CONVEYANCING
SPRING 2011
Final Examination
Professors Malaguti & Morris
Your Student ID Number:______
You are not to have a cell phone, or any other device that can transmit and/or retain information, on your person during this exam. Possession of a cell phone or such other device shall be treated, and dealt with, as cheating.
Instructions
This exam consists of five (5) parts:
Part One consists of a short fact pattern followed by 24 questions. The suggested time is 45 minutes.
Part Two consists of 6 clauses taken from a hypothetical purchase and sale agreement, and 12 questions concerning drafting choices to make in regard to the clauses. The suggested time is 30 minutes.
Part Three consists of a set of Closing Instructions and a HUD-1 Settlement Statement. You are to use the closing instructions to complete the Settlement Statement. The suggested time is 30 minutes.
Part Four consists of a fact pattern, followed by a brief question and a brief essay question. The suggested time is 30 minutes.
Part Five consists of a short essay question. The suggested time is 45 minutes.
You have three (3) hours to complete the examination. These are not “brain dump” questions. You will have sufficient time if you identify and address the relevant issues while staying away from irrelevant issues.
You are to place all of you answers in this exam booklet, not in a blue book.
The bluebook you receive will be only for use as a scrap book.
This is a closed-book examination; other than writing implements, you are not to have any materials on your table or at your feet. Please place all books, knapsacks, briefcases, etc. at the side or front of the room.
GOOD LUCK!
PART ONE
Part One consists of a common fact pattern followed by a number of questions. You are to answer each of the questions in the space provided below the question.
Common Fact Pattern
On August 13, 2010, a seller and buyer executed a Purchase& Sale Agreement(the agreement) for the purchase of a single-family residence located in a Massachusetts suburb (the residence) for a price of $294,000. The residence had an attached garage, a shed in the back yard, an asphalt driveway, a well-maintained lawn and landscaping, and the other accoutrements customarily accompanying single-family dwellings in Massachusetts. The agreement, which required that the seller deliver a “quitclaim deed,” was otherwise silent as to the quality of title that the seller was required to convey. No provision of the agreement expressly addressed the issue of zoning. The agreement also was silent in regard to the condition of the premises at the time the seller was required to deliver the deed. At the time, the buyer’s only asset was $300,000 held in a savings account. The buyer intended to use that money to purchase the residence; there was no so-called mortgage contingency clause in the agreement.
Questions
Q.1. Assume for the purposes of this question that the agreement complied with the Statute of Frauds and was binding on the parties. Considering such facts, as well as the common facts, please check only one (1) of the following statements which is the most accurate. In order to receive credit, you must be sure to make it absolutely clear which answer you are checking.
□ The seller has no obligation to deliver a marketable title and has no obligation to deliver a good record title.
□ The seller is obligated to deliver both a marketable title and a good record title.
□ The seller is obligated to deliver a marketable title, but is not obligated to deliver a good record title.
□ The seller is not obligated to deliver a marketable title, but is obligated to deliver a good record title.
Q. 2. In the space provided below, please explain the reasoning (apply the applicable law to the facts) you employed in checking the particular answer above.
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Q.3. Assume again for the purposes of this question that the agreement complied with the Statute of Frauds and was binding on the parties. But for this question, the agreement was not silent as to the quality of title that the seller was required to convey; it said specifically that “said deed shall convey a good and clear record and marketable title thereto, free from any encumbrances.” Considering such facts, as well as the common facts, please check only one (1) of the following statements which is the most accurate. In order to receive credit, you must be sure to make it absolutely clear which answer you are checking.
□ The seller has no obligation to deliver a marketable title and has no obligation to deliver a good record title.
□ The seller is obligated to deliver both a marketable title and a good record title.
□ The seller is obligated to deliver a marketable title, but is not obligated to deliver a good record title.
□ The seller is not obligated to deliver a marketable title, but is obligated to deliver a good record title.
Q. 4. In the space provided below, please explain the reasoning (apply the applicable law to the facts) you employed in checking the particular answer above.
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Q.5. Assume again for the purposes of this question that the agreement complied with the Statute of Frauds and was binding on the parties. Also assume that the clause pertaining to title quoted in Question 3 pertains to this question. Finally, assume that the shed mentioned in the common fact pattern straddled a boundary line shared by the seller and a neighbor. The buyer’s bank caused a “mortgage survey” to be completed prior to the delivery of the deed, which revealed the fact that the seller’s shed encroached upon the neighbor’s property. Prior to the closing, the buyer and her bank objected to the title that the seller proposed to deliver. Considering such facts, as well as the common facts, please check only one (1) of the following statements which is the most accurate. In order to receive credit, you must be sure to make it absolutely clear which answer you are checking.
□ The seller’s proffered title does not violate his requirement to deliver a marketable title and does not violate his requirement to deliver a good record title.
□ The seller’s proffered title violates his requirement to deliver a marketable title and violates his requirement to deliver a good record title.
□ The seller’s proffered title does not violate his requirement to deliver a marketable title but does violate his requirement to deliver a good record title.
□ The seller’s proffered title violates his requirement to deliver a marketable title but does not violate his requirement to deliver a good record title.
Q. 6. In the space provided below, please explain the reasoning (apply the applicable law to the facts) you employed in checking the particular answer above.
