1. Steps to purchase and sell real property
1.1. Owner lists on the market with real estate broker using a listing agreement
1.1.1. Broker is the sellers agent
1.1.2. Employment agreement with the broker is a Listing Agreement
1.2. Purchaser will contact the broker and may also contract with the broker
1.3. Terms between buyer and seller are negotiatied with the broker
1.3.1. Contract of purchase and sale will result from the completed agreement
1.4. From Singing the contract of sale until the closing time will be the executory period
1.4.1. Any issues are concerning performance are brought here.
1.4.1.1. Allows the buyer to inspect the property, review title, survey the property and secure loans
1.4.2. Closing occurs upon completion of the sales transaction.
1.4.2.1. Property will be transferred by Deed
1.4.2.2. Buyer will pay by cash or promissory note
1.4.2.3. all other details pertinent to the sale are completed.
2. Statute of Frauds
2.1. Under the statute of frauds, all deeds and real estate contracts are to be in writing and signed by the party to be bound (charged)
2.1.1. Does not render non-compliant contracts void, illegal or unperform-able, but unenforceable in the law
2.1.2. Applies to transfers in realestate
2.1.2.1. Includes
2.1.2.1.1. Easments
2.1.2.1.2. water rights
2.1.2.1.3. Covenants
2.1.2.1.4. Long-term Leases
2.1.2.1.5. Mineral rights
2.1.2.1.6. reainders
2.1.2.1.7. Leins
2.2. Not all parts need to be in writing.
2.2.1. Oral provisions can be enforced so long as a sufficient writing exists
2.3. Courts have established four elements to a writing.
2.3.1. Identify the parties to the contract
2.3.2. Be signed by the parties to be bound
2.3.3. Describe the property
2.3.4. State the price or a method to determine the price
2.4. May be in a series of documents (so long as one mentions the other)
2.5. Exceptions to the SOF
2.5.1. Part Performance
2.5.1.1. Courts excuse failure to procure a writing if buyer does the following to demonstrate part performance
2.5.1.1.1. Pays the Purchase Price
2.5.1.1.2. Takes Possession of the Property
2.5.1.1.3. Improves the property
2.5.1.1.4. PAYMENT ALONE IS INSUFFICIENT. MUST HAVE ONE OR MORE OF ABOVE
2.5.2. Equitable Estoppel (Doctrine of Promissory Estoppel)
2.5.2.1. If a party seeking performance is justifiable in reliance on an oral contract and continuing assurances of the other party so substantially changes his position that injustice would result w/o enforcement of the contract
2.5.3. Admission of contracts in court
2.5.3.1. Determined upon defense applicability of statute of frauds
3. Doctrine of Equitable Conversion
3.1. Although the seller holds legal title and right of possession until closing, some ownership risks and benefits pass to the buyer upon execution of the sales contract.
3.1.1. Purchaser=interest in real property
3.1.2. Seller= interest in the sales contract, personal property
3.1.2.1. Causes the intestate statute to treat the incomplete sale (in executory period) as personal property upon death
3.2. Allocates the risk of loss if peroperty is completely or partially destroyed by natural causes or affected by government actions
3.2.1. Traditional Majority
3.2.1.1. Risk of loss is buyer's responsibility
3.2.2. Minority
3.2.2.1. Risk of loss is held by the seller
3.2.3. Both however, buyer and seller, hold an insurable interest during the executory period.
4. Time for Performance
4.1. Buyer cannot rescind immediately.
4.1.1. Seller has time to rectify or remove the defect
4.2. Buyer also gets time to obtain financing, inspect property etc.
4.3. parties have a reasonable time to perform or to close upon the contract
5. Remedies for breach of the sales contract
5.1. If buyer breaches, the seller can seek specific performance, often limited to $$ damages.
5.2. If seller cannot deliver marketable title at the time of the closing, the buyer may elect to rescind, seek specific performance or abatement of the purchase price
5.3. Damages
5.3.1. Nominal- out of pocket
5.3.1.1. Limited to the closing and settlement costs associated with the sale
5.3.2. Benefit or loss of damages
5.3.2.1. Difference between fair market value at time of the breach and the contract price.
5.3.3. Majority will award bargain loss to the buyer when the seller believed the title was good
5.3.3.1. Always awarded if seller acts in bad faith
5.3.3.2. Allows consequential damages foreseeable to the breaching party
6. Merger Doctirine
6.1. At common law, when a buyer accepts a deed the buyer is deemed to be satisfied and all contractual obligations are met
6.1.1. The contract will then merge with the deed and the deed is deemed to be the final expression of their agreement
6.1.1.1. Disallows the breach of contract claim as duty and obligations have been fulfilled at closing
6.1.1.1.1. ICE HOUSE CASE from Contracts II Parole Evidence Rule
6.2. Now in disfavor due to exceptions that have developed, but still represenative of the majority view
6.2.1. Title defects are no longer contractually remedied
6.2.1.1. not applicable to physical defects