real estate transactions clasns 3 power point

7/26/2019 Real Estate Transactions Clasns 3 Power Point

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11

PURCHASE-AND-SALEPURCHASE-AND-SALEAGREEMENTS:AGREEMENTS:FOLLOWING THE MONEY FOLLOWING THE MONEY



22

THE PURCHASE PRICE THE PURCHASE PRICE

How do you describe it in theHow do you describe it in thecontract?contract?



33

Calculatin A!ordabilityCalculatin A!ordability

"hat does it cost to buy a house?"hat does it cost to buy a house?



**

ONGOING COSTS OFONGOING COSTS OF

OWNERSHIPOWNERSHIP"hat are these?"hat are these?



++

ONGOING COSTS OFONGOING COSTS OF

OWNERSHIPOWNERSHIP,ro-ected (ort a e ,ay(ents',ro-ected (ort a e ,ay(ents'casualty insurance ,re(iu(s'casualty insurance ,re(iu(s',ro,erty ta)es',ro,erty ta)es'(aintenance costs' and(aintenance costs' and

ho(eowner or coo,.condoho(eowner or coo,.condoassociation dues/association dues/



00

or(ula or Pricinor(ula or Prici n



or(ula Pricinor(ula Pricin

A h$&e-(%il"er &i,htA h$&e-(%il"er &i,htp%r hase a rea,e '$r a!p%r hase a rea,e '$r a!a,ree" s%& per (%il"a(lea,ree" s%& per (%il"a(lel$t.*"e/!i!, (%ii"a(le as thel$t.*"e/!i!, (%ii"a(le as the!%&(er $' l$ts the l$ al!%&(er $' l$ts the l$ al

,$0er!&e!t all$+s i!,$0er!&e!t all$+s i!appr$0i!, the (%il"er*sappr$0i!, the (%il"er*ss%("i0isi$! &aps%("i0isi$! &ap



44

F$r&%la '$r Pri i!,F$r&%la '$r Pri i!,

i! ,r$ssi! ,r$ss $r$r () the a re() the a re



1515

Whe! is la!" s$l" ()Whe! is la!" s$l" ()

1%a!tit)21%a!tit)2In this case the defendant entered intoIn this case the defendant entered intoa written contract with the plainti bya written contract with the plainti bywhich he granted and sold andwhich he granted and sold andconveyed to him wood, timber and treesconveyed to him wood, timber and treesnow growing standing and being upon anow growing standing and being upon adescribed parcel of land being 20 acresdescribed parcel of land being 20 acresof land more or less o from the Southof land more or less o from the Southend of a farm. Seller agreed toend of a farm. Seller agreed tocovenant and warrant and defend thecovenant and warrant and defend thetitle to the wood timber and trees soldtitle to the wood timber and trees soldtransferred and conveyed against anytransferred and conveyed against any

person or persons who challenged title person or persons who challenged title



1111

Prior to the execution of the contract duringPrior to the execution of the contract duringseveral years of litigation between theseveral years of litigation between thedefendant and the owners of ad oining woodsdefendant and the owners of ad oining woodswho also claimed title to all of the defendant!swho also claimed title to all of the defendant!slot, everyone was aware of these claims.lot, everyone was aware of these claims."uestion as to where the west line should be"uestion as to where the west line should bedrawn. #he parties discussed the dispute butdrawn. #he parties discussed the dispute butnevertheless executed the contract. #henevertheless executed the contract. #he

buyer after closing on the property, cut thebuyer after closing on the property, cut thewood timber and trees to the line pointed outwood timber and trees to the line pointed outto him when he inspected it with the seller.to him when he inspected it with the seller.

$n action was commenced against him by the $n action was commenced against him by theowners of the ad oining lands for trespass andowners of the ad oining lands for trespass andresulted in a udgment against him for theresulted in a udgment against him for the

value of the trees that he had cut andvalue of the trees that he had cut andremoved, all of which had been within the lineremoved, all of which had been within the lineas indicated to him.as indicated to him. %uyer therefore sought%u yer therefore soughtto recover from the seller and now pay anto recover from the seller and now pay anexpense on the trespass action.ex pense on the trespass action.



1212

MULLEN v WASHBURNMULLEN v WASHBURN224 N.Y. 413, 121 N.E. 59224 N.Y. 413, 121 N.E. 59(1918)(1918)

#he east line of the property which is the line in#he east line of the property which is the line indispute, was described as being at the limit ofdispute, was described as being at the limit ofthe lands now or formerly owned by anotherthe lands now or formerly owned by anotherfarmer. &onuments or other outward evidencefarmer. &onuments or other outward evidence

of location were not presented. #he court heldof location were not presented. #he court heldthat where words of general description arethat where words of general description areused in the deed, oral evidence may be resortedused in the deed, oral evidence may be resortedto locate the premises intended to be conveyed.to locate the premises intended to be conveyed.#he parole evidence is not given to contradict#he parole evidence is not given to contradict

or vary the language, but to identify the sub ector vary the language, but to identify the sub ectmatter and to show what the grantor intendedmatter and to show what the grantor intendedto convey. #hus parole evidence is used toto convey. #hus parole evidence is used tode'ne and would be permitted to be used de'ne and would be permitted to be used



1313

H$+ pre isel) &%stH$+ pre isel) &%st

the pr$pert) (ethe pr$pert) (e"es ri(e"2"es ri(e"2%()$*I$+ v $S-) 2 $./.2d 0 1, 3%()$*I$+ v $S-) 2 $./.2d 0 1, 3+.).S.2d 1 4 5678+.).S.2d 1 4 5678Plainti sought speci'c performance ofPlainti sought speci'c performance ofa contract for the sale of real propertya contract for the sale of real propertydescribed in that contract as 07 acresdescribed in that contract as 07 acresand a reference to where it is recorded.and a reference to where it is recorded.-xcept camp with approximately 2 9-xcept camp with approximately 2 9acres seller gives right of way in front ofacres seller gives right of way in front ofcamp on :iverban;. #he lower courtcamp on :iverban;. #he lower courtheld that this description washeld that this description wasinade<uate to satisfy the statute ofinade<uate to satisfy the statute offraudsfrauds



