Real Property- Land and sales contracts

Question 1

What are the remedies a seller has if buyer breaches sale contract?

Answer 1

• damages: Measure is the difference between the contract price and
  market price
  *recission: Seller can sell the property to someone else
• Specific Performance

Question 2

What remedies does the buyer have if the seller breaches sale contract?

Answer 2

Damages: Measure is the difference between the contract price and market value on the date of the breach
o What if the seller breaches but acts in good faith?
The buyer can only recover out-of-pocket expenses.
* Rescission: Returns payments to the buyer and cancels the
contract
* Specific performance

Note 27:Buyers and sellers must choose between damages and specific
performance—cannot have both remedies.

Question 3

Are land sale contracts subject to the Statute of Fraud?>

Answer 3

Yes. Land sale contract must:
1) be in writing
2) must be signed by the party to be charged
3) must include essential terms:
a) parties
b) description of the property
c)Price and payment info

Question 4

what are the exceptions to the statute of fraud?

Answer 4

Part performance: Part performance by either seller of buyer is treated as evidence of a contract even if there is no written contract:

Detrimental reliance (aka estoppel): Estoppel doctrine applies where the party has reasonably relied on the contract and would suffer hardship if the contract were not enforced. (even if the K wasn’t in writing as SOF requires)

Question 5

What are the acts that could demonstrate part performance?

Answer 5

Payment of all or part of the purchase price
Possession by purchaser
improvements to the property by purchaser

Question 6

What is a marketable title?

Question 7

What is a marketable title?

Answer 7

A title that is free from unreasonable risk of litigation.

Question 8

Which defects could render a title unmarketable?

Answer 8

adverse possession that hasn’t been quieted
Private encumbrances(mortgage covenant, easements)
Violation of zoning ordinance

Question 9

what is the remedy for the buyer if seller can’t present a marketable title?

Answer 9

Recission

Question 10

Is the failure to close on the date scheduled a breach>?

Answer 10

Yes it is a breach but not a cause for recession.
A basic rule is that,unless the contracts or the parties notify, time is not of the essence

Question 11

Which protections do buyers of new construction have>

Answer 11

Implied Warranty of Fitness or Suitability
This applies to defects in new construction
* In most jurisdictions, the initial homeowner-purchaser and subsequent purchasers may
recover damages.
* In a minority of jurisdictions, only the original buyer can enforce this warranty.
* Generally, a suit for breach of this warranty must be brought within a reasonable time after knowing of the defect (but some jurisdictions have a statutory time
period).

Question 12

Does the seller has a duty to disclose defects?

Answer 12

Yes. The ones are known to him.
Most jurisdictions impose a duty on the seller to disclose all known physical and material defects to the buyer.
* Concerned with latent or hidden defects;
* Material defect must substantially affect the value of the home, the health and safety of its occupants or the desirability of the home;
* General disclaimers (e.g., “as is”) will not satisfy the seller’s duty to disclose.

Question 13

Who bears the risk of loss?

Answer 13

Majority rule: Even if the seller still possess the property, the buyer has an equitable title during the period between the execution of the k and closing, therefore the risk of loss is on the buyer.

Minority rule: risk of loss is on the seller until closing and delivery of the deed.