Equity:
Amortization: The liquidation of a financial obligation on an equal periodic installment basis.
Alternative Finance Methods
Due on Sale Clause
Subject to the loan: buyer is not personally liable but the property is still encumbered
Assumes the loan: buyer is personally liable
Due on sale clause: if the land is sold, the banker has a right to be paid off and get out of the deal.
Junior mortgage follow an earlier mortgage—this is a second mortgage.
Leverage: you make money with the concept of leverage. Put a small amount down and allow appreciation to make your money.
Land Descriptions:
Metes & Bounds
Fractional Part
Government Survey
Plat Reference
Plane Coordinate
Surveyors or Angular
Where do you find land descriptions?
Deed- this is the conveyance of the property
Contract- a promise for the breach of which the law allows a remedy
Mortgage
Option- this is the most crucial document to have the land description
Put
right of first refusal
Notices in the newspaper, b/c of a will or partition action
Will
Tools of the trade:
Ruler in 10ths of an inch
Colored pencil
Stencils
Compass
Protractor
Mechanical pencil .5 mil
Metes and Bounds
The figure you draw must close. You go from monument to monument. You can use natural monuments or
You go from monumnent to monument through a series of calls which contain distance, course (direction) and an adjoiner (someone’s boundary line) and then end with a quantity (normally in acres) The last call will say you are located near some well know reference point.
Begin with a monument then a set of calls and then close.
Natural monument – tree
Artificial monument – post, or something you place there
Fractional Part: northwest quarter of my farm: well what is “my farm,” what is the northwest quarter, so there are many problems with this type.
US Gov. Survey:
NW1/4 Sec. 14, T2N, R3E of the 6th P.M.
The NW /1/4 of Section 14
6th Principal Meridian
Begin at the end, so you look at the 6th PM. This is a point and it is located on the Kansas Nebraskan Boarder directly above Witchita and Newton
There are 35 reference lines. In Kansas we use the 6th PM. (these things were set arbitrarily). The 6th PM must be in there to be fully accurate.
Township 2 north range 3 east
How long is Kansas- 400 miles
How wide is Kansas – 200
Lawrence would be: South Township, and East Range
75 miles from Neb. So 75/6= 12
135 miles to Silina so 135/6= 22
Therefore it is about T 12 S, R 22 E
Quantity in terms of acres. An acre is 43, 560 square feet. That represents 208 by 208 feet.
Football field is 300 by 150 feet.
Most lots are ¼ or ¾ of an acre.
Lines going east and west are parallel.
North south lines converge.
Rod = 16 ½ feet
4 Rods = 66 feet = 1 chain
100 links per chain
Plat Reference
Abstract of title- provides a chain of title and shows the evidence of title, the patent to the first owner of the land and then deeds, or foreclosure thereafter.
Ex: Lot 2 Block 8, Jones Addition, to the City of Lawrence, Douglas Co., Ks.
US to A to B to C to …. Jones. The City has now gotten closer to Jones and his land has appreciated.
Assume he has a ¼ section of land and a developer wants to develop it. They will take a picture of his land and create a sub division and draw the lots and blocks and give exact land descriptions of each lot.
Goes through approval process. Once it has gone through all of this, the land will cease to be the NW ¼ but will become the Plat—Lot 2 Block 8, Jones Addition….
Blocks can be any size, but each city may try to make them regular. Lots may have a standard size but they can be any size.
Plain Coordinates
With this system there is a graph put upon the land and it does not take the curve of the earth into consideration.
Angular or Surveyors Method
If you add all north and all south measurements, they should equal each other.
Water Boundaries:
Does the boundary go to the edge
Navigable and non-navigable
Navigable: could it be use at State hood for commerce. The Kansas River is navigable. The only other river that is navigable in Kansas is the Arkansas River. The court has held that the Arkansas River is navigable.
If a stream is navigable, then the riverbed is owned by the state.
If it is not navigable then the riparian landowner owns to the middle of the waterbed. The landowner on the other side of the water will own the other half of the waterbed.
The Ox Bow Incident—this is a book that Peck says is really good.
