Land Transactions Overview
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Questions and Answers

What is the covenant of general warranty primarily concerned with?

  • The grantor will execute any needed documents.
  • The grantor will defend against lawful claims. (correct)
  • The grantor will not breach present covenants.
  • The grantee will not be disturbed by lawful claims.

Which future covenant ensures that the grantee can enjoy the property without disturbance?

  • Covenant of general warranty
  • Covenant of quiet enjoyment (correct)
  • Covenant of title assurance
  • Covenant of further assurances

Under which mortgage theory does the lender take title to the land?

  • Lien theory
  • Title theory (correct)
  • Agent theory
  • Equity theory

What happens under lien theory when a borrower defaults on a mortgage?

<p>The mortgagee cannot take possession until foreclosure. (D)</p> Signup and view all the answers

What is an installment contract for land primarily characterized by?

<p>The buyer receiving title after all payments are made. (A)</p> Signup and view all the answers

What does foreclosure allow the lender to do?

<p>Force the sale of collateral property. (C)</p> Signup and view all the answers

What is a characteristic of constructive delivery of a deed?

<p>It involves the intent for the deed to be effective. (A)</p> Signup and view all the answers

Which of the following is NOT a future covenant associated with general warranty deeds?

<p>Covenant of maintenance (C)</p> Signup and view all the answers

What is a common requirement for a real property transaction to comply with the statute of frauds?

<p>It must be in writing and signed by the party to be bound (A)</p> Signup and view all the answers

What is part performance in relation to the statute of frauds?

<p>Satisfactory evidence of the contract with detrimental reliance by the injured party (B)</p> Signup and view all the answers

What constitutes marketable title in a real estate transaction?

<p>It entails a title not subject to doubts that create apprehension of validity (C)</p> Signup and view all the answers

Which of the following is true about encumbrances and marketable title?

<p>A zoning ordinance does not affect marketable title (D)</p> Signup and view all the answers

In the context of equitable conversion, who bears the risk of loss during the executory period?

<p>The buyer is regarded as having equitable title and bears the risk of loss (C)</p> Signup and view all the answers

What obligation does a seller have under modern law regarding defects in property?

<p>To disclose any latent defects or face liability for fraud (B)</p> Signup and view all the answers

Under common law, when does a seller have liability regarding the disclosure of defects?

<p>If there is an affirmative misrepresentation by the seller (B)</p> Signup and view all the answers

What can an injured party pursue if an oral contract is violated due to reliance on the seller's agreement?

<p>Equitable estoppel (B)</p> Signup and view all the answers

Under what condition is spot zoning deemed invalid?

<p>When it only benefits a single landowner. (D)</p> Signup and view all the answers

What is a reason why aesthetic regulations are considered valid today?

<p>They have a substantial relation to public safety and welfare. (B)</p> Signup and view all the answers

Which statement about household composition controls is accurate?

<p>They generally limit occupancy by unrelated persons in single-family zones. (B)</p> Signup and view all the answers

What is a characteristic of exclusionary zoning?

<p>It limits access to certain housing types for public safety. (D)</p> Signup and view all the answers

What does the Takings Clause mandate regarding eminent domain?

<p>Private property cannot be taken without just compensation. (A)</p> Signup and view all the answers

Which definition best describes 'public use' under the Takings Clause?

<p>Property that serves a public purpose or benefit. (C)</p> Signup and view all the answers

Which of the following is a reason that an aesthetic regulation could be deemed invalid?

<p>It is arbitrary and capricious in nature. (C)</p> Signup and view all the answers

What is true about the rational basis for public use in zoning?

<p>It should be related to the public's safety, health, and welfare. (B)</p> Signup and view all the answers

What must states do to enable local governments to exercise zoning power?

<p>Delegate police power to local governments through statute (D)</p> Signup and view all the answers

Which of the following statements about nonconforming use is true?

<p>Destruction eliminates nonconforming use. (C)</p> Signup and view all the answers

What must be demonstrated to obtain a variance?

<p>Proof of undue hardship (C)</p> Signup and view all the answers

What distinguishes a special exception from a variance?

<p>Special exceptions must be explicitly included in the zoning ordinance. (B)</p> Signup and view all the answers

What characterizes spot zoning?

<p>It singles out one parcel of land for special treatment. (A)</p> Signup and view all the answers

Under what circumstances can a nonconforming use be continued?

<p>If the property has not been abandoned (A), If it was established before the zoning ordinance took effect (C)</p> Signup and view all the answers

Which of the following is NOT a requirement for possession in adverse possession?

<p>Possession is temporary (D)</p> Signup and view all the answers

What is the primary requirement for the validity of a zoning amendment?

<p>It must be within the police powers of the government (D)</p> Signup and view all the answers

What type of zoning change does a variance specifically address?

