Property II- JH - Justin Hoffman Property II Outline...

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Justin Hoffman Property II Outline Professor Zinman I Introduction A) Fee interest in property = ownership. Full legal ownership is fee simple. O to A and heirs. O to A for life then to A’s heirs. a. The rule in Shelly’s case - The court said it would convert a conveyance of a life estate with a remainder in the heirs into a fee simple conveyance, in order to ensure the payment of relief. b. Seisin – Right to possess property (freehold estates). The dignity of the right was called seisin. c. Livery of seisin – symbolic delivery of a clod of dirt from the owner to buyer. d. Words of purchase - Designate the person who takes the property by grant or devise, not descent. (O to A and his heirs, word of purchase is A) e. Words of Limitation - Words that describe the extent of the estate granted. “And his heirs” shows no limitation and a fee simple estate. f. Purchaser – a person who takes by purchase (UCC) g. Purchase – sale, discount, mortgage, gift, etc, any voluntary transaction creating an interest in property. h. Life Estates - To A for life – lasts as long as A lives. Valuation of a life estate. 1. Eminent Domain – the government must compensate the owner. Property is condemned and valued. Mortality tables are used to measure life expectancy. But the accuracy is not there when you’re evaluating a single person. Also, the interest has to be taken into account. i. Two types of words of limitations 1. Fee Simple Determinable – Automatic termination. So long as the property is used for school purposes – If not, the property automatically reverts back to Z. 2. Fee Simple Subject to a Condition Subsequent – Grantor has a right to re-enter and re-take the premises. 3. 6-61 EPTL – Fee simple absolute, Fee on a condition (condition subsequent), fee on limitation (determinable), for life, for years (years), estate from period to period (monthly tenancy), estates of will, estates by sufferance. II The Real Estate Transaction A) Process a. Contract – Represents an agreement to buy the property. The transaction is separated into two segments. 1. The state of title must be investigated for possible encumbrances. 2. There is then a period of due diligence in which the buyer can investigate the title. A loan will be necessary, and the bank will put lien on the property. b. Closing – After the “due diligence”, the actual purchase is consummated.
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B) Role of the Broker in the Transaction - In a majority of states, including NY: A broker earns a commission when he produces a buyer ready, willing and able to buy. If a contract is signed, that evidence is conclusive . In NY, you can’t earn the commission unless you’re a licensed broker. a. Minority rule : Tristram’s Landing (MA) case – The broker earns a commission only when the broker 1) the broker produces a ready, willing and able buyer on the seller’s time, 2) a contract is signed, and 3) the sale is consummated to closing. The exception is when the seller defaults on the sale.
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Property II- JH - Justin Hoffman Property II Outline...

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