Real Estate Contracts

Question 1

How to satisfy Statute of Frauds for a Real Estate Contract?

Answer 1

1. put contract in writing, OR
2. part performance → must show at least TWO of the following: (1) make partial payment; (2) make substantial improvements; (3) take possession of the land

Question 2

Real Estate Contract Terms

Answer 2

1. Price
2. Parties
3. Description of the parties
4. Conditions
5. Signed by the party to be charged

Question 3

Equitable Conversion

Answer 3

= on the day parties sign the Real Estate K, Buyer only gets equitable title (NOT the legal title)

*means the risk of loss shifts to Buyer

*also means technically the Seller doesn’t have to have legal title on signing day – just by the closing day

Question 4

Marketable Title

Answer 4

= Seller’s implied covenant to Buyer to convey title free of encumbrances (NO liens, mortgages, zoning violations)

“Marketable Title” always refers to the Real Estate K (NOT the legal title/deed)

Question 5

Generally, in a Real Estate Contract, is time of the essence?

Answer 5

→ NO, time is generally NOT of the essence – UNLESS stated in the Real Estate K

Question 6

Merger

Answer 6

= on Closing Day, the Real Estate Contract’s terms MERGE into the Deed

*after Merger occurs, a party would have to sue on the Deed – could NOT sue on the Real Estate K (b/c it’s been merged into Deed)

Question 7

Seller’s Duty to Disclose

Answer 7

= Seller has duty to disclose material defects that CANNOT be seen by the Buyer (e.g., broken plumbing in the walls)

(but if material defects can be seen by Buyer, no duty to disclose – e.g., crack in the kitchen ceiling)