Property Lecture Notes PDF

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Course Lecture Notes...

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Property - Grossman Lecture MBE

─ Contracts The Real Estate Contract -

Must be in writing -

Exception to writing: -

Part Performance -

Some or all of the purchase price AND

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Made some improvements on the land OR took possession of the land

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Price

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Parties

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Basic description of the property itself

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Any conditions that the parties want in the agreement

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Signed by the party to be charged

Equitable Conversion - MUST KNOW -

Takes place the day real estate contract is signed

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The seller’s equitable interest transfers to the buyer -

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The risk of loss transfers to the buyer

Buyer now has an equitable interest in the property

Implied Promise to Convey Marketable Title Marketable Title - free of any encumbrances/defects Free from all: -

Liens

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Mortgages

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Covenants

2 -

Easements

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Zoning violations

Time is NOT of the essence -

Unless a timing is put as a condition in the contract

Deed -

Executed on the day of closing

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All legal title is being conveyed to buyer

Doctrine of Merger What happens to the Real Estate Contract on the day of closing? -

The contents of the real estate contract merges into the deed

If after closing, the seller/buyer did not comply with a condition stated in the contract: -

You have to sue on the deed

Remedy for breach: -

Damages (money) -

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Legal remedy

Specific Performance (unique) -

Equitable remedy

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When the remedy at law is inadequate

Duty to Disclose -

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Seller must disclose material and physical defects to the buyer -

Generally the ones that cannot be seen by the buyer

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Ones that would affect the structure of the house

If the defects can be seen or are known to the buyer, there is no reason to disclose

Mortgages A loan from a bank or an individual and you am using my property as collateral -

If you do not pay back the loan, they get your land

You can take out a mortgage for several reasons - can have multiple loans at a time If there is a foreclosure on the house, who gets paid first:

3 -

The purchase money mortgage -

The money used to purchase the house

Redemption -

Bank is going to foreclose, but you have a period to pay the mortgage prior to foreclosure

Equitable Right of Redemption -

From the time of notice of foreclosure to the date of the sale

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You can pay the money owed, and the bank MUST take it

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It can never be waived

Statutory Right of Redemption -

Can reclaim your property after the foreclosure sale

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There will be a statutory time period

Lien Theory - FLORIDA -

The bank who lent you the money only has a lien on the property -

They have no legal rights to the house or land

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the buyer has legal title to the property

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Lien is removed from the title when the mortgage is paid off

Title Theory -

The bank who lent you the money holds title to the property

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The buyer has an equitable interest to live in the house

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Buyer will get the deed when the mortgage is paid off

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Cannot sell your property on his own - because he does not have title

Joint Tenants Lien Theory Jurisdiction -

Take out a mortgage, both joint tenants have legal title

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The mortgage does not affect the holding of the title

Title Theory Jurisdiction -

Take out a mortgage - the bank has title -

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Title is conveyed

The joint tenancy is severed into a tenancy in common

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Assuming the Mortgage -

A buyer wants to purchase the house and there’s still a mortgage on it

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The buyer can “assume” the mortgage and now takes over payments

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Buyer becomes primarily liable for the payments

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Bank can still come after seller if buyer does not pay UNLESS there is a novation (new contract)

Subject to the Mortgage -

Default rule

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Buyer purchases house with a current mortgage on the property, but buyer does NOT take over responsibility to pay

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Seller remains liable for the mortgage -

If seller does not pay the bank, the bank can foreclose on the property

Due on Sale Clause -

Upon the sale of the house, all of the money has to be paid off at that time

Deed in Lieu of Foreclosure -

Voluntarily had over the deed to the house and give it to the bank, to avoid the foreclosure process

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Must have consent of both parties

Deficiency Sale -

I owe $200,000 but during the foreclosure, the bank only recovers $150,000

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The bank can come after the you for the remaining amount owed

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At the foreclosure sale itself -

The bank must try sell the house for a FAIR price at the foreclosure - under the circumstances

Installment Land Sale Contract -

Making installment payments PRIOR to getting title to the property -

You do not have title until all the payments are made

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Marketable title is not required until the last payment is made

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If you default in one of the payments, you can retake the property OR

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If there are foreclosure proceedings in that jurisdiction then you would go through the foreclosure proceedings

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