REE 4433 Exam 2 (Bailey) with case studies version 2

Some states prevent a real estate broker from drafting a purchase contract because it

constitutes the practice of law.

A broker usually works as an independent contractor in that he or she

controls the manner in which the job is done.

John assigned his right to receive a deed from Trudy to Hannah.

Hannah will be entitled to the deed.

Where an offer to contract is made by mail, acceptance takes place at the time

the offeree deposits the acceptance in the mail

Susan desires to net $200k. She has $600k mortgage what will be paid off at the closing, and $10k in closing cost. If the property sells for $850k, how much will the commison earned by the broker be?

$40K = 850-600-10-200

Several years after buying the property from Oliver, Bart sold it to Lance. Bart did not convey by a general warranty deed. Lance's title was contested, and he was evicted from the property. Unable to sue Bart, Lance commenced an action against Oliver. Oliver defended on the grounds that he had not sold the property to Lance

A court would find for Lance on the grounds that the covenants of quiet environment and warranty run with the land and extent to future owners

ABC Plumbing had a contract to furnish plumbing fixtures to a developer. The contract required delivery of fixtures to the individual units. To protect its delivery truck and to store fixtures, the company built a small storage shed at the site. When the company was not paid, it filed a notice of lien that included $1,500, the cost of the structure

A court would rule that his amount was not include din the lien against the premises b/c the benefit was not permanent

Rev Development was constructing a large office building. It hired Francis Trucking Company to deliver materials to the site and Payne to serve as watchman. When Francis and Payne were not paid, they filed mechanics' liens. Rev argued that they were not entitled to liens, as their labor did not improve the premises. Could these services be the basis for a mechanic's lien?

A few states/judges might find it is reasonable to hold that the services improved the premises, as they were necessary for ultimate completion of the job and the services could thus be the basis for a mechanic's lien

An offer is terminated when

the offeree makes a counteroffer.

Allen offers to sell Solid Rock to Ben for $170K. Ben responds by saying "I accept, provided the title is good" Allen then changes his mind and tells Ben that he does not accept his counter offer. Ben files suit to enforce contract

Acceptance is Valid

Sam promises to buy Amy a steak if she agrees to meet him for dinner after work. Amy agrees. Sam shows up, but Amy does not.

Amy does not need to show up, this is a social arrangements which normally do not create the expectation/reliance that commercial agreements do

Lance and Helen (husband and wife), were killed in a common disaster. Because of the nature of the accident, determining which one had died first was impossible. Lance's will left all his property to his wife if she survived him. If she did not, his estate was to go to his parents and to charity. Lance's will contained the following provision: "In the event my wife and I shall die under such circumstances that there is insufficient evidence to determine the survivor, it shall be conclusively presumed that I survived her."

As a result of this provision, the estate went to Lance's parents and the charities that he had named, rather than into his wife's estate.

Barb wanted to purchase 3 lots in San Rafael and build homes on those lots. She contacted Vera, a RE broker. Vera agreed to represent Barb regarding the purchase, in return Barb agreed to build a speculative home on each lot and when placed on the market give the listing to Vera. After the transaction Barb refused to build the homes. Vera sued Barb, how will the court rule?

Barb had to pay Vera commission on expected income for what the houses would sell for plus damages.

Oliver's contract with Bart called for a general warranty deed. At the closing, Oliver offered another type of deed customarily used in the area.

Bart is entitled to a general warranty deed

Wilson purchased a lot from Bonnie. The lot and several others in the area were subject to certain building restrictions. At the time Wilson contracted, he knew of these restrictions, but they were not mentioned in the contract. Wilson refused to accept a deed from Bonnie on grounds that the restrictions violated the covenant against encumbrances

Because Wilson knew of the restrictions and they benefited the land, however, this argument is unsuccessful

Melony, a licensed real estate broker, specialized in investment properties. Tim, a wealthy rancher, wished to invest in a multifamily dwelling. Melony showed Tim several properties. After inspecting one large unit, Melony stated, "That's a fine building, and the return on your investment would be substantial." At the time, Melony had never inspected the records and was unaware of some major problems with the heating units. Tim purchased the building, lost money, and sued Melony for fraud.

