Land Sale Contracts
What is the SOF performance exception for land sale contracts?
You must have 2/3
- payment (parital/full)
- possession OR
- substantial improvement
What are the elements to take property by adverse possession?
Actual - Must be physically present
Exclusive - You are not using the land in conjunction with the owner
Open/Notorious - Use is not hidden - reasonable owner could discover
Hostile - You're acting without the consent of the owner
Continuous - Must be continuous for the statutory period
This element is required to make delivery of a deed effective.
What is intent at the time of transfer?
An interest in real property that's security for an obligation.
What is a mortgage?
The lender is permitted to bring a this type of action when the foreclosure sale does not pay off the mortgage.
What is a deficiency action?
This right gives the holder the chance to get property before the transfer to another
What is a right of first refusal?
This principle allows an adverse possessor to add time to meet the statutory period if there is privity between successive possessors.
What is tacking?
What is not effective delivery of a deed?
Transfer to third party - If a grantor gives a deed to a third party, asking them to transfer the deed to another in the future, the grantor may retain the deed if the language suggests so.
This majority rule mortgage theory is when the borrower is treated as the owner of the real property with the lender retaining an interest.
What is lien theory?
This phrase is when a foreclosure purchaser does not have personal liability for remaining mortgages, but is still subject to foreclosure if the mortgages are not paid.
What is "subject to"?
This covenant arises during the contract performance phase and promises a title free from defects that create risk of litigation.
What is the implied covenant of marketable title?
What covenants are included in general warranty deed?
General warranty deed includes three present covenants and three future covenants.
Present covenants - Seisin, right to convey, against encumbrances
Future covenants - quiet enjoyment, warranty, further assurances
"A conveyance of real estate is void as against any subsequent purchaser in good faith and for a valuable consideration, without notice, whose conveyance shall be first recorded" is this type of statute.
What is a race-notice recording statute?
This is when a borrower defaults and the mortgagee (lender) take the real property after providing notice to the borrower and all interested parties.
What is foreclosure?
What are the distribution of proceeds in descending order?
1. costs associated with the sale
2. mortgage obligation being foreclosed on
3. mortgage obligations owed to the junior interest holders
4. remainder goes to debtor-mortgagor
This doctrine destroys any promises in the land sale contract upon delivery of the deed at closing if not written into the deed.
What is the doctrine of merger?
How is a special warranty deed different from a general warranty deed?
Special warranty deed - The same covenants of a general warranty, but ONLY for defects that occurred when the grantor had the title.
"No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law" is this type of statute.
What is a notice recording statute?
When foreclosing and there are multiple security interests in the property, this is the general rule to begin with to determine order of priority.
What is "first in time, first in right"?
What is the effect of foreclosure on the (1) mortgagor, (2) purchaser of property, (3) senior interests, (4) junior interests?
Mortgagor - Foreclosure eliminates interest in the property
Purchaser of property - takes interest free of junior mortgage and subject to senior mortgage
Senior interests - not typically impacted by foreclosure sale
Junior interests - interests are destroyed
Define all types of notice that satisfy the notice requirement of a notice or race-notice recording statute.
Actual - Actual personal knowledge of the interest
Inquiry - A reasonable investigation would disclose the prior interest
Record/Constructive - If something was recorded, then you have constructive notice of its existence
What are the exceptions to priority of interests in foreclosure, starting with the highest priority.
Purchase money mortgage - Typically has priority over any existing lien
Recording act - A subsequent mortgage that satisfies a state recording act has priority over an unrecorded prior mortgage
Subordination agreements - If you hold a prior mortgage, you can subordinate your interests to the holder of a subsequent mortgage
Mortgage modifications - If you are a senior mortgagee and you transfer your mortgage to a junior mortgagee, then the new mortgage gets the same priority as the old one.