Accretion: slow ever present change that is happening at all times; land boundaries change with accretion; so one may
Avulsion: a sudden or rapid change (likely changed by a flood); leave boundaries where they were prior to the change.
Reliction: lake bed totally dies up
Brokers
Why are there so many cases:
If the K is oral, then it may be vague.
Customers of brokers feel that brokers get paid too much.
There is sometimes tension between the lawyer and broker if the buyer/seller has both. The broker wants to find a buyer get a K and close, the lawyer wants to take his time to make sure everything is good.
Procedure:
Buyer wants to buy or seller wants to sell
Seller signs a listing agreement or listing K with the broker
Appendix B p. 1321 in book (Exclusive Authorization and Right to Sell)
i. Exclusive Right To Sell
ii. Start date and ending date
iii. Address or description of the house
iv. The purchase price shall be
v. Multiple Listing Service
vi. Title Insurance
vii. Compensation to Broker
1. A percentage of the selling price if the property is sold in contract time, no matter who sells the property
viii. Ect…….
Broker tries to sell the property, ads in the paper, ads on Internet, sign in the yard
Listing Agreement (most common are 1, 2, 4)
1. Exclusive listing or exclusive right to sell (this is best for the broker)
2. Exclusive agency (me or some other agent and I get a commission but seller has the right to sell it and I do not get a commission) (Seller is able to use services and then sell it themselves)
3. Open listing
4. Multi Listing—(common in cities)
5. Franchises on page 2
6. Exclusive List but seller retains right to sell to specific individuals
Page 41 of the supplement
Foltz v. Begnoche:
K is construed against the drafting party.
Exclusive Agency:
Exclusive right to sell:
“The exclusive right” and “by you” were ambiguous and construed against the drafter.
o inform buyer of legal rights.
How much should a Broker divulge when trying to get a buyer to buy
Broker duty to buyer in informing of material information concerning the property (information that is known)
Easton case said Broker had an affirmative duty to investigate; BRETA came out took away this requirement.
§3109 broker is acting for the deal, the transaction broker
30,107
buyer’s agent must disclose any financial problems he knows about that may hinder closing to the seller.
Broker does not have to disclose information known about the property if a qualified third party learns about the information and gives it to the buyer.
#2, #3, Blank 58, Marchiondo; Mccue 66 and Dworake, 69
George v. Bolen (page 41)
Buyer asks the broker to aid him. The agency had three partners one of which was also involved in another company (investment firm). The investment firm buys the property that buyer was interested in.
The principle relationship is a fiduciary one requiring utmost good faith and loyalty and existing only by contract. Buyer told agent he wanted to buy such property for anywhere between 150K to 200K. The investment firm purchased the property and then wanted to sell it for an increase to the buyer.
Overview of Statutes: (page 32) old statutes and BRETA
3034 title
3035 definitions
3036 licenses are required unless exempt—no one can engage in the business of a broker unless the person is a licensed broker. You cannot act like a broker or perform certain acts.
3037: Exemptions—you may sell your own property and act as your own broker, power of attorney (this is a special agency); services rendered by an attorney; any person acting as a receiver,
3038: if you want to receive a commission you must be licensed
3062: prohibited acts
1. false advertising; misleading
2. place a sign on any property offering it for sale w/o the written consent of the owner
3. No definite purchase price, getting someone to sign w/o the terms
4. No fraud or substantial misrepresentation
5. Fail to make known any interest in the property being purchased or sold
3050: you can have your license suspended
3060: violation may be a crime
Entitled to a commission
produce a ready, willing, able buyer
closes
broker procuring cause
Blank case
Planintiff broker vs. seller defendant
Exclusive right to sell—broker has only right to sell (broker gets a commission no matter what)
Term
Withdrawal from sale provision which gives broker a commission.
Seller withdrew home and court held that seller had to pay commission.
Are these liquidated damages? The court did not think so.
Liquidated damages are damages specified in the contract. Liquidated damages that are too much are considered penalties.
How do you test liquidated damages? Rest. 356
