Transfers of Land Flashcards
• 3 things buyers do to protect themselves:
(1) Look at parcel (may need survey) (2) Get promises from seller (3) Get insurance policies from title company
Recording Deed
recorded at court house. It’s constructive notice of your ownership to the words.
Title Insurance
Makes sure seller really does own the land
Statute of Frauds (RE)
Requires that deeds and real estate contracts be in writing and signed by the person to be bound
• Essential requirements of a writing: identification of the parties, description of the property, the price or a method to determine the price, and an intention to convey the property
2 exceptions to Statute of Frauds in RE
- Part performance: allows the specific enforcement of oral agreements when particular acts have been performed by one of the parties to the agreement
o Purchase does a combination of: pays the contract price, takes possession of the property, improves the property - Estoppel: applies when unconscionable injury would result from denying enforcement of the oral contract after one party has been induced by the other to seriously change his position in reliance on the contract
Hickey v. Green
Oral K to buy D lot. In reliance, P sold house then D backed out.
HELD - doesn’t meet SoF, but new rule for oral ks
Hickey v. Green Oral K rule
an oral contract for the transfer of real estate may be specifically enforced despite the Statute or Frauds stating needs to be in writing, if the party seeking performance changed his position in reliance on the contract and injustice can be avoided only through specific performance
Need a writing except when partial performance- important because evidence of underlying contract and have notion of fairness, have done part of the bargain and unfair if the other party could be able to get out of it
Promisee must act in reasonable reliance on the promise before the promisor has repudiated it
Specific Performance in RE
courts traditionally limited to money damages as opposed to specific performance. If buyer brings suit for specific performance and court finds for buyer specific performance is the usual remedy
Marketable Title
a title free from reasonable doubt as to the promised title’s validity. Unmarketable means litigation possible. This is an implied condition of a K of sale.
Any encumberance makes a title unmarketable.
Lohmeyer v. Bower
parcel on lot in violation of city ordinances. Holding - any encumbrance makes title unmarketable- the existence of a restrictive covenant makes title unmarketable
Duty to Disclose Defects
purchasers can rescind the sales contract or seek damages if the seller does not disclose known material latent defects in the condition of the land or improvements. Can bring claim on fraudulent misrepresentation.
Latent defects - Seller is obligated to disclose conditions that 1))materially impair property value, 2) known to the seller (or only acessible to the seller)3)not likely to be discovered by a reasonably prudent buyer using due care -
Determining if defect is actionable
defect mus be material - 2 tests:
o 1. An objective test of whether a reasonable person would attach importance to it in deciding to buy
o 2. A subjective test of whether the defect “affects the value of desirability of the property to the buyer”
Stambovsky v. Ackley
Haunted House. where a condtion materially impairs the value of the contract and is only within the knowledge of the seller and unlikely to be discovered by a purchaser, nondisclosure constitutes a basis for recession as a matter of equity
Johnson v. Davis
Rood leaked and not disclosed to buyer. Court held that Davises (purchasers) could rescind bc 1)johnson said roof was sound = fraud, 2) johnson obligated to disclose any facts known to him, or accessible only by him, that materially affect the value or desirability of the property
Stigma Statute
shield sellers from a failure to disclose psychological or prejudicial factors that might affect market value, such as a murder w/in the house or that a former occupant dies of AIDS
Implied Warranty of Quality
when a builder sells his structures, a warranty of workmanlike quality is implied by law and runs for the benefit of subsequent purchasers with respect to latent defects that become apparanet after the remot purchaser has acquired title, and which couldn’t have been discovered prior to the remote purchasers acquisition
Lemke v. Dagenais
Dagenais built garage for owners of property who sold it to Lempkes, who later noticed severe structrual problems. Sued for implied warranty of quality and won.
Warranties of Title
specific promises made by sellers to buyers
Essential elements required in order for an instrument to be a conveyance
Grantor, Grantee, Words of grant, Description of land involved, Signature of grantor, Sometimes attestation or acknowledgment
What must a deed include:
description of the parcel of land conveyed that locates the parcel by describing its boundaries
3 types of deeds:
- General warranty deed: warrants title against all defects in title, whether they arose before or after the grantor took title
- Special warranty deed: contains warranties only against the grantor’s own acts but not the acts of others.
- Quitclaim deed: contains no warranties, merely conveys whatever title the grantor has and if the grantee takes nothing by the deed the grantee cannot sue the grantor.
Equitable Title
Doctrine holds that equitable ownership of the subject property passes to the buyer at the moment the sale is made
Future covenant
promises that the grantor will do some future act. A future covenant is not breached until the grantee or his successor is evicted from the property, buys up the paramount claim, or is otherwise damaged.
Brown v. Lober
Bost conveyes 80 acres to brown under general warranty deed, even though bost only owned 1/3 of mineral rights. Later agreed to sell the rights, but was forced to accept $2,000 (instead of $6,000) once it was learned that Brown owned only 1/3. SoL had run on covenant. Brown sued for costructive eviction . Held - mere existence of paramount title does not constitute breach of covenant of quiet enjoyment.No constructive eviction until one holding paramount title interferes, and he couldve taken peaceful posession. Moral to case - failed to get title inspectection and failed to get title insurance.
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