1#1#

BOYAJIAN v CASEY BOYAJIAN v CASEY

. #he court held that the description of the. #he court held that the description of the property need not be as exact and detailed as a property need not be as exact and detailed as adescription in a deed. It need only be describeddescription in a deed. It need only be describedwith such de'niteness and exactness as werewith such de'niteness and exactness as were

permitted to be identi'ed with reasonable permitted to be identi'ed with reasonablecertainty. &oreover, the court said if this test iscertainty. &oreover, the court said if this test ismet all evidence would be admissible to enablemet all evidence would be admissible to enablethe court to identify precisely the property tothe court to identify precisely the property towhich the contract relates. =ere the mainwhich the contract relates. =ere the main

parcel was ade<uately described. parcel was ade<uately described. #he only#he onl y<uestion was what was included in the 2 9 acre<uestion was what was included in the 2 9 acrecamp. =owever, because the contract furthercam p. =owever, because the contract furtherspeci'ed the general location of the camp,speci'ed the general location of the camp,

parole evidence could be used to de'ne its parole evidence could be used to de'ne itsexact locationexact location ..



1*1*

"hat is the role o the sur6ey?"hat is the role o the sur6ey?"ho should de(and the"ho should de(and thesur6ey? "ho can rely on thesur6ey? "ho can rely on the

sur6ey? "ho wants the titlesur6ey? "ho wants the titlesearch?search?"hat is the role o"hat is the role o

re,resentations and warrantiesre,resentations and warranties



1+1+

The initial 7e,osit/ The initial 7 e,osit/

The a&$%!t $' the i!itialThe a&$%!t $' the i!itial"ep$sit is !e,$tia(le th$%,h"ep$sit is !e,$tia(le th$%,hstr$!,l) i!3%e! e" () l$ alstr$!,l) i!3%e! e" () l$ al

%st$& a!" pra ti e.%st$& a!" pra ti e. 44G$$" F%!"sG$$" F%!"s



1010

Allocatin the Cost oAllocatin the Cost oSettle(ent Ser6icesSettle(ent Ser6ices8etween the Parties8etween the Parties



11

Pro Rations o Pro,erty Ta)es'Pro Rations o Pro ,erty Ta)es'Casualty Insurance andCasual ty Insurance and9ort a e Pay(ents9or t a e Pay(ents



1414

I%A%CI%:I%A%CI%:

C;%TI%:E%CIESC;%TI%:E%CIES



2525

The De'a%lt R%le: I! theThe De'a%lt R%le: I! thea(se! e $' a /!a! i!,a(se! e $' a /!a! i!,

$!"iti$! the tra!sa ti$! is$!"iti$! the tra!sa ti$! isass%&e" t$ (e a!ass%&e" t$ (e a! all ashall ashtra!sa ti$!.tra!sa ti$!.



2121

sellers sh$%l" a!" %s%all) "$sellers sh$%l" a!" %s%all ) "$re5%ire a represe!tati$! 'r$&r e5%ire a represe!tati$! 'r$&the (%)ers that the) p$ssessthe (% )ers that the) p$ssessa ess t$ s%6 ie!t '%!"s t$a ess t$ s%6 ie!t '%!"s t$

$&plete their p%r hase$&plete their p%r hase

$(li,ati$!.$(li ,ati$!.



2222

What "$es s%(7e t t$What "$es s%(7e t t$

/!a! i!, &ea!2/!a! i!, &ea!2



2323

8%)ers !ee" a 4s%(7e t t$ /!a! i!,*8%)ers !ee" a 4s%(7e t t$ /!a! i!,*$!"iti$! all$+i!, the& t$ res i!"$!"iti$! all$+i!, the& t$ res i!"

a!" ,et (a # a '%ll re'%!" $' theira!" ,et (a # a '%ll re'%!" $' their"ep$sit i' the) a!*t /!" s%ita(le"ep$sit i' the) a!*t /!" s%ita(le/!a! i!,. 9I! a pr$perl) "ra'te"/!a! i!,. 9I! a pr$perl) "ra'te"sales $!tra t the (%)er has a ri,htsales $!tra t the (%)er has a ri,htt$ a! el the p%r hase $(li,ati$! i't$ a! el the p%r hase $(li,ati$! i'the (%)er ($th 'ails t$ $(tai! a!the (%)er ($th 'ails t$ $(tai! a!a epta(le l$a! $&&it&e!t lettera epta(le l$a! $&&it&e!t letter+ithi! a spe i/e" ti&e a!" the+ithi! a spe i/e" ti&e a!" the(%)er pr$&ptl) !$ti/es the seller $'(%)er pr$&ptl) !$ti/es the seller $'this 'ail%re.this 'ail%re.



2#2#

8asi Fi!a! i!, Ter&s8asi Fi!a! i!, Ter&s

Pri! ipalPri! ipal

I!terestI!terest

P$i!tsP$i!ts <<

M$!thl) pa)&e!tM$!thl) pa)&e!t

A&$rti;ati$!A&$rti;ati$!



2*2*

Fi!a! i!, iss%esFi!a! i!, iss%es

i! l%"e2i! l%"e2



2+2+

Fi!a! i!, iss%esFi!a! i!, iss%es

i! l%"ei! l%"ethe a&$%!t /!a! e"the a&$%!t /!a! e"the i!terestthe i!terestthe ter&s $' the l$a! a!"the ter&s $' the l$a! a!"e6en the or( o the (ort a ee6en the or( o the (ort a e



2020

Three Possible inancin Three Possible inancin

Contin enciesContin encies A =nancin contin encyA =nancin contin ency &a) (e&a ) (e5%ite spe i/5%ite spe i/ in identi yin thein identi yin the

ter(s o the loan the buyer would beter(s o the loan the buyer would beobli ated to acce,t/obli ated to acce,t/It could lea6e those ter(sIt could lea6e those ter(s 4s%(7e t4s%(7e tt$ 8%)er $(tai!i!, satis'a t$r)t$ 8%)er $(tai!i!, satis'a t$r)/!a! i!,/!a! i !, /</<It could call or the buyer to acce,tIt could call or the buyer to acce,t4a0aila(le* /!a! i!,4a0aila(le* /!a! i! ,