<p>Adjustments due to undue hardship (A)</p> Signup and view all the answers

What is the purpose of 'tacking' in adverse possession?

<p>To combine the possession time of successive owners (A)</p> Signup and view all the answers

What happens to the statute of limitations when the property owner suffers from a disability?

<p>It is paused until the disability is removed. (A)</p> Signup and view all the answers

Which type of servitude specifically grants the right to use the land of another?

<p>Easement (B)</p> Signup and view all the answers

Which of the following correctly defines nuisance in the context of land use?

<p>Substantial interference caused by a person's use of their property (A)</p> Signup and view all the answers

What does the remedy of an injunction do in the context of nuisance?

<p>It orders the cessation of the nuisance. (A)</p> Signup and view all the answers

Which of the following conditions must be met for a case of adverse possession of chattels to arise?

<p>The injured party must discover the cause of action or should have discovered it by reasonable diligence. (D)</p> Signup and view all the answers

Which of the following is NOT a type of disability that can pause the statute of limitations for adverse possession?

<p>Relocation (B)</p> Signup and view all the answers

What is required for a defect to be disclosed by the seller?

<p>The defect must be material. (D)</p> Signup and view all the answers

Under which standard is the importance of a defect determined by its effect on the value of the property?

<p>Subjective standard (B)</p> Signup and view all the answers

What happens when a buyer accepts a deed under the merger doctrine?

<p>All contractual obligations are deemed satisfied. (A)</p> Signup and view all the answers

What are the general remedies available for a breach of a sales contract?

<p>Damages, rescission, specific performance (B)</p> Signup and view all the answers

Which type of deed warrants title against defects arising before or after the grantor took title?

<p>General warranty deed (B)</p> Signup and view all the answers

Which covenant in a general warranty deed guarantees the grantor owns the property?

<p>Covenant of seisen (D)</p> Signup and view all the answers

Which type of damages compensates for the loss due to breach of contract?

<p>Compensatory damages (B)</p> Signup and view all the answers

What type of deed does not provide any warranties and is offered 'as is'?

<p>Quitclaim deed (D)</p> Signup and view all the answers

Flashcards

Statute of Frauds

A law requiring certain contracts, including real estate transactions, to be in writing, signed by the parties, and include a property description and price.

Part Performance

A legal doctrine allowing a court to enforce an oral contract for real estate if there's sufficient evidence of the agreement and one party has relied on it to their detriment.

Equitable Estoppel

A legal doctrine where a court prevents someone from going back on their promise if another party reasonably relied on it to their detriment, even if the promise wasn't in writing.

Marketable Title

A property title free from legal encumbrances, ensuring the seller can legally transfer ownership to the buyer.

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Encumbrance

Any right or interest in land that diminishes its value, like a mortgage, easement, or restrictive covenant.

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Equitable Conversion

A legal concept where a buyer in a real estate contract gains equitable ownership and bears the risk of loss, even before legal title is transferred.

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Caveat Emptor (Buyer Beware)

A legal principle where the buyer is responsible for inspecting the property and identifying defects, with no duty on the seller to disclose them.

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Duty to Disclose Defects

Modern real estate law requiring sellers to disclose known latent defects. This is a shift from the 'buyer beware' principle.

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Future Covenants

Promises made by the grantor in a deed that guarantee the grantee's ownership and possession of the property, but only apply in the future if the grantor fails to fulfill their obligations.

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Covenant of General Warranty

A promise by the grantor to defend the grantee's title against any legal claims and compensate them for any losses due to a superior title.

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Covenant of Quiet Enjoyment

A promise by the grantor that the grantee will not be disturbed in their possession and enjoyment of the property by a superior title.

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Covenant of Further Assurances

A promise by the grantor to execute any necessary documents to perfect the title conveyed to the grantee.

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Title Theory

A mortgage theory where the lender (mortgagee) takes legal title to the property and the borrower (mortgagor) holds the right to redeem the property by repaying the loan.

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Lien Theory

A mortgage theory where the borrower holds legal title to the property and the lender has a lien (a claim) on the property as security for the loan.

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Installment Contract for Land

A contract where the buyer takes possession of the property but the seller retains legal title until the buyer makes all the installment payments.

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Foreclosure

The legal process by which a lender can force the sale of a property to recover unpaid debt from a defaulting borrower.

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Spot Zoning

Zoning amendment that singles out a small parcel of land for special treatment, often favoring one landowner over the public interest.

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Aesthetic Regulation

Zoning regulations that control the visual appearance of property, focusing on aesthetics like architecture or landscaping.

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Household Composition Controls

Zoning regulations that limit the number of unrelated people who can live in a residential zone.

