TRANSFERS OF LAND
REAL ESTATE-BROKERS
LICARI v. BLACKWELDER p463
FACTS- within a 24 hour sale period the defendants made their own offer of 115,000 for the plaintiffs property which was accepted. The defendants did not negotiate on behalf of or for the plaintiffs with the potential buyer secured by them, and did not allow for a reasonable period of time to expire for such negotiations before they made their own personal offer. The defendants also did not disclose to the plaintiffs their understanding of the potential value that the plaintiffs property might have to other buyers.
-the defendants then proceeded to sell the home to another buyer for the price of 160,000.
ISSUE-as an agent of the plaintiffs what is a brokers duty to their “employer.”
RULE-a real estate broker is a fiduciary, he is required to exercise fidelity and good faith, and cannot put himself in a position antagonistic to his principal’s interest, by fraudulent conduct, acting adversely to his clients interest, or by failing to communicate information he may possess or acquire which is or may be material to his principals advantage.
-a real estate broker acting as a subagent with the express permission of another broker who has the listing of the property to be sold is under the same duty as the primary broker to act in the utmost good faith.
Written agreement with broker is called a listing agreement.
Contract of sale is executory- an agreement that is not performed/closed until some time after initial signing. When the contract is signed a deposit is given which is called ernest money.
Conditions to a sale- 1 financing. 2 condition of title(marketable?). Abstract of title is a one page summary of title, then an attorney does a title opinion. You can even get title insurance. 3 inspection of property
In the contract an specified closing date is chosen to end the executory period.
Listing agreements
1-exclusive right to sell- best for broker, they get a commission regardless of who procures a buyer.
2- exclusive agency listing- there is only one broker but if you sell the house yourself then the broker does not get commission.
3- open listing- lest protective listing for a broker. Seller can sell property themselves or with another broker.
traditional rule-The broker earns commission when they procure a ready willing and able buyer.
If a deal falls thru because of buyer-a commission should not be earned.
If a deal falls thru because of seller- a commission should be earned.
Contract of sale p472
Oral contract for sale is generally unenforceable under the statute of frauds-requires certain types of contracts to be in writing. 1 contracts for sale of land being one of them or at least a memorandum. 2. leases over a certain time period (1 year in florida)
-the writing must have a 1 description of the land(you don’t need the full legal description), 2 price(“fair market value” might be enforceable, price must be ascertainable), 3 signed by party to be bound.
-court will imply a marketable title provision in a contract lacking such a provision.
HICKEY v. GREEN p474
PROCEDURAL FACTS- hickeys filed complaint for specific performance. Trial judge granted specific performance, green appealed.
FACTS-lot being sold for 15,000. lot agreed to be sold with a 500 deposit oral agreement. Hickeys go to sell their house and then start building on new lot. Green ended up finding another buyer for 16,000 after hickey already sold their house.
ISSUE-was the check sufficient for a contract of sale.
RULE- a contract for the transfer of an interest in land may be specifically enforced notwithstanding failure to comply with the statute of frauds if it is established that the party seeking enforcement, in reasonable reliance on the contract and on the continuing assent of the party against whom enforcement is sought, has changed his position that injustice can be avoided only by specific enforcement.
Part performance- if there are things done that would not have been done unless there was an existing contract/deal.
Estoppel- when unconscionable injury would result from denying enforcement of the oral contract after one party has been induced by the other seriously to change his position in reliance on the contract. May also apply when unjust enrichment would result if a party who has received the benefits of the others performance were allowed to rely upon the statute.
MARKETABLE TITLE-even if not specified a court will imply a marketable title. Means there will be no hazard of litigation.
Insurable title- title will be insured if title is not quite marketable.
Marketable title w/ exceptions- easements etc.
LOHMEYER v. BOWER p479
Facts: PL’s entered into real estate agreement w/DF. K said the land was merchantable(except for restrictions of record), but after the agreement was entered, PL found that there was a restrictive covenant placed on the lot of land by the original subdivider. Additionally, PL’s lawyer, after further examination, learned the city placed a zoning ordinance regarding building to the end of a lot. DF’s who built the house somewhere else, had it moved to the deeded location.
Issue(s): Under KS property law, does a property subject to encumbrances or other burdens make the title unmerchantable, or, alternatively, if these encumbrances were excepted by the provision in the K that the title was subject to all restrictions and easements applying to the property? 1. two story covenant. 2. zoning ordinance.
Holding: Yes. The court found that the violation of the restrictions imposed by the ordinance and the dedication declaration (not the existence of the restrictions) rendered the title unmarketable. No, to the alternative argument.
Rule: Marketable title leaves no question as to who the owner is. It is the title which a reasonable buyer, knowledgeable of the facts and their legal implications and acting in a reasonable manner, would be willing to accept. A title insurance company should be retained to insure that the title is marketable. (rule from KS case)
Covenant- agreement between private parties. For ex a house must be 2 stories.
EASEMENT- it must be proven that it adversely affects the value of the property in order to show violation of marketable title.
TITLE STANDARDS- helps a court and attorneys figure out what will be a problem for a title.
EQUITABLE CONVERSION- the minute you sign the c
e contractor and asked him to fix the defects and although the DF initially agreed to do so, he never completed the repairs. As a result, PL’s brought suit against the builder and the builder filed a motion to dismiss.
PL’s had 3 claims in their briefs: 1) breach of implied warranty of workmanlike quality, 2) negligence, 3) breach of assigned K rights (the court only addressed the first 2).
Issue(s): Under NH property law, does there need to be privity of K for a subsequent purchaser to sue a contractor for latent defects which cause solely economic harm?
Rule: The court outlined limitations as to privity:
1) no privity necessary only when there are latent defects which manifest themselves after purchase and were not discoverable by inspection before purchase and
2) They are discovered in a reasonable period of time and
3) The customary standard for workmen (that they use customary skill and care) is met
4) The burden of proof is on the P to show that the defects were caused by the D
5) The D (builder) has defenses such as wear & tear or that previous owners made substantial changes.
-privity of contract is not necessary for a subsequent purchaser to sue a builder or contractor under an implied warranty theory for latent defects which manifests themselves within a reasonable time after purchase and which cause economic harm.
THE DEED p513
A deed is an instrument of conveyance, it is not the title.
A deed doesn’t have to be recorded to be valid. It is effective as soon as it is conveyed.
What a deed needs.
1 a description of the property. Reference to “plat,” reference to govt survey, “metes and bounds description(monuments),”
2 names of parties
3 words of conveyance
4 signature from grantor.
5 notorization.
Bona Fide Purchaser-
an innocent party who purchases property without notice of any other party’s claim to the title of that property. A BFP must purchase for value, meaning that he or she must pay for the property rather than simply being the beneficiary of a gift. Depending on the laws of the relevant jurisdiction, when a party fraudulently conveys property to a BFP, such as by selling the BFP property that has already been conveyed to someone else, that BFP takes good title to the property despite the competing claims of the other party so long as the BFP properly records the transaction. Other parties with claim to ownership will have a cause of action against the party who made the fraudulent conveyance.
In a case of forgery the original land owner will regain the property from the BFP.
