Warranty Flashcards
When does the implied warranty of habitability and fitness for a particular purpose apply?
Only to residential leases by tenant and new construction by a builder or developer.
Is a subsequent buyer protected under an owners title insurance policy?
No. Only the owner is covered and insured.
What is the warranty for marketable title and consider zoning and building violations?
The warranty of marketable title is implied in all land sales contracts. This warranty requires the seller to provide a marketable title to the buyer on (but not before) the closing date. To be considered marketable, the title must be free of encumbrances, such as mortgages, restrictions, covenants, easements, or other limiting provisions that are not explicitly identified in the contract. Defects that render title unmarketable include the inability to establish a record chain of title and private restrictions. Zoning restrictions do not make title unmarketable, but zoning violations will make title unmarketable. In this case, it is unclear whether or not the subdivision restrictions apply to the unnumbered parcel, but if they do apply, they constitute encumbrances on the title
The warranty of marketable title is implied in all land sales contracts. This warranty requires the seller to provide a marketable title to the buyer on (but not before) the closing date. To be considered “marketable,” the title must be free of encumbrances, such as mortgages, restrictions, covenants, easements, or other limiting provisions that are not explicitly identified in the contract. Further, in establishing whether an encumbrance exists with regard to local codes or ordinances, it is important to distinguish between building codes and zoning laws. A property being in violation of the building code is not considered an encumbrance, and title to that building is marketable. In contrast, where a property is in violation of zoning laws, the violation is considered an encumbrance and the title is unmarketable. In this case, the warranty of marketable title will be implied in the seller and buyer’s contract.
A is incorrect. There is no requirement that the warranty be explicitly referenced in the deed.
C is incorrect. By entering the contract, what the seller has warranted is simply that he will convey marketable title on the closing date.