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Q.7. Assume again for the purposes of this question that the agreement complied with the Statute of Frauds and was binding on the parties. Also assume that the clause pertaining to title quoted in Question 3 pertains to this question. Finally, assume this time that the shed mentioned in the common fact pattern did not straddle a boundary line shared by the seller and a neighbor; instead, it was three (3) feet away from the boundary line and totally within the seller’s owned premises. The municipality in which the seller lived, however, had a zoning ordinance pertaining to the district in which the residence was situated requiring that “all pools, garages, sheds, and other accessory structures to be at least ten feet (10’) from the nearest boundary.” The buyer’s bank caused a “mortgage survey” to be completed prior to the delivery of the deed, which revealed the fact that the seller’s shed, while within the seller’s boundaries, violated the applicable zoning laws by being within ten feet of a boundary line. Prior to closing, the buyer and her bank objected to the title that the seller proposed to deliver. Considering such facts, as well as the common facts, please check only one (1) of the following statements which is the most accurate as to real estate located in Massachusetts. In order to receive credit, you must be sure to make it absolutely clear which answer you are checking.
□ The seller’s proffered title does not violate his requirement to deliver a marketable title and does not violate his requirement to deliver a good record title.
□ The seller’s proffered title violates his requirement to deliver a marketable title and violates his requirement to deliver a good record title.
□ The seller’s proffered title does not violate his requirement to deliver a marketable title but does violate his requirement to deliver a good record title.
□ The seller’s proffered title violates his requirement to deliver a marketable title but does not violate his requirement to deliver a good record title.
Q. 8. In the space provided below, please explain the reasoning (apply the applicable law to the facts) you employed in checking the particular answer above.
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Q.9. Assume all the same facts as stated in Question 7, except that the real estate was located in a “multistate” jurisdiction rather than in Massachusetts. Considering such facts, as well as the common facts, please check only one (1) of the following statements which is the most accurate as to real estate located in Massachusetts. In order to receive credit, you must be sure to make it absolutely clear which answer you are checking.
□ The seller’s proffered title does not violate his requirement to deliver a marketable title and does not violate his requirement to deliver a good record title.
□ The seller’s proffered title violates his requirement to deliver a marketable title and violates his requirement to deliver a good record title.
□ The seller’s proffered title does not violate his requirement to deliver a marketable title but does violate his requirement to deliver a good record title.
□ The seller’s proffered title violates his requirement to deliver a marketable title but does not violate his requirement to deliver a good record title.
Q. 10. In the space provided below, please explain the reasoning (apply the applicable law to the facts) you employed in checking the particular answer above.
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Q. 11. Assume the same facts you considered in answering Questions 9 and 10, except that the buyer did not raise the zoning issue until after the closing occurred and the deed was delivered. Would this change your answer to Question 9?
□ YES □ NO
Q. 12. In the space provided below, please explain the reasoning (apply the applicable law to the facts) you employed in checking the particular answer above.
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Q. 13. Assume for the purposes of this question that the agreement complied with the Statute of Frauds and was binding on the parties. Assume again that the residence was located in Massachusetts. The agreement contained the following Paragraph:
13. The acceptance of a deed by the BUYER or his nominee as the
case may be, shall be deemed to be a full performance and
discharge of every agreement and obligation herein contained
or expressed, except such as are, by the terms hereof, to be
performed after the delivery of said deed.
For this question, assume that a creditor of the seller obtained and recorded a real estate attachment on the residence one week prior to the closing. Although it was recorded properly, the buyer’s attorney did not pick up the attachment prior to the closing. The parties attended the closing, the deed was recorded, and the buyer took possession of the residence. A month after the closing the buyer discovered that the creditor had placed a real estate attachment on the residence and has brought an action against the seller for breach of the seller’s obligation to deliver a marketable title. In that law suit,
□ The buyer will prevail □ The seller will prevail
Q. 14. In the space provided below, please explain the reasoning (apply the applicable law to the facts) you employed in checking the particular answer above.
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Q. 15. Assume again for the purposes of this question that the agreement complied with the Statute of Frauds and was binding on the parties. Three weeks prior to the closing the buyer died, and her husband was appointed as the executor of the estate. The buyer’s husband, on behalf of the estate, announced that the buyer’s death terminated the agreement and that the estate would not complete the transaction. Is the buyer’s husband correct that the buyer’s estate can rightfully fail to complete the transaction?
□ YES □ NO
Q. 16. In the space provided below, please explain the reasoning (apply the applicable law to the facts) you employed in checking the particular answer above.
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Q. 17. Assume the same facts as in Question 15, except that the buyer’s husband did not attempt to back out of the transaction. At her death, the buyer had a valid will that left all her personal property to her daughter, an adult and an only child, and all her real estate to hr husband. The daughter wants all of the $300,000 to be delivered to her, but the husband wants most of the $300,000 to be used to complete the transaction for the purchase of the residence. Upon full administration of the buyer’s estate, will the daughter obtain all of the $300,000 the buyer had in a savings account at her death?
□ YES □ NO
Go on to the next page.
Q. 18. In the space provided below, please explain the reasoning (apply the applicable law to the facts) you employed in checking the particular answer above.
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Q. 19. Assume the same facts as in Question 15, except that the buyer did not die three weeks prior to the closing. Instead, a pipe burst as a result of excessively cold weather. Upon bursting, the formed ice inside the pipe freed, allowing cold water to gush from the pipe. Because the seller was not at home at the time, water gushed from the pipe for more than three hours and caused extensive structural damage in the kitchen and dining room areas of the house. An insurance adjuster informed the seller that it would pay the seller $18,000 to cover the cost of repairs. The buyer has demanded that the seller either pay over the $18,000 to allow her to make the repairs or permit her to rescind the transaction. The seller has refused both options; he intends to collect and pocket the $18,000, and force the buyer to accept delivery of the deed to the residence with no reduction in purchase price for the damage. The residence is located in a jurisdiction that follows multistate law on the matter. Considering these facts, as well as those contained in the common facts, in an action in which the seller and buyer have asserted their respective positions as stated in this Question,