22

H$+ &% h e<$rt t$H$+ &% h e<$rt t$

se %re a &$rt,a,e2se %re a &$rt,a,e2



2424

BLASK v MILLERBLASK v MILLER

186 A. .2! 958, 588 N.Y.S.2!186 A. .2! 958, 588 N.Y.S.2!94" (1992)94" (1992) absent an express promise toabsent an ex press promise to

apply to a particular ban; or toa pply to a particular ban; or to

ma;e a speci'ed number of loanma;e a s peci'ed number of loanapplications, a mortgagea pplications, a mortgagecontingency clause only re<uirescontin gency clause only re<uiresa good faith attempt to procure aa good faith attempt to procure aloan in the amount speci'ed.loan in the amount s peci'ed. If aIf acontract sayscontract says diligent e orts asdili gent e orts asthis contract did then somethingthis contract did then somethin g

more than good faith is re<uired.more than good faith is re<uired.



3535

The C$!ti!,e! ) Ris# The C$!ti!,e! ) Ris#

"hen does the Seller bear the"hen does the Seller bear theris>?ris>?

"hen does the 8uyer bear the"hen does the 8uyer bear theris>?ris>?



3131

CREI#H$ON v MILBAUERCREI#H$ON v MILBAUER191 A. .2! 162, 594191 A. .2! 162, 594N.Y.S.2! 185 (1993)N.Y.S.2! 185 (1993)

#he court stated that a mortgage#he court stated that a mortgagecontingency clause creates acontingency clause creates a

condition precedent condition precedent

to theto the

contract of sale. #he burden tocontract of sale. #he burden toestablish that a condition wasestablish that a condition was

prevented or rendered prevented or renderedimpossible in order to avoidimpossible in order to avoidliability of the contract restsliability of the contract restsupon the party see;ing toupon the party see;ing toenforce it.enforce it.



3232

#he court held that when a#he court held that when acondition of a mortgage loancondition of a mortgage loancommitment is not ful'lled throughcommitment is not ful'lled through

no fault of the purchaser!s, theirno fault of the purchaser!s, their

performance is excused so long as performance is excused so long asthey acted in good faith.they acted in good faith.

KA%UR v S$IE&ELKA%UR v S$IE&EL264 A. .2! 6"2, 695 N.Y.S.2!264 A. .2! 6"2, 695 N.Y.S.2!33" (1999)33" (1999)



3333

:ood aith E!ort to:ood aith E!ort to

Procure oanProcure oan 8%)ers are le,all) $(li,ate"8%)ers are le,all) $(li,ate"t$ &a#e the e<$rt $' appl)i!,t$ &a#e the e<$rt $' appl)i!,

i! ,$$" 'aith '$r a l$a! at ai! ,$$" 'aith '$r a l$a! at areas$!a(le !%&(er $' le!"ersreas$!a(le !%&(er $' le!"ersa!" $&pleti!, the re5%ire"a!" $&pleti!, the re5%ire"

appli ati$!s '$r /!a! i!,.appli ati$!s '$r /!a! i!,.



3#3#

Is Contin ency to be 8ased onIs Contin ency to be 8ased onA,,lication' Co((it(ent' orA,,lication' Co((it(ent' orundinundin



3*3*

8%)ers a! &a#e their $(li,ati$!s8%)ers a! &a#e their $(li,ati$!st$ p%r hase $!ti!,e!t $! appl)i!,t$ p%r hase $!ti!,e!t $! appl)i!,'$r a l$a! re ei0i!, a l$a!'$r a l$a! re ei0i!, a l$a!

$&&it&e!t $r a t%all) $(tai!i!, a$&&it&e!t $r a t%all) $(tai!i!, al$a!. 8%)ers pre'er the /!a! i!,l$a!. 8% )ers pre'er the /!a! i!,

$!ti!,e! ) t$ (e (ase" $! the l$a!$!ti! ,e! ) t$ (e (ase" $! the l$a!

a t%all) (ei!, '%!"e". There is aa t%all ) (ei!, '%!"e". There is a+$rl" $' "i<ere! e (et+ee! &$!e)+$rl" $' "i<ere! e (et+ee! &$!e )pr$&ise" a!" &$!e) "eli0ere".pr$&ise" a!" &$!e) "eli0ere".



3+3+

T+$ #e) $!ti!,e! iesT+$ #e) $!ti!,e! ies

pr$pert) appraisalpr$pert) appraisal andand re"itre"ithe # he #



3030

The inancin The inancin

Contin ency Ti(e PeriodContin ency Ti(e Period



33

En orceability o inancinEn orceability o inancinContin ency Ti(inContin ency Ti(inPro6isionsPro6isions



3434

PURCHASE@A%7@SA EPURCHASE@A%7@SA EA:REE9E%TS THEA:REE9E%TS THE

SU8BECT PR;PERT&SU8BECT PR;PERT&



#5#5

H$+ "$ )$% ass%re )$%rH$+ "$ )$% ass%re )$%rlie!t $' the 5%alit) $'lie!t $' the 5%alit) $'

the s%(7e t pr$pert)2the s%(7e t pr$pert)2



#1#1

1%alit) iss%es i! l%"e:1%alit) iss%es i! l%"e:



#2#2

1%alit) iss%es i! l%"e:1%alit) iss%es i! l%"e:

structural and (echanical issuesstructural and (echanical issuesen6iron(ental issuesen6iron(ental issuestitle issuestitle issues



#3#3

The $!tra t sh$%l":The $!tra t sh$%l":

clari y e),ectationsclari y e),ectationsidenti y who is res,onsible to ,er or( theidenti y who is res,onsible to ,er or( thee),ected acti6itye),ected acti6ityanaly e how de6iations should beanaly e how de6iations should behandledhandleddiscuss how the in or(ation is to bediscuss how the in or(ation is to be

ained and by who(ained and by who(when disclosure is to be discussed/when disclosure is to be discussed/"hich is the best way to handle"hich is the best way to handledisclosure $ by statute or by contract?disclosure $ by statute or by contract?