Because of Melony's superior knowledge, a court would consider her statement a basis for fraud.

Barny promises to pay Yosef $25K for Needleacre and Yosef promises to sell Needleacre to Barny for $25K. All materials details of contract are reduced to writing.

Bilateral contract - a promise for a promise

Bob agreed to paint John's home for $5k. Pursuant to the contract, work was to begin on August 1. Thereafter, Bob informed John that he was going out of business and asked him to find someone else to do the work. On July 15, John learned that Bob went out of business, sold all equipment and dishonored all existing contracts. On July 15, this Bob breach the contract?

Bob breached contract and John may sue for damages

Mrs. Susan sold her house to Bob. At the time that Bob inspected the property, Susan informed him that the heating unit was new. Actually, the unit had been installed 10 years earlier. In a suit for fraud based on the deceit, Bob would be entitled to damages.

Bob would be entitled to damages. He could also rescind the contract and recover the expenses involved in replacing the old unit

Bob purchased a title insurance policy when he obtained his parcel of land from Carl. If the description of the parcel contained in the deed is unclear as to where the property line lies or the right of a neighbor to use a "common" driveway

Bob's title insurance policy would not be a remedy

Brenda enters into a contract to buy Hedgecare. A contingency clause within the contract reads " Contingent on buyer obtaining 4.5% loan for 80% of the sales price" Brenda had a change of mind and refused to obtain financing.

Brenda's refusal is considered a lack of good fail an would constitute a breach of contract

Builders, Inc. contracted with Allison to build her home for $200,000 in accord with specifications stated in the contract. After Builders started construction, the price of particular masonry block required in the contract and imported from a foreign country skyrocketed due to an unforeseeable shortage caused by civil war. As a result, it would cost Builders $200,000 just to obtain the block. Which of the following is Builder's best argument to excuse it from performance?

Commercial impracticality

Rita Roofing contracted with a homeowner, April, to put on a new roof for $3,500. Rita hired Roofing Subcontractors, Inc., (RSI) to actually do the job. RSI completed the work but was not paid by Rita, who collected part of the money from April. The mechanic's lien statute in the jurisdiction authorizes the subcontractor to place a lien on property even though there was no contract between the homeowner and the lienor, as long as the lienor complies with the notice of filing requirements of the statute. RSI placed a lien on April's property.

Consequently, RSI is entitled to its mechanic's lien even though it had not contracted with April

Franks owned property on the outskirt of town. Although sewer lines had been constructed in the area, Franks's property was not yet connected. A prospective buyer asked Franks if the property was connected to a sewer. Franks replied, "The sewer line is across the street." Later, the buyer discovered that sewage from the house was being piped to the back end of the property into a septic tank. The buyer sued Franks for the cost of having the property hooked to the sewer. Franks argued that his statement was true.

Court awarded damages to the buyer

Rob, a contractor, obtained a long-term lease on land outside of Utica, New York, for construction of a small warehouse. Wilson Building Supply furnished all materials for the project. When Rob did not pay his bills, amounting to $275,000, Wilson obtained a material supplier's lien (mechanic's lien) on the building. After Wilson obtained a lien, the state acquired Wilson's lumberyard as part of a slum clearance project. This left Wilson without a lumberyard, so it demanded possession of Rob's building on the basis of the lien.

Court would award Wilson possession of warehouse on the basis of the material supplier's lien, even if the lien exceeded the value of the property

Howard, owner of a tract of land that is for sale, is planning to visit Australia. To prevent his absence from the country from impeading the sale, he executes a POA, giving his RE broker power to negotiate, contract, and sign the deed. Frank enters into contract, and buys land. However Howard was killed in Australia before the closing date.

Death revokes POA, Frank's title is impaired

Mason is in arrears on her mortgage payments and requests additional time from the mortgagee to permit her to pay the arrearage. The mortgagee extents the time by 90 days. There is no consideration to support the promise to extend. 30 days after, Mason makes improvements to the property in reliance on the mortgagees promise. The mortgagee files an action in foreclosure prior to the expiration of the 90 days.

