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Property II
Wayne State University Law School
Sheppard, Charles B.

 
*This outline was made for Dean Sheppard’s Fall 2013 Property II course. Specifically, this outline details the portion of the course covering Real Estate Transactions
 
 
I.          Phases of a Sale & Purchase of Residential Property (single family detached; residential condominium unit; or residential townhouse unit):
 
            A.        Interactions & contracting with a real estate broker.
 
B.        In some regions of the country, interaction with, & retention of the services of, an attorney is typical. In other regions, that is atypical.
 
C.        Negotiating & entering into a contract for the sale & purchase of the home.
 
1.      Requirements of Statutes of Frauds: The K must meet these requirements
 
                                                                    i.            Elements
 
                                                                                                  i.      Essential Terms: the essential terms of the K (usually the identity of the parties, the price, & the property description) must be set forth in writing
 
                                                                                                ii.      Writing: the writing can be formal K or an informal memorandum
 
                                                                                              iii.      Signature: the writing must be signed by the party sought to be bound
 
a.         Exceptions under which a promise to sell or to buy an interest in real property is enforceable even though the existence of the promise is evidenced by a document that satisfies the requirements of the applicable statute of frauds:
 
(1)    Part-performance doctrine: A oral K may be enforced if the buyer (1) takes possession; (2) pays at least part of the purchase price; & (3) makes improvements to the property
 
a.       Most jurisdictions: require that the buyer takes possession & either pay the purchase price or make improvements
 
b.      Some juris: require pymt & either possession or improvements.
 
c.       Rational: buyer would only perform these actions only if a K existed, so this conduct serves as a substitute for writing.
 
(2)   Promissory Estoppel: A contract for the transfer of an interest in land may be specifically enforced notwithstanding failure to comply with SOF if it is established that the party seeking enforcement, in reasonable reliance on the K & on the continuing assent of the party against who enforcement is sought, has so changed his position that injustice can be avoided only by specific enforcement.
 
a.       Cts with equitable power are vested by tradition with what in substance  is a dispensing power based on the promisee’s reliance, a discretion to be exercised with caution in light of all the circumstances.
 
b.      Two district elements apply to this rule: first, the extent to which the evidentiary function not the statutory formalities is fulfilled by the conduct of the parties; second, the reliance of the promise, providing a compelling substantive basis for relief in addition to the expectations created by the promise.
 
c.       Equitable estoppel: an oral K may be enforced if: (1) one party to his detriment in reasonable reliance on another’s oral promise; & (2) serious injury would result if enforcement is refused. Ex: the complaining party relied on the oral agreement by selling another property or by refusing others for the property in dispute. [Pg. 537]  
                                                                                                                                                                          i.      Creation of a Promise
 
                                                                                                                                                                        ii.      Reliance by the Promisee on the conduct of the promisor
 
                                                                                                                                                                      iii.      Reliance was Reasonable
 
          

w.
 
a.   Basic responsibilities of an escrow holder (i.e., escrow agent or closer). The escrow agent is a neutral 3rd party who receives the purchase price, the deed, the mortgage, the promissory note, & any other docs needed to consummate the transaction. When all the conditions in the K have been satisfied, the escrow agent distributes the funds & docs as directed by written escrow instructions.
 
            2.         Investigation of the Quality of Seller’s Title.
 
a.       Marketable title required by the terms of the buy/sale contract:
 
(1)  Buyer can rescind the K if the seller is not able to tender marketable title when that tender is due.
 
b.      Recording laws:
 
(1) CL rule of first in time, first in right: A grantor could only convey title once. The person who received his interest first prevailed.
 
(2)  The Recording System: [modified CL rule of 1st in time 1st in right]  
(a)     Indexes:
 
[1]   Grantor/Grantee Indexes: organizes by the names of the parities to the transaction. Most commonly used method. Under this system, every recorded document is indexed in two places: the grantee index & the grantor index.
 
§  Grantee index: each entry is organized alphabetically by the grantee’s last name
 
§  Grantor index: is organized by the grantor’s last name.
 
§  Along with the parties’ names, an index entry will contain the type of instrument, the tie of recordation, the location of the recorded document (ex: volume & page #), & a brief description of the property involved.
 
[2]        Tract Index: organizes by the parcel involved. Each parcel of land is assigned a unique identifier