####

INSPECTIONSINSPECTIONS

FINDING AND CONTRACTINGFINDING AND CONTRACTINGWITH A GOOD INSPECTORWITH A GOOD INSPECTOR

WHAT TYPE OF INSPECTION2WHAT TYPE OF INSPECTION2WHAT DOES IT INCLUDEWHAT DOES IT INCLUDE ??

8r$#ers8r$#ers !! i!spe ti$!si!spe ti$!s



#*#*

"HE% I%SPECTI;%S"HE% I%SPECTI;%S

SH;U 7 TADE P ACESH;U 7 TADE P ACE be ore contractinbe ore contractin

within a wee> or two o si nin thewithin a wee> or two o si nin thecontractcontract

A ter re(ediationA ter re(ediation

8e ore closin8e ore closin



#+#+

I%SPECT;RS< 7E E%SESI%SPECT;RS< 7E E%SES

A%7 I9ITS T; IA8I IT&A%7 I9ITS T; IA8I IT&the de ect wasn<t there when thethe de ect wasn<t there when theins,ection too> ,laceins,ection too> ,lacethe de ect wasn<t the sort the ins,ectionthe de ect wasn<t the sort the ins,ectionwas desi ned to co6erwas desi ned to co6erthe seller should bear the loss orthe seller should bear the loss orconcealin or ailin to re6eal the de ectconcealin or ailin to re6eal the de ectthe buyer didn<t rely on the re,ort andthe buyer didn<t rely on the re,ort and

would ha6e ,urchased anyway andwould ha6e ,urchased anyway andthe ins,ection was done in athe ins,ection was done in awor>(anli>e way/ It wasn<t ne li entwor>(anli>e way/ It wasn<t ne li ent



#0#0

THE A" I% %E" &;RD THE A" I% %E" &;RD

E<e ti0e De . => ?@@ allE<e ti0e De . => ?@@ alli!"i0i"%als $r $ther (%si!essi!"i0i"%als $r $ther (%si!ess

e!tities $!"% ti!, resi"e!tiale!tities $!"% ti!, resi"e!tialh$&e i!spe ti$!s $! (%il"i!,sh$&e i!spe ti$!s $! (%il"i!,s$!tai!i!, $!e t$ '$%r "+elli!,$!tai!i!, $!e t$ '$%r "+elli!,

%!its &%st (e li e!se" p%rs%a!t t$%!its &%st (e li e!se" p%rs%a!t t$

Arti le >?-8 $' the Real Pr$pert)Arti le >?-8 $' the Real Pr$pert)La+La+RPL BBB-"RPL BBB-" et seF/et seF/

http://web2.westlaw.com/find/default.wl?vc=0&ordoc=0331910230&rp=%2Ffind%2Fdefault.wl&DB=1000129&DocName=NYRLS444%2DD&FindType=L&AP=&fn=_top&rs=WLW8.09&mt=LawSchoolPractitioner&vr=2.0&sv=Split





##

THE A" I% %E" &;RD THE A" I% %E" &;RD

H$+e0er the stat%te pr$0i"e" !$ ,%i"a! e as t$ +hat is theH$+e0er the stat%te pr$0i"e" !$ ,%i"a! e as t$ +hat is thele,al e<e t $' a p%r haser rel)i!, $! the h$&e i!spe ti$!le,al e<e t $' a p%r haser rel)i!, $! the h$&e i!spe ti$!rep$rt $' a! %!li e!se" i!"i0i"%al. 8ra") 0. P$sse NYL = @rep$rt $' a! %!li e!se" i!"i0i"%al. 8ra") 0. P$sse NYL = @

$l= p?@$l= p?@

Carney 6/ Coull 8uildin Ins,ections Inc/' Rich(ond Co/ Inde) %o/ SCRCarney 6/ Coull 8uildin Ins,ections Inc/' Rich(ond Co/ Inde) %o/ SCR+ .50/ Custo(er i(ited to ilin Co(,laint with 7e,art(ent o State @@+ .50/ Custo(er i(ited to ilin Co(,laint with 7e,art(ent o State @@I!spe t$rI!spe t$r 9ay i(it iability to ee Char ed @@9ay i(it iability to ee Char ed @@ I!spe t$r sI!spe t$r s ailure toailure toCo(,ly with RP Art/ 12@8 Constitutes 7ece,ti6e Act and Practice UnderCo(,ly with RP Art/ 12@8 Constitutes 7ece,ti6e Act and Practice Under:8 Art/ 3#4:8 Art/ 3#4

The court urther ound that The court urther ound thatS i! e i! re,ar" t$ $ther li e!si!, stat%tes the Le,islat%reS i! e i! re,ar" t$ $ther li e!si!, stat%tes the Le,islat%re

has spe i/ all) retai!e" $&&$!-la+ a%ses $' a ti$! '$rhas spe i/ all) retai!e" $&&$!-la+ a%ses $' a ti$! '$ri!7%re" parties the Le,islat%re s sile! e i! this re,ar" &%sti!7%re" parties the Le,islat%re s sile! e i! this re,ar" &%st&ea! that all $&&$! la+ a%ses $' a ti$! are !$ l$!,er&ea! that all $&&$! la+ a%ses $' a ti$! are !$ l$!,erappli a(le a!" that a! i!7%re" $!s%&er is li&ite" t$ /li!, aappli a(le a!" that a! i!7%re" $!s%&er is li&ite" t$ /li!, a

$&plai!t +ith the "epart&e!t $' state i.e. the stat%te has$&plai!t +ith the "epart&e!t $' state i.e. the stat%te haspre-e&pte" a!) ri,ht t$ $&&e! e a i0il a ti$! '$r "a&a,es.pre-e&pte" a!) ri,ht t$ $&&e! e a i0il a ti$! '$r "a&a,es.



#4#4

NY Dis l$s%reNY Dis l$s%re

State&e!tState&e!t



*5*5

Represe!tati$!s a!"Represe!tati$!s a!"

Warra!tiesWarra!ties

"hat<s the di!erence?"hat<s the di!erence?



