PROPERTY II OUTLINE
Chad Emerson, Property by Dukeminier, Krier, Alexander, & Schill, 6th Edition
HOUSE PURCHASE TRANSACTIONS
1. People Responsible for Protecting the Buyer’s Rights
a. Inspector
b. Seller
2. Brokers and/or Real Estate Agents normally represent buyers or sellers instead of lawyers in a real estate transaction
a. Others involved – mortgage lender, title searcher, inspector …
3. Land Transaction – 4 Step Process
a. Listing
i. MLS – “Multiple Listing Service”
ii. Usually no lawyer involved during this part
b. Negotiation and Offer
i. Usually no lawyer involved during this part
c. Transaction Process – potential 3rd parties are: the agent, buyer, attorney, mortgage company, insurance company
i. A lawyer gets involved during this part
ii. With each new relationship, potential legal issues arise
d. Closing – Completion of the transaction process and the most litigated phase
i. A lawyer is involved during this part
CONTRACT OF SALE
1. 2 General Types of Contracts – Oral & Written
a. Oral are severely limited in land purchases, because they are
i. Extremely susceptible to fraud
ii. Not concrete enough
iii. Very difficult to dispute, examine, and trace – unlike written contracts
iv. Land is a unique and valuable asset that will always be around and need a written memorial
2. Statute of Frauds
a. Contracts for the sale of land
i. Written
ii. Signed by the party to be bound
iii. Property Description – sufficient enough to identify the property
iv. Price – in no stated price, the court implies an agreement to pay a reasonable price
v. All Material Terms for Some States – anything required to complete the transaction
b. Exceptions
i. Partial Performance – generally only a defense in equity
1. either specific performance or an injunction
2. 2 Theories
a. Part performance satisfies the goal of the Statute of Frauds to create a reliable evidence of intent
b. Part performance attempts to prevent irreparable injury
ii. Estoppel – prevents an unconscionable result in law or equity and is used to enforce oral contracts to sell
1. Negative Benefit – one party should not be able to induce another to alter their position in reliance but then back out because the agreement was not written
a. Doesn’t have to include an enrichment
b. Seller isn’t gaining anything, but inducing the buyer to lose something. Example of suffering a harm – I sold my house and have nowhere to live
2. Affirmative
of facts materially affecting the value of the property which are not readily observable and are not known to the buyer at the time of purchase
b. 3 Levels of Knowledge of Defects
i. No Knowledge – Had no idea of defect
ii. Constructive Knowledge – Should’ve known the defect
iii. Actual Knowledge – Knew about the defect
c. Duty to Disclose – The seller is under a duty to disclose these facts to the buyer
i. Affirmative Disclosure, non-disclosure = concealment
ii. Omissions – omissions can be a misrepresentation
d. Most states hold that sellers have a duty to disclose material facts/defects regarding the condition of the property to buyer
i. Unless the material fact is readily observable
e. Caveat emptor, “buyer beware” – old rule that seller did not have to disclose all defects unless a defect was fraudulently concealed
i. The purchaser should be fully knowledgeable about their purchase and should conduct their own inspection before the transaction is complete
5. Merger