Each of the ingredients of the promissory estoppel is present, the mortgagee's promise not to foreclose for 90 days is enforceable

Realty, Inc., was authorized to sell property that belonged to Edna. Realty, Inc., mentioned this to Arthur, a fellow broker. Several days later, Arthur obtained Realty, Inc.'s, permission to show the property to one of Arthur's customers. Arthur described the property and the terms to this buyer. The buyer on his own examined the property and entered into an agreement with Edna, who refused to pay Realty, Inc., a promised commission. Edna argued that she had not authorized Arthur to procure a buyer.

Edna would be required to pay a commission to Realty Inc.

Foster is the agent for the seller of a large home that has been in one family for 50 years. Foster noticed that the roof of the sun porch leaked during an unusually heavy storm. The owners reacted with surprise, noting that it had never happened before. What is TRUE about Foster's liability in this situation?

Foster is responsible for having the leak repaired.

In 1984, George conveys to Hank, who does not record the deed. In 1985, George conveys the same parcel to Isaac, who records the deed. In 1986, Hank finally records his deed. Later that year, Isaac enters an agreement to sell the parcel to Jeremy. When Jeremy has a title search done, the deed from George to Hank is not in the chain of title. The title searcher does not examine the records for possible conveyances by George after 1985, when Isaac became the new owner. Because Jeremy is not charged with constructive notice of the deed to Herman (in those states that only require the title to be searched back to the most recent conveyance), he takes the parcel free and clear of the prior deed to Herman

Herman has the right to sue George for damages but not for title to the land

Mark owned a profitable bakery that he desired to sell. He listed the business and property with Realty, Inc., for $150,000. Realty, Inc., obtained an offer for the property, which Mark accepted—a $1,500 deposit to be held by Realty, Inc., accompanied the offer. The contract provided that the deposit on the purchase price be paid to the seller if the buyer defaulted. The buyer refused to close the sale because of alleged defects in the title. Without contacting Mark, Realty, Inc., returned the $1,500 to the defaulting buyer. Because the contract did not close as scheduled, Mark sold the property to another without using Realty, Inc.

If Realty Inc sued for commission the court would rule against because they had no implied authority to modify the contract by returning the deposit to the buyer

Which of the following activities demonstrates a broker's responsibility for being the procuring cause of a sale?

Introducing the buyer and seller

Bob purchased a parcel of land from Peter in 1951. In 1962, Bob conveyed a 20-foot drainage easement to the city. The city official presented the written easement for recording, but the recorder failed to enter Bob's name in the grantor index. In 1996, Bob conveyed the parcel to Jack. Bob's conveyance to the city does not appear in the chain of title for the parcel

Jack has no legal recourse against Bob or the city but would be able to recover against the recorder on that official's security bond

Case Study #3 - Kaye was interested in buying a large piece of land from Katz, who lived nearby. Katz did not want to sell the land to a buyer who waned to use it for commercial purposes; he asked Kaye what he planned to do with the property. Kaye told Katz that he was going to build a house and garden. This was true, but before closing, Kaye changed his mind and made plans to build a hamburger stand. Katz learned of this and refused to sell. Kaye sued for breach of contract. - defense claimed fraud.

Kaye will not be successful b/c of intent of use for land

Leon purchased land in a development called Vanderbilt Hills. He had a house constructed on this property. After a few months, the house began to sink. On investigation, Leon discovered that the developer had filled a large gully with logs, stumps, and other types of debris and covered this with clay. The land apparently was level, and enough clay had been dumped into the gully so excavation for the foundation did not disclose the fill.