*1*1

I% 9ADI%:I% 9ADI%: :-P:-S-+#$#I(+S,:-P:-S-+#$#I(+S , SE ERS ARE 9ADI%: STATE9E%TSSE ERS ARE 9ADI%: STATE9E%TS

A8;UT THEA8;UT THE >::-+#>::-+#(+/I#I(+(+/I#I(+ ; THE PR;PERT&/; THE PR;PERT&/I% PR;GI7I%:I% PR;GI7I%: ?$::$+#I-S?$::$+#I-S ''

SE ERS 9A& 8E 9ADI%:SE ERS 9A& 8E 9ADI%:P:(&IS-S $%(># -@IS#I+A (:P:(&IS-S $%(># -@IS#I+A (:B>#>:- (+/I#I(+SB>#>:- (+/I#I(+S //



*2*2

RA9I%: THE 8U&ER<SRA9I%: THE 8U&ER<SRE9E7IES U%7ER A%RE9E7IES U%7ER A%I%SPECTI;% C;%TI%:E%C&I%SPECTI;% C;%TI%:E%C&C AUSE I% A PURCHASE@A%7@C AUSE I% A PURCHASE@A%7@SA E C;%TRACTSA E C;%TRACT



*3*3

Sta!"ar"s $'Sta!"ar"s $'

A epta! eA epta! e

A(s$l%te Dis reti$! $rA(s$l%te Dis reti$! $rReas$!a(le Dissatis'a ti$!2Reas$!a(le Dissatis'a ti$!2

A ti0e $r Passi0e Re&$0al $'A ti0e $r Passi0e Re&$0al $'I!spe ti$! C$!ti!,e! )2I!spe ti$! C$!ti!,e! )2Ta#e It $r Lea0e It.* $rTa#e It $r Lea0e It.* $rRes$l%ti$! Peri$" F$r&ats2Res$l%ti$! Peri$" F$r&ats2



*#*#

PRE7ICATES ; IA8I IT& ;RPRE7ICATES ; IA8I IT& ;R

SE ERS ; 7E ECTIGESE ERS ; 7E ECTIGEH;USESH;USES

CA EAT EMPTORCA EAT EMPTOR AS IS ClauseAS IS Clause



****

As Is* CLAUSESAs Is* CLAUSES

An Jas is< clause is (eant to ne ateAn Jas is< clause is (eant to ne atethe e)istence o any re,resentationsthe e)istence o any re,resentations

by the seller as to the ,articularby the seller as to the ,articularcondition' =tness and ty,e ocondition' =tness and ty,e oconstruction o the ,re(ises sold/ Inconstruction o the ,re(ises sold/ Inthis way sellers ho,e to disclai( anythis way sellers ho,e to disclai( any

re,resentations or warranties and're,resentations or warranties and'thus' shi t the ris> o ,ro,ertythus' shi t the ris> o ,ro,ertyde ects entirely onto the buyer/de ects entirely onto the buyer/



*+*+

"hat does the Jis< in Jas"hat does the Jis< in Jas

is< re ers tois< re ers to

22



*0*0

"hat does the Jis< in Jas"hat does the Jis< in Jas

is< re ers tois< re ers to

22

The 4is* i! 4as is* re'ers t$ theThe 4is* i! 4as is* re'ers t$ the$!"iti$! $' the pr$pert) $!$!"iti$! $' the pr$pert) $!

the "a) the $!tra t +asthe "a) the $!tra t +ase!tere" i!t$ $r the pr$pert)e!tere" i!t$ $r the pr$pert)i!spe te".i!spe te".



**

L' ' * + - E/0 0 +L' ' * + - E/0 0 +

A* I* C 7* *A* I* C 7* *

%ot a license to lie/%ot a license to lie/7i!erin 6iews on whether seller is7i!erin 6iews on whether seller is

absol6ed ro( duty to disclose/absol6ed ro( duty to disclose/ The seller cannot obstruct The seller cannot obstructins,ection/ins,ection/

The seller cannot lie in res,onse to The seller cannot lie in res,onse toa Fuestion about a condition on thea Fuestion about a condition on the,ro,erty/,ro,erty/



*4*4

Ne+ Y$r# La+Ne+ Y$r# La+

The ,e!eral r%le i! Ne+ Y$r# isThe ,e!eral r%le i! Ne+ Y$r# isthat the 0e!"$r has !$ "%t) t$that the 0e!"$r has !$ "%t) t$"is l$se %!less there are hi""e!"is l$se %!less there are hi""e!"e'e ts +hi h he #!$+s $r"e'e ts +hi h he #!$+s $rsh$%l" ha0e #!$+! +hi h &a)sh$%l" ha0e #!$+! +hi h &a)prese!t a! %!reas$!a(le ris# $'prese!t a! %!reas$!a(le ris# $'har& t$ pers$!s $! the pre&iseshar& t$ pers$!s $! the pre&ises+hi h he &a) a!ti ipate that the+hi h he &a) a!ti ipate that the0e!"ee +ill !$t "is $0er.0e!"ee +ill !$t "is $0er.



+5+5


:(/$S v &$+I#$:$S:(/$S v &$+I#$:$S > J A.D.?" =B> ?> J A.D.?" =B> ?N.Y.S.?" K> >[email protected].?" K> >JJ@The $%rt hel" that +hile a ,e!eral &er,erThe $%rt hel" that +hile a ,e!eral &er,er

la%se +ill !$t $perate as a (ar t$ par$lela%se +ill !$t $perate as a (ar t$ par$le

e0i"e! e $' 'ra%" i! the i!"% e&e!t +heree0i"e! e $' 'ra%" i! the i!"% e&e!t +herepartiesparties e pressl) "is lai& relia! ee pressl) "is lai& relia! e $! the$! thereprese!tati$!s alle,e" t$ (e 'ra%"%le!t par$lereprese!tati$!s alle,e" t$ (e 'ra%"%le!t par$lee0i"e! e is th$se represe!tati$!s +ill !$t (ee0i"e! e is th$se represe!tati$!s +ill !$t (ea"&itte"a"&itte" .. =owever, the court states that a party see;ing=owever, the court states that a party see;ingto avoid a speci'c disclaimer clause mustto avoid a speci'c disclaimer clause mustdemonstrate that the facts alleged to have beendemonstrate that the facts alle ged to have beenfraudulently concealed could not be discoveredfraudulentl y concealed could not be discoveredthrough the exercise of reasonable diligencethrou gh the exercise of reasonable diligence ..



