Transfers of Land

Question 1

• 3 things buyers do to protect themselves:

Answer 1

(1) Look at parcel (may need survey) (2) Get promises from seller (3) Get insurance policies from title company

Question 2

Recording Deed

Answer 2

recorded at court house. It’s constructive notice of your ownership to the words.

Question 3

Title Insurance

Answer 3

Makes sure seller really does own the land

Question 4

Statute of Frauds (RE)

Answer 4

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

Question 5

2 exceptions to Statute of Frauds in RE

Answer 5

1. 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
2. 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

Question 6

Hickey v. Green

Answer 6

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

Question 7

Hickey v. Green Oral K rule

Answer 7

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

Question 8

Specific Performance in RE

Answer 8

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

Question 9

Marketable Title

Answer 9

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.

Question 10

Lohmeyer v. Bower

Answer 10

parcel on lot in violation of city ordinances. Holding - any encumbrance makes title unmarketable- the existence of a restrictive covenant makes title unmarketable

Question 11

Duty to Disclose Defects

Answer 11

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 -

Question 12

Determining if defect is actionable

Answer 12

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”

Question 13

Stambovsky v. Ackley

Answer 13

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

Question 14

Johnson v. Davis

Answer 14

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

Question 15

Stigma Statute

Answer 15

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

Question 16

Implied Warranty of Quality

Answer 16

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

Question 17

Lemke v. Dagenais

Answer 17

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.

Question 18

Warranties of Title

Answer 18

specific promises made by sellers to buyers

Question 19

Essential elements required in order for an instrument to be a conveyance

Answer 19

Grantor, Grantee, Words of grant, Description of land involved, Signature of grantor, Sometimes attestation or acknowledgment

Question 20

What must a deed include:

Answer 20

description of the parcel of land conveyed that locates the parcel by describing its boundaries

Question 21

3 types of deeds:

Answer 21

1. 1. General warranty deed: warrants title against all defects in title, whether they arose before or after the grantor took title
2. 2. Special warranty deed: contains warranties only against the grantor’s own acts but not the acts of others.
3. 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.

Question 22

Equitable Title

Answer 22

Doctrine holds that equitable ownership of the subject property passes to the buyer at the moment the sale is made

Question 23

Future covenant

Answer 23

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.

Question 24

Brown v. Lober

Answer 24

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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Question 25

Frimberger v. Anzellotti

Answer 25

marsh land sold by quit claim later sold by general warranty deed was in violation of enviro ordinance. Suit was on violation of covenant against encumberances. HELD - covenant not breached in violation of public land use controls.

Question 26

Covenant against encumberances

Answer 26

Only breached if there is private encumberance (easement or mortgage), covenant not breached by existence of public land use controls.

Question 27

Recording Acts

Answer 27

1) Race Acts - earliest to record prevails
2) notice acts - later bona fide purchaser w/o notice of prior unrecorded grant prevails of the prior grantee, whether or not the later grant is recorded
3) race notice acts - only those bona fide purchasers who 1)lack notice of a prior unrecorded grant, 2)record first prevail over the first frantee

Question 28

Omnibus or Mother Hubbard clauses

Answer 28

inserted in a deed to a single parcel cover all other property of the grantor. BC there is no way a diligent searcher of title to the other property will ever find it, usually inadequate to provide notice (Luthi v. Evans)

Question 29

Orr v. Beyers

Answer 29

Elliott name spelled wrong - idem sonum doesn’t apply (applied differently in different states - a lot of times you’re on notice that you need to search if name starts with same first letter and sound alike)

Question 30

Messersmith v. Smith

Answer 30

notorizer screwed up, but holding to prevent forgery and fraud

Question 31

marketable title acts

Answer 31

enacted in states to limit title searches to a reasonable period (last 30-40 years) helps extinguish inconsistent claims.

Question 32

Title Insurance

Answer 32

insures validity of title as determined by insurance company as determined by public record. Mortgage company and seller usually buy it.

• usually insures only that the title stated in the policy is god record title, and doesn’t insure against claims nor part of the record
• duty to disclose defects - about half of states impose a duty on title insurers to disclose all defects uncovered by the insurer’s title search, even if K says “encroachments not of record” and discovers an actual unrecorded encroachment.

Question 33

title insurance: mkt title and encumberences

Answer 33

Title insurance policies don’t usually insure against any loss caused by defects in title, or liens, or encumberences, or unmaketability, cts limit scope of coverage tot title rather than extending it to cover palpable dimunitions in value that don’t impact ownership

Question 34

– Lick Mill Creek Apts v. Title Insurance Co.

Answer 34

Toxic stuff on land, which imposed duty to clean up after pruchase. difference b/w unmarketable title (consists of serious problem with the claim of ownership) and unmarketable land (serious problems with physical location of property). Ex post sale - would unfairly shift costs and increase cost of titleinsurance.

Question 35

Difference b.w unmarketable title cases

Answer 35

Lohmeyer - zoning unmarketable - ex ante, inchoate
Frimberger - enviro law not unmarketable title - after sale
Lick Mill - ex post