Real Property - Property Ks & Mortgages

Question 1

Valid Deed Delivery

Answer 1

1) Proper Execution
2) Intent
Physical possession not necessary.

Question 2

Common Law Equitable Conversion

Answer 2

Risk of loss for casualty is placed on the buyer during the executory period. Buyer is equitable owner of the land. Seller holds legal title & is equitable owner of the right to the full purchase price. Shifts burden and benefits to purchaser.

Question 3

Uniform Vendor & Purchaser’s Risk Act

Answer 3

Risk of loss is on buyer only if he has legal title or possession of the property.

Question 4

Marketable Title

Answer 4

Every contract for the sale of land contains an
implied warranty of marketable title.
Encumbrances: 
1. Mortgage
2. Lien
3. Easement
4. Equitable servitude
5. Zoning violation (not restrictions)
6. Future interest

Question 5

Bona Fide Purchaser (BFP)

Answer 5

1. Pays value (purchaser, mortgagee, judgment creditor) (getting by will doesn’t count)
2. Takes in good faith” and
3. Takes without notice (key MBE element)

Question 6

Recording Statutes

Answer 6

Race – 1st to record wins
Notice – last BFP wins
Race – Notice – 1st BFP to record wins

Question 7

Rights of a Grantee

Answer 7

Grantee who “assumes” a mortgage is personally liable.
Grantee who takes “subject to” the mortgage is not personally liable. Where the deed makes no reference to the mortgage, it is presumed the grantee takes “subject to” and is not personally liable.

Question 8

Purchase Money Mortgage

Answer 8

A purchase money mortgage takes priority over other prior mortgages, regardless of recording statutes. Even priority over homestead or others recorded 1st. The purchase money mortgage itself, however, must be recorded.

Question 9

Exoneration

Answer 9

The right of a surety to compel the mortgagee to proceed first against the person or property primarily liable.

Question 10

Mortgage Deed Requirements

Answer 10

1) identity of parties
2) description of property; &
3) intent to create a security interest

Question 11

Senior Mortgage Modification

Answer 11

Junior mortgage prevails if modification materially prejudices holder of junior mortgage (ex: increasing amount of principal or increasing interest rate)

Question 12

Transfer of property “subject to mortgage”

Answer 12

If mortgage payments aren’t made, mortgagee can foreclose & force sale of property. Transferee of property doesn’t have personal liability for debt.

Question 13

Transferee of property “assumes mortgage”

Answer 13

If mortgage payments not made, mortgagee may foreclose and force property sale. Can have personal liability.

Question 14

Foreclosure v. Redemption

Answer 14

Foreclosre (seller’s remedy) - ability to get one’s security interest back after non-payment
Redemption (buyer’s remedy) - ability to get one’s property back after payment has come due

Question 15

Doctrine of Part Performance

Answer 15

May be used to enforce an otherwise invalid oral land contract. Requirements: buyer must show:

1) he paid all or part of the purchase price,
2) took possession of the land,
3) and made valuable improvements.

Question 16

Purchase Money Mortgage

Answer 16

Mortgage given to a vendor of the real estate or to a 3rd-party lender to the extent that proceeds of the loan are used to acquire title to the real estate, or construct improvements on the real estate if the mortgage is given as part of the same transaction in which title is acquired.