+1+1

RO AS v MANI$ARASRO AS v MANI$ARAS 1*41*4

A/7/2d 3#1' **2 %/&/S/2d +1A/7/2d 3#1' **2 %/&/S/2d +1K1445LK1445LC C if the facts represented are notif the facts represented are not

matters peculiarly within the partiesmatters peculiarly within the parties;nowledge, and the other party has the;nowledge, and the other party has themeans available to him of ;nowing, bymeans available to him of ;nowing, bythe exercise of ordinary intelligence, thethe exercise of ordinary intelligence, thetruth or the real <uality of the sub ect oftruth or the real <uality of the sub ect ofthe representation, he must ma;e use ofthe representation, he must ma;e use ofthose means, or he will not be heard tothose means, or he will not be heard tocomplain that he induced to enter thecomplain that he induced to enter thetransaction by misrepresentations.Dtransaction by misrepresentations.D



+2+2

D$ tri!e $' Mer,erD$ tri!e $' Mer,er

"hat does it (ean?"hat does it (ean?

How does it unction?How does it unction?



+3+3

7octrine o 9er er7octrine o 9er er

This doctrine ,ro6ides that This doctrine ,ro6ides thate6erythin that co(es be ore thee6erythin that co(es be ore the

closin is (er ed into the docu(entsclosin is (er ed into the docu(entse)chan ed at the closin / As ae)chan ed at the closin / As aconseFuence' all ri hts' warrantiesconseFuence' all ri hts' warrantiesand obli ations ro( the e)ecutoryand obli ations ro( the e)ecutory

contract are no lon er o,erati6econtract are no lon er o,erati6ebetween the ,arties/between the ,arties/



+#+#

E epti$!s t$ Mer,erE epti$!s t$ Mer,er

non@title (atters' e/ / ,ay(ent onon@title (atters' e/ / ,ay(ent obro>er' certain re,airsbro>er' certain re,airs

7!,7!,'* ,'* ,

0+ ':- * ' - 0+ 0 +0+ ':- * ' - 0+ 0 +* .* .



+*+*


%o ,ost closin ad-ust(ents'%o ,ost closin ad-ust(ents' ??SMITH STREET 8ROO LYNSMITH STREET 8ROO LYN

CORP. 0 8AYSIDE FUEL OILCORP. 0 8AYSIDE FUEL OILCORPORATIONCORPORATION 272 $./.2d272 $./.2d263, 75 +.).S.2d 70 4 5558263, 75 +.).S.2d 70 4 5558



++++


M'* ;M'* ; when one o the ,artieswhen one o the ,artiesde(onstrates (utual (ista>e in the dra tinde(onstrates (utual (ista>e in the dra tino the contract docu(ents/ This (ust beo the contract docu(ents/ This (ust be

established by clear and con6incin e6idenceestablished by clear and con6incin e6idencethatthat$ the instru(ent does not con or( to the intent othe instru(ent does not con or( to the intent o

both ,arties/both ,arties/$ The clai(ant was (ista>en as to the content o the The clai(ant was (ista>en as to the content o the

instru(ent and the other ,arty >new o the (ista>einstru(ent and the other ,arty >new o the (ista>ebut re(ained silent' orbut re(ained silent' or

$ The clai(ant was (ista>en o the actual content The clai(ant was (ista>en o the actual contentdue to the raudulent aMr(ati6e beha6ior o thedue to the raudulent aMr(ati6e beha6ior o theother ,arty/other ,arty/



+0+0


C+ R':- * ;C+ R':- * ; This a,,lies This a,,lieswhen the seller<s ,er or(ancewhen the seller<s ,er or(ance

in6ol6es so(e act collateral toin6ol6es so(e act collateral tothe con6eyance o title' with thethe con6eyance o title' with theresult that those obli ationsresult that those obli ations

sur6i6e the deed and are notsur6i6e the deed and are note)tin uished by it/ E/ / re(o6ale)tin uished by it/ E/ / re(o6alo eFui,(ent ro( the ,ro,erty/o eFui,(ent ro( the ,ro,erty/



++

C+ 0 + , S 7 + !C+ 0 + , S 7 + !B7' ! W ' *B7' ! W ' *

Consu(ers who ,urchase newly builtConsu(ers who ,urchase newly builtho(es ro( ,ro essional ho(e@buildersho(es ro( ,ro essional ho(e@buildersor subdi6ided lots ro( ,ro essionalor subdi6ided lots ro( ,ro essionalde6elo,ers are o ten ,rotected byde6elo,ers are o ten ,rotected bystatutory warranties' raud' ne li ence'statutory warranties' raud' ne li ence'state dece,ti6e trade ,ractices laws'state dece,ti6e trade ,ractices laws'and court@i(,osed i(,lied warranties oand court@i(,osed i(,lied warranties ohabitability and wor>(anli>ehabitability and wor>(anli>econstruction/construction/



+4+4

C+ 0 + , S 7 + !C+ 0 + , S 7 + !B7' ! W ' *B7' ! W ' *

There is also the creation o There is also the creation owarranties by the state $ hardlywarranties by the state $ hardly

i(,lied $ such as thei(,lied $ such as the H$&eH$&eO+!ers Warra!t) Pr$,ra&.O+!ers Warra!t) Pr$,ra&. ItItis a 6oluntary ,ro ra(/ Theis a 6oluntary ,ro ra(/ The

builder ,ays /33N o the salesbuilder ,ays /33N o the sales,rice o the house to the H;",rice o the house to the H;"Cor, as an insurance ,olicy/Cor, as an insurance ,olicy/



0505

9ISREPRESE%TATI;%S9ISREPRESE%TATI;%S

The seller $' a pre-$+!e"The seller $' a pre-$+!e"h$%se ,e!erall) pr$te te" ()h$%se ,e!erall) pr$te te" ()

the r%le $'the r%le $' caveat emptor,caveat emptor, a!a!'$r'eit that pr$te ti$! ()'$r'eit that pr$te ti$! ()&a#i!, a &isreprese!tati$!&a#i!, a &isreprese!tati$!