Lawson was successful in a suit against the developer for fraud. the seller had a duty to disclose what he had done b/c it would not be found during an inspection

Mark is negotiating an agreement to purchase Nick's summer home. When Mark inspects the premises, he finds several neighbors have been using a well on the property. If the neighbors have acquired and recorded an easement, that fact will appear on the record. If no easement is on the record, the users may have a prescriptive easement—that is, one imposed by law based on the extended use by the neighbors

Mark has actual notice of their easement

Bob purchased property from Sam on a land installment contract. In this installment contract, the owner/seller, Sam, retains title until the purchase price is paid. The installment contract was recorded. Bob commenced to build on the property, serving as his own contractor. Bob contracted with American Wallboard to put in the walls. American purchased the necessary wallboard from Tri-City Building. Although Bob paid American, American did not pay Tri-City. When the wallboard was delivered, Tri-City notified Sam of delivery, although Sam had not ordered the material.

Most courts would hold that this notice was sufficient to establish mechanic's lien rights against Sam, in as much as Sam had ownership rights.

Case Study #4 - River Birch Associates, a developer, entered into a plan to develop a 144-unit townhome project on 19.6 acres. Birch agreed to convey fee simple title to the "common area" to the project's homeowners association. The specific identity of the common area was not designated in the contract. Can the homeowners association resort to extrinsic evidence to clarify the quantity and the specific identity of the common areas?

No development w/o homeowners association cooperation

Case Study #1 - Able hired a contractor to repair several cracks in the walls. The cracks were the result of settling, but the contractor never mentioned this to Able. Somehow Able got the impression the cracks were caused by green lumber. When Able later tells Baker, a potential purchaser, about the cracks, he explains it is from green lumber. Baker purchases the property, and later finds out it is from settling. Can he sue Able?

No, he should have done his own inspection.

Pamela contracts with Bronwyn to build a house. Pamela specifies in the contract that the house is to have a fireplace. Bronwyn completes the house without a fireplace. Pamela refuses to pay Bronwyn. In court,

Pamela will lose because Bronwyn substantially performed and Pamela will have to pay Bronwyn the contract price less the cost of the fireplace.

December 13, 1950, received by Pat, $10 as binder on 20 acres of land and timber; price to be $200 for land and timber. Deed to be made later.

Parol evidence will not be admitted in this case b/c the description does not allude to a definite parcel of property

Susan contracted to sell "all my lands lying on Miami River in the State of Ohio...in my name" Should the actual quantity be somewhat greater than the acreage mentioned, would the sale include the excess of the quantity stated in the contract?

Parol evident is admissible to clarify specific lands. However, parol evidence will not be admited to reform a description to include lands not specifically referred to by the description.

Which of the following actions is NOT required for brokers to meet the good faith and loyalty duties to the seller?

Perform all tasks related to the transaction and property alone.

Pete owns a home in Tulsa, and is interested i selling the home and moving to Seattle. Pete enters into a valid purchase contract with Sam, where Pete is to buy Sams's residence for a stated sum. After signing the contract Pete is not able to sell his residence in Tulsa and is unable to come up with the funds necessary to close on the Seattle property. Does Pete have to buy the home.?

Pete is obligated to buy - unless there was a contingency clause stating Pete needed to sell his previous home

Which of the following is not needed to satisfy the Statute of Frauds?

Proof of marketable title

Warren desires to purchase Goldacre and settles on a $200k price. He secures a conventional loan. He intends to make a $30k down payment and finance the rest. The bank informs Warren closing costs will be $10k. Warren does not have money to pay closing costs. The seller and Warren agree that the selling price will be raised to $210k, and seller will pay $10k toward closing cost. The rality is that the cost of the loan to Warren will increase to $180k. However, he will be able to afford to purchase the house as a result of seller assist

Provision - Closing, Seller Assist

Randy contracted with the ABC Pool Company for construction of a $28,000 pool. The pool was to serve residents of an apartment complex being constructed by Randy. ABC subcontracted excavation and grading to Marty for $1,500. On completion of the pool, Rudy paid ABC as per the contract. ABC failed to pay Marty. When ABC went bankrupt, Marty filed a mechanic's lien against the premises

Randy would have to pay the $1,500 to Marty to extinguish the lien

Grace was interested in purchasing a music store from Helen. Grace's marketing strategy required a large volume of potential customers. Helen informed Grace that, on average, 250 people came in daily. Helen knew that this was false. On several occasions, Grace visited the store, remaining for appreciable periods of time. After Grace purchased the store, it became apparent that Helen's statement was false. As a result, Helen sued to rescind.

