Property II- Final Outline 1. Chapter 8- The Sale of Real Property 1. The Purchase Contract 1. The conveyance of real property involves two steps: 1. Step 1: The parties enter into a contract of sale (contract principles apply) 1. The contract of sale exists from the moment it is signed until the deed is transferred at closing. This period is called the escrow period 2. Step 2: During the closing, the property is actually conveyed (so real property concepts control) 2. Statute of Frauds 1. Required components of a land sales contrac t 1. Essential terms 1. Identification of the parties (both must typically sign the document) 2. Identification of the land (Does not have to be a formal, legal description, but must be sufficient to identify the property without ambiguity) 3. Price (if none provided, the court may assume a reasonable price) 2. Writing 3. Signature by the party sought to be bound 2. Any oral contract for the sale of land is generally unenforceable, but there are two exceptions: 1. Part Performance 1. To establish part performance of an oral contract, a party must satisfy two requirements: 1. The oral contract is certain and clear 2. The acts of partial performance must clearly prove up the existence of a contract 1. Acts that prove up an oral contract 1. Paid all or part of the purchase price 2. Made substantial improvements; and/or 3. Taken possession 2. Estoppel : focuses equity between parties. A court will enforce the oral agreement if: 1. A buyer substantially changes his position in reliance on an oral promise by the seller and 2. The buyer will be substantially injured if specific performance is not granted 3. Marketable Title 1. Unless otherwise waived by the parties, every land contract includes an implied covenant to provide marketable title 1. Marketable title is that which is free from reasonable doubt. A title is not free from doubt or marketable if it exposes the purchaser to the hazards of
litigation 2. A “marketable title” is one that can be held or possessed in peace and quiet. A title which has no defects if a serious nature, and none which affect the possessory title of the owner 1. Key: The defect must be substantial and one from which the party may suffer injury 2. The question of whether a title is marketable is one of law for the court to determine, and the court looks at issues that affect the possessory title of the owner, including: 1. Covenants 2. Easements 3. Leases 4. Liens 5. Boundary Disputes 6. Gaps in the chain of title 7. Adverse Possession 3. A seller lacks marketable title if: 1. She does not own the estate she is purporting to sell; 2. Her title is subject to an encumbrance; or 3. There is reasonable doubt as to (1) or (2) 4. Private Encumbrance 1. Majority Rule: The presence of any encumbrance makes title unmarketable 5.
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- Fall '08
- Real property law