"hat are the ele(ents o raud?"hat are the ele(ents o raud?



0101

Ele&e!ts $' Fra%"Ele&e!ts $' Fra%"

A re,resentation has been (adeA re,resentation has been (ade The re,resentation is alse The re,resentation is alse

The re,resentation is (aterial The re,resentation is (aterial The s,ea>er >nows that it is alse The s,ea>er >nows that it is alse The s,ea>er intends or the hearer to The s,ea>er intends or the hearer torely on the alse state(entrely on the alse state(ent

The hear could reasonably antici,ate The hear could reasonably antici,ateto rely on the state(entto rely on the state(entConseFuent in-uryConseFuent in-ury

$$ E B7



0202

$- E + B7$- E + B7R ' 0R ' 0

is the (%)er e!title" t$ rel)is the (%)er e!title" t$ rel)$! the seller*s$! the seller*s

&isreprese!tati$! +he! !$&isreprese!tati$! +he! !$$!e st$ppe" her 'r$&$!e st$ppe" her 'r$&

$!tra ti!, '$r a pr$'essi$!al$!tra ti!, '$r a pr$'essi$!al

i!spe ti$!2i!spe ti$!2



0303

CO%ELAN v NA$HANIEL 164CO%ELAN v NA$HANIEL 164M'*0.2! 5"<, 624 N.Y.S.2! 514M'*0.2! 5"<, 624 N.Y.S.2! 514(1995)(1995)

#he court discussed whether a constructive#he court discussed whether a constructive

fraud could have existed here. It stated thatfraud could have existed here. It stated thatsuch a cause of action re<uires a con'dentialsuch a cause of action re<uires a con'dentialrelationship or a situation where one party hasrelationship or a situation where one party hassuperior ;nowledge over the other. In this casesuperior ;nowledge over the other. In this casethere was no misrepresentation of factthere was no misrepresentation of factregarding termites or chlordane. Plainti s hadregarding termites or chlordane. Plainti s hadaccess to the same information as theaccess to the same information as thedefendants and defendants informed plainti sdefendants and defendants informed plainti sof all they ;new on the sub ect prior to theof all they ;new on the sub ect prior to theclosing. >nder the circumstances the sub ectclosing. >nder the circumstances the sub ectclaims do not lie.claims do not lie.



0#0#


AA seller*s att$r!e) $+es a "%t) t$ a !$!- lie!tseller*s att$r!e ) $+es a "%t) t$ a !$!- lie!t(%)er +h$ the att$r!e) #!$+s $r sh$%l" #!$+(% )er +h$ the att$r!e) #!$+s $r sh$%l" #!$++$%l" rel) $! the att$r!e) i! his $r her+$%l" rel ) $! the att$r!e) i! his $r herpr$'essi$!al apa it).pr$'essi$!al apa it). The %& Court o A,,eals has The %& Court o A,,eals hasheld that an attorney (ay owe a duty to s,eci=c non@held that an attorney (ay owe a duty to s,eci=c non@clients who rely on the attorney<s re,resentations/clients who rely on the attorney<s re,resentations/ AA"%t) is reate" +he!:"%t ) is reate" +he!:

There is an awareness by the (a>er o the state(ent There is an awareness by the (a>er o the state(entthat it is to be used or a ,articular ,ur,osethat it is to be used or a ,articular ,ur,ose

There is reliance by a >nown ,arty on the state(ent in There is reliance by a >nown ,arty on the state(ent inurtherance o that ,ur,ose andurtherance o that ,ur,ose and

There is so(e conduct by the (a>er o the state(ent There is so(e conduct by the (a>er o the state(entlin>in it to the relyin ,arty and e6incin itslin>in it to the relyin ,arty and e6incin itsunderstandin o that reliance/understandin o that reliance/



0*0*

9A%7ATE7 SE ER9A%7ATE7 SE ER

7ISC ;SURE ; 7E ECTIGE7ISC ;SURE ; 7E ECTIGEC;%7ITI;%SC;%7ITI;%S

In (ost states the ordinary ho(eIn (ost states the ordinary ho(eseller is le ally bound to discloseseller is le ally bound to disclose

ully all >nown' (aterial' latentully all >nown' (aterial' latentde ects not >nown or readilyde ects not >nown or readily

a,,arent to the buyera,,arent to the buyer



0+0+

Material De'e ts a!" D%t)Material De'e ts a!" D%t)

t$ Dis l$set$ Dis l$se(P-E$+/ v +$#=$+I-E 71 &isc.2d 06, 721(P-E$+/ v +$#=$+I-E 71 &isc.2d 06, 721

+.).S.2d 1 4 55 8+.).S.2d 1 4 55 8

#he ourt found that in +ew )or;, a party has#he ourt found that in +ew )or;, a party hasduty to spea; in three situationsFduty to spea; in three situationsF$ where the party has made a partial or ambiguouswhere the party has made a partial or ambiguous

statement on the theory that once a party hasstatement on the theory that once a party hasunderta;en to mention a relevant fact to the otherunderta;en to mention a relevant fact to the other

party and can not give a half truthG party and can not give a half truthG$ the party stands in a 'duciary or con'dentialthe party stands in a 'duciary or con'dential

relationship with each otherGrelationship with each otherG$ where one party has superior ;nowledge notwhere one party has superior ;nowledge not

readily available to the other and ;nows that thereadily available to the other and ;nows that theanther is acting on the basis of mista;enanther is acting on the basis of mista;en;nowledge.;nowledge.