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Exclusionary Zoning

Zoning that aims to exclude certain groups of people by limiting access to certain housing types, often targeting lower-income or marginalized groups.

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Eminent Domain

Government's right to take private property for public use with just compensation.

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Takings Clause

Fifth Amendment provision restricting the government's power to take private property for public use without fair compensation.

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Public Use

The purpose for which property is taken under eminent domain, benefiting the public in various ways.

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Rational Basis

A legal standard requiring a reasonable justification for a government action, typically used in zoning cases.

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Zoning Constitutionality

Zoning is legal if it's related to public safety, health, welfare, or morals. Courts will defer to legislature if validity is reasonably debatable. Zoning is presumed valid, and a lack of rational basis is needed to prove otherwise.

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State Role in Zoning

States must give local governments power to zone through statutes. Local governments must follow a comprehensive plan for land use management.

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Comprehensive Plan

A 'master plan' for a community that sets out a vision for infrastructure, public works, housing, and land use through text and maps.

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Nonconforming Use

A legal existing use of property that is allowed to continue even after zoning changes prohibit it. However, it usually can't be expanded or altered. Abandonment or destruction ends it.

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Variance

An authorized departure from zoning rules for unique hardship. It runs with the land and requires proof of undue hardship. Types include use variance and area variance.

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Area Variance

An adjustment to site, density, or dimensional requirements in a zoning ordinance. Requires balancing the purpose of the restriction, its effect on the property, and the impact on the neighborhood.

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Special Exception

Permitted use in a zoning ordinance, like allowing a hospital in a residential area.

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Zoning Amendment

A legislative change to zoning ordinances that is presumed valid and subject to the rational basis test. Spot zoning focuses on one particular parcel for special treatment.

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Adverse Possession Requirements

To claim land through adverse possession, one must meet five conditions: actual, exclusive, open & notorious, adverse/hostile under a claim of right, and continuous & uninterrupted possession.

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Tacking in Adverse Possession

Multiple periods of possession by different owners can be combined to meet the statute of limitations if there's privity between them.

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Disability & Adverse Possession

The statute of limitations for adverse possession can be paused if the rightful owner has a disability like being a minor, having an unsound mind, or being imprisoned.

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Nuisance: Judicial Land Use Control

A nuisance is a substantial, non-trespassory interference with someone's enjoyment of their property caused by harmful activities.

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Nuisance Remedies

Courts can issue an injunction to stop the nuisance or award damages to compensate for the harm, but the nuisance continues.

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Servitude: A Property Interest

A servitude gives someone a right to use another's land, benefiting their own property.

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Easement: A Right to Use

An easement is a property right that allows an owner to use another's land for a specific purpose.

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Types of Servitudes

Servitudes can be either easements, which are rights to use another's land, or covenants, which are promises that bind future owners.

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Material Defect

A defect that a reasonable person would consider significant when deciding to buy a property. It affects the value or desirability of the property.

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Merger Doctrine (Real Estate)

The legal principle that when a buyer accepts a deed, all previous contractual obligations are deemed fulfilled, and the contract merges into the deed, becoming final.

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Compensatory Damages (Breach of Sales Contract)

Damages awarded to compensate the injured party for their financial loss due to the breach of contract. They are measured by the difference between the contract price and the market value at the time of the breach.

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Specific Performance (Real Estate)

A legal remedy where a court orders the breaching party to fulfill the contract's terms, typically used in real estate contracts where the property is unique and damages wouldn't be adequate.

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General Warranty Deed

A type of deed that offers the most comprehensive protection to the buyer, guaranteeing the title is free from defects, including those that occurred before the seller owned the property.

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Covenant of Seisen (Deed)

A promise in a deed that the seller owns the property and has the right to convey it.

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Covenant Against Encumbrances (Deed)

A promise in a deed that the property is free from any undisclosed claims or burdens, like liens or easements.

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Quitclaim Deed

A deed that conveys whatever interest the seller has in the property, without any warranties or guarantees. The buyer takes the property 'as is' and assumes all risks.

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Study Notes

Land Transactions

  • Statute of Frauds: Real property transactions require written contracts, signed by all parties, a description of the property, and a price.
  • Part Performance: If the statute of frauds is violated, an injured party can sue for part performance with satisfactory evidence of the contract and detrimental reliance.
  • Equitable Estoppel: An injured party can sue for equitable estoppel if the seller's actions caused the buyer to reasonably rely on the agreement, causing detriment.
  • Marketable Title: A condition of a real estate contract where the title is free from reasonable doubt regarding its validity. This assures the buyer that the seller has the right to sell and transfers the promised rights. If not, the buyer can rescind the contract.
  • Encumbrances: Any right or interest in land that diminishes its value. Encumbrances can include restrictive covenants or zoning violations. They indicate an unmarketable title, unless waived.

