and generally ranges from one to two months’ rent.

Question 19

At any time prior to the foreclosure sale, the mortgagor has the right to redeem the land or free it of the mortgage by paying off the amount due, together with any accrued interest. A mortgagor’s right to redeem her own mortgage cannot be waived in the mortgage itself.

Answer 19

Although the brother and sister each independently own an undivided one-half interest in Greenacre, they chose to mortgage the property jointly. Therefore, the private lender holds a mortgage to all of Greenacre, for which the brother and the sister are jointly and severally liable. The joint mortgage represents a contractual agreement between the brother and the sister as a single entity on the one hand, and the private lender on the other. The sister’s making a payment of half of what is owed on the mortgage has the same legal effect as paying off half of any debt - the rest of the debt is still owed. To protect her one-half interest, the sister should have obtained a mortgage on only her own interest.

Question 20

Lien priority can be affected by the modification of the mortgage. Where there is both a senior mortgage and a junior mortgage, modifications to the senior mortgage that are detrimental to the junior mortgage, such as raising the interest rate or the principal amount, thus making it more burdensome, will give the junior mortgage priority.