Di l$ i! hDi l$ i! th



0000

Dis l$si!, theDis l$si!, thePrese! e $' Gh$stsPrese! e $' Gh$sts

#he court stated that where a condition#he court stated that where a conditionwhich has been created by the sellerwhich has been created by the sellermaterially impairs the value of thematerially impairs the value of the

contract and is peculiar within thecontract and is peculiar within the;nowledge of the seller or unli;ely to be;nowledge of the seller or unli;ely to bediscovered by a prudent purchaserdiscovered by a prudent purchaserexercising due care with respect to theexercising due care with respect to thesub ect transaction, nonHdisclosuresub ect transaction, nonHdisclosure

constitutes a basis for recision as aconstitutes a basis for recision as amatter of e<uity.matter of e<uity. S#$&%( SJ) $ JE-) 75 $./.2d 2 1,S#$&%( SJ) $ JE-) 75 $./.2d 2 1,

62 +.).S.2d 762 4 55 862 +.).S.2d 762 4 55 8

M% )$% "i l$M% t )$% "i l$



00

M%st )$% "is l$se aM%st )$% "is l$se a9sti,&a $! the9sti,&a $! thepr$pert)2pr$pert)2



0404

acts O Issues Connie sold a house toacts O Issues Connie sold a house toDitty ri ht a ter Connie s teena eDitty ri ht a ter Connie s teena e

dau hter was ra,ed at >ni e ,oint he thedau hter was ra,ed at >ni e ,oint he thehouse/ Ditty also has a teena e dau hter/house/ Ditty also has a teena e dau hter/A ter the closin ' Ditty learned o theA ter the closin ' Ditty learned o therecent ra,e and another one ne)t door/recent ra,e and another one ne)t door/"ithin se6eral (onths there were two"ithin se6eral (onths there were two(ore in the nei hborhood/ Ditty sued or(ore in the nei hborhood/ Ditty sued ornon disclosure o sti (ati in e6ents/non disclosure o sti (ati in e6ents/

R & ") '$ ' il% t$R & ") '$ ' il% t$



55

Re&e") '$r 'ail%re t$Re&e") '$r 'ail%re t$"is l$se"is l$se

A(se!t a seller*s e pressA(se!t a seller*s e press+arra!t) i! the $!tra t the+arra!t) i! the $!tra t the

(%)er*s s$le re&e") '$r a!(%)er*s s$le re&e") '$r a!%!"is l$se" "e'e t is%!"is l$se" "e'e t isres issi$!res issi$!

St t t 7 ti tSt t t 7 ti t



11

Statutory 7uties toStatutory 7uties to7isclose7isclose

Interstate and Sales ullInterstate and Sales ull7isclosure Act7isclosure Act

CHAPTER #*+ S/ *334@A REACHAPTER #*+ S/ *334@A REAPR;PERT&@@7ISC ;SURE ;PR;PERT&@@7ISC ;SURE ;7E ECTS A,,ro6ed %o6e(ber 13'7E ECTS A,,ro6ed %o6e(ber 13'

2551' e!ecti6e as ,ro6ided in2551' e!ecti6e as ,ro6ided insectionsection

Fi t% $! thFi t%res $! the



22

Fi t%res $! theFi t%res $! thePr$pert)Pr$pert)

"hat is a =)ture?"hat is a =)ture?

Is it included in the sale o theIs it included in the sale o the,ro,erty?,ro,erty?

CASUALTY LOSSESCASUALTY LOSSES



33

CASUALTY LOSSESCASUALTY LOSSESDURING THE EQECUTORYDURING THE EQECUTORYPERIODPERIOD

"hat ha,,ens i the ho(e burns"hat ha,,ens i the ho(e burnsdown durin the e)ecutorydown durin the e)ecutory

,eriod?,eriod?



##

E5%ita(le C$!0ersi$!E5%ita(le C$!0ersi$!

"hat is it?"hat is it?



**

E5%ita(le C$!0ersi$!E5%ita(le C$!0ersi$!

8oth ,arties ha6e the ri ht to deal with8oth ,arties ha6e the ri ht to deal withtheir res,ecti6e interests' that is totheir res,ecti6e interests' that is to$ buybuy$ sellsell$ assi nassi n$ ,led e,led e

$ (ort a e(ort a e$ de6isede6ise$ insureinsure

CASUALTY LOSSESCASUALTY LOSSES



++

CASUALTY LOSSESCASUALTY LOSSESDURING THE EQECUTORYDURING THE EQECUTORYPERIODPERIOD

I both ,arties ha6e an interest inI both ,arties ha6e an interest inthe ,ro,erty' who bears the ris>the ,ro,erty' who bears the ris>

o loss durin the e)ecutoryo loss durin the e)ecutory,eriod/ This ris>s include,eriod/ This ris>s include$ =re=re$

stor(stor($ ta)esta)es$ sudden en6iron(ental har(sudden en6iron(ental har(




>niform endor and Purchase of :is; $ct>niform endor and Purchase of :is; $ct found in thefound in theAeneral (bligations Eaw H6 4 8. Part (ne,Aeneral (bligations Eaw H6 4 8. Part (ne,subsection $ states that if neither legal title norsubsection $ states that if neither legal title nor

possession is transferred to the purchaser and the possession is transferred to the purchaser and the property is destroyed without the fault of purchaser property is destroyed without the fault of purchaser

or ta;en by eminent domain, the vendor, that is theor ta;en by eminent domain, the vendor, that is theseller cannot force the contract and the purchaser isseller cannot force the contract and the purchaser isentitled to recover of any portion of the price he hasentitled to recover of any portion of the price he has

paid. If there is only partial ta;ing then neither the paid. If there is only partial ta;ing then neither thevendor nor the purchaser is deprived of the right tovendor nor the purchaser is deprived of the right toenforce the contract with the return proHrated. #hat isenforce the contract with the return proHrated. #hat isboth parties can terminate the contract.both parties can terminate the contract.=owever, when legal title or possession have been=owever, when legal title or possession have beentransferred to the purchaser, if all of it is destroyedtransferred to the purchaser, if all of it is destroyedwithout the fault of the seller or is ta;en by eminentwithout the fault of the seller or is ta;en by eminentdomain, the purchaser is not relieved of the duty todomain, the purchaser is not relieved of the duty to

pay the price, nor is he entitled to recover nay portion pay the price, nor is he entitled to recover nay portionthat he has paid.that he has paid.

real estate transactions clasns 3 power point

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