Property II Outline
I. Real Estate Transactions
1. Process
a. Seller lists with Agent
i. Agent has loyalty to Seller
ii. Buyer should have own Agent
b. Buyer puts down earnest money – down payment
c. Outs are placed in Contract – “subject to”
i. If backing out – lose Earnest Money
d. Financing – Banks may require title insurance
e. Closing – Property and money changes hands
i. Only involves Lawyers
ii. Sometimes brokers = legally capable of doing lawyer’s job
1. Drafting Real Estate contract
2. Some places everything through closing
3. Lawyers say this is unregulated law practice
a. See In Re Opinion
i. Obligations are contractual in nature – law
ii. Proper drafting of documents
iii. Court said residential property can be done by brokers
b. Bar association has been pushing but B’s keep winning
4. This is an it depends issue
iii. Requirements vary by jurisdiction
iv. Statute of Frauds – judge made law
1. Deeds must be in writing
2. There are exceptions
a. Partial Performance
i. Varies by jurisdiction
ii. Theories
1. Must substantially satisfy evidentiary requirement
2. Injurious Reliance on K
a. Buyer taking possession for example
b. Must be irreparable harm in some
c. Others possession may suffice
b. Estopple
i. 2 ways to meet this
1. Unconscionable injury would result
2. Unjust enrichment
3. What satisfied – any writing including essential terms
4. Varies by jurisdiction
5. If court does not want to follow it, it is viewed as a principle
6. Courts look for
a. Reliance on the K
b. Manifest injustice
c. Change in position of party
d. Must be evidence of deal – or both admitting to it
i. Must admit to more than just that there was an oral agreement
v. In seeking performance – courts look to
1. If buyer seeking – more likely to grant
a. Each parcel of land is unique
b. Money damages may not suffice
2. If seller seeking – more likely to grant
a. Hard to prove difference between price and FMV
b. Difficult to resell
vi. Recoding does not matter for legality
2. Must have Marketable/Merchantable Title – Title reasonably free of defects – insurable title
a. Types of Restictions
i. If there is a Private Restrictive Covenent
1. PRC makes property unmarketable
2. Must get waiver
3. Any PRC must be disclosed
ii. Zoning ordinances do not make property unmarketable
1. However a violation of the ZO does
2. Violations do not have to be disclosed
ii. Florida – does not like Caveat Emptor. Test is if it materially affects the value
iii. California – neighborhood noise or other nuisances
1. See Shapiro v. Sutherland – failure to disclose = liable to subsequent buyer
iv. Arbitration Clauses
1. Instead of suing, clause says arbitrate
2. These may or may not be enforceable
3. Not if unconscionable provision hidden in 70 page contract
a. Builder only offering buildings as take it or leave it
b. This was not enforcable
v. Increasing majority require all facts disclosed – material to value
vi. Stigma Statutes – shield certain problems that merely have a stigma
vii. Megan’s Law – Can include in K duty to disclose
viii. Hazardous Waste and Landfill – it depends (have been under duty)
1. Statute – CERCLA
a. Usually there is a duty to clean up
b. Exception – innocent landowner
i. Must buy land that was previously contaminated
ii. Must have made all appropriate inquiry
2. Duty to Disclose
c. Ask if