Duty to Disclose Defects

  • Common Law: Under common law, the seller had no duty to disclose known defects unless there was affirmative misrepresentation.
  • Modern Rule: Sellers now have a duty to disclose latent defects not readily observable by buyers and are material (affecting value or desirability). Failure to disclose such defects constitutes fraud.

Merger Doctrine

  • Definition: Upon a buyer accepting a deed, the contract merges into the deed; therefore, the buyer can no longer sue on the contract. This typically does not apply to collateral promises, fraud or implied warranties of quality.

Remedies for Breach of Sales Contract

  • Damages: Measured by the loss of bargain rule (contract price minus market value at time of breach). Special damages are allowed if they were a natural and foreseeable consequence of the breach.
  • Rescission: Allows to cancel the contract, sometimes with the return of a deposit.
  • Specific Performance: Available for real estate contracts, where damages are inadequate; typically when unique land is involved.

Deeds

  • Warranties: Different types of deeds offer varying protection. A general warranty deed warrants against all defects, a special warranty deed only against the grantor's own actions, and quitclaim deeds offer no warranties.
  • Covenants: Present covenants (seisin, right to convey, against encumbrances) are breached at the time of delivery, while future covenants (general warranty, quiet enjoyment, further assurance) can only be breached in the future.

Delivery

  • Definition: A deed must be delivered with intent to be presently effective. Constructive delivery may also suffice.

Financing real estate transactions

  • Mortgages: Legal interest created by an instrument, providing security for payment of the loan. There are differing theories on how mortgages work, such as title theory and lien theory.
  • Recording System: Allows individuals to record titles and interests. The key is to find out who owns the property and whether there are prior interests.

Title Assurance

  • Recording Acts: Protect bona fide purchasers by guaranteeing they are protected from prior claims or interests. Race, notice, and race-notice are different scenarios that determine which claim takes precedence.
  • Chain of Title: A complete history of all recorded documents associated with a property. If a deed is in a chain of title, then a subsequent purchaser has notice.

Inquiry Notice

  • Definition: Purchasers are required to take reasonable steps to inquire about possible interests or defects in property.

Adverse Possession

  • Elements: Actual, exclusive, open and notorious, adverse (hostile), and continuous possession for a statutory period.
  • Tacking: Allows adverse possessor to add their time of possession to previous possessors provided they had privity.
  • Disability: Periods where the rightful owner has a disability can extend the time limit (e.g., minors or those with mental impairment)

Judicial Land Use - Nuisance

  • Nuisance: Interference with another's use and enjoyment of their property either by intentional, but unreasonable conduct, or due to negligent actions.

Private Land Use Servitudes

  • Easement (Definition and Types): A right to use someone else's land for a particular purpose, either affirmative (use of land) or negative (prohibiting certain activities). Can be created by grant, reservation, prior use, necessity, or prescription.
  • Easement Appurtenant: Benefits one piece of land (dominant estate), and burdens another (servient estate).
  • Easement in Gross: Benefits a specific person or entity, rather than a piece of land.
  • License: Permission to use land, generally revocable.

Covenant

  • Real Covenants: Promises that run with the land at law and are enforceable against successors. Must have intent, notice, privity (horizontal and vertical), and touch and concern.
  • Equitable Servitudes: Promises that equity will enforce against successors of the burdened land. They don't necessarily require privity to be enforceable.

Termination

  • Easements: Can be terminated by release, expiration, merger, estoppel, condemnation, prescription, or abandonment.
  • Covenants: Enforcement can be affected by changed conditions, if these render the covenant unenforceable.

Zoning

  • Nonconforming Use: A lawful use existing at the time of zoning that is allowed to continue, but can't be expanded. There is a requirement to comply with the ordinance.
  • Variance: An exception to zoning laws granted for unique or unusual hardship that allows for a permissible deviation with restrictions.
  • Special Exception: A permitted use of property under previously established criteria, as an exception to zoning ordinances
  • Zoning Amendment: A legislative change in zoning law affecting a change of zone status or specific property use
  • Spot Zoning: A zoning change that focuses on a particular parcel or small neighborhood to change or intensify the use.

Takings

  • Eminent Domain: Government's power to take private property for public use, but must compensate owners fairly.
  • Just Compensation: Fair payment to the property owner if their property is taken by the government.
  • Regulatory Takings: Government regulations that limit property use and significantly reduce value so that they are considered to constitute a de facto taking.

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Description

This quiz covers essential concepts related to land transactions, including the Statute of Frauds, Part Performance, and Equitable Estoppel. Understand the conditions for Marketable Title and the implications of Encumbrances in real estate agreements. Test your knowledge of legal frameworks that govern property transactions.

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