Rescission would be denied if the jury determined that Helen should have relied on her own inspection

Ron hired Paul, an attorney, to represent him when he purchased Whiteacre from Jack. Paul performed the title search and provided Ron with an attorney's opinion assuring him that title was transferred to Jack. Mary, Jack's sister, returned to town and asserted an ownership interest in Whiteacre. The facts showed that their father left Whiteacre "to his children" and that Jack and Mary were his two children. Paul had negligently failed to determine that Jack, Ron's grantor, was not the only child

Ron may have to buy Mary's interest to get clear title. But can sue Paul for damages.

Carl listed property with Ron, a real estate broker. The listing described the property as 120 acres more or less and specified a price of $3,500 an acre. Ron brought Carl an offer, which was for $3,500 per acre. Carl rejected the offer because of two provisions in the proposal. The first read "exact acreage to be determined by current survey which is to be provided by the purchaser at time of closing." The other stipulated that "[t]he rights of purchaser hereunder may be assigned without consent of the seller." Ron sued for a commission.

Ron was not entitled to commission because the two terms varied from the listing l

Which of the following contingencies benefits the seller?

Seller's purchase of a home.

Which of the following elements should be included in a real estate purchase contract?

Signature of the seller's spouse

Which of the following statements best describes a broker's implied authority?

The broker is bound as an agent to obey the directions of the principal.

Havery entered into contract with Jones whereby Haverty agreed to build and install plumbing, heating and ventalation in Jones's building for $27k. The total cost of the building was $186k, after completion, Jones refused to pay a balance of $10k to Haverty. Jones argued that Haverty's performace was not in accord with the contract. Haverty sued Jones for the balance.

The court awarded Haverty $7k ($10k-his mistakes)

Wanda owned a 120-acre farm near Verna, Oklahoma. When she was nearly 80, she became ill and moved to a nursing home. While a resident at the home, she conveyed the farm to a nephew. After Wanda's death, a niece contested the validity of the deed on grounds that the grantor (Wanda) was incompetent. Conflicting testimony was given at the trial concerning Wanda's competency.

The court held the deed valid, stating that fragmentary evidence of isolated instances of failing memory or confusion is insufficient to overcome evidence that the grantor was competent

Luke owned a ranch and wanted to sell it. Ed, a RE broker looked for buyers. Bobbi was interested in purchasing. After negotiations, Luke made on offer that was communicated by Ed to Bobbi. Bobbi signed the agreement but attached 3 material amendments. Luke refused to accept the agreement. After learning Luke's refusal, Bobbi told look the amendments were removed and the original offer was accepted. Luke refused to sell the property, and Bobbi sued. What did the court say?

The court ruled the amendments constituted as a rejection, which terminated to offer. Consequently, only removing the amendments did not result in an acceptance and contract.

Martin was the owner of a lot, but Bob was in possession for five years from 1970 to 1975. Then Bob allegedly sold the lot to Lucas, who possessed it for eight years and transferred it to Tim in 1983. Tim, however, did not enter the land (from 1983-1986). When Tim died in 1986, his heirs took possession. They sued to quiet title in 1999.

The heirs would lose this suit in a jurisdiction.

Jim and Jerry enter in to a RE contract for the sale of Jim's property. Afterward, they enter into a contract cancelling the prior RE contract.

The introduction into evidence of the new contract does not violate the parol evidence rule b/c it was entered into after the purchase contract.

John and Susan inherited land from their father. At the time, John was a minor. John attained majority five months later. John's sister was of full age at her father's death. Before John attained majority, he and his sister sold the property to Alan. Alan then conveyed part of the property to the Latsa Power Company and the rest to William. Three years later the power company commenced substantial improvements on the land. John attempted to disaffirm the deed

The right had been lost because he failed to assert it within a reasonable time

Case Study #1 - Kile borrowed $15k from Chat, giving her a promissory not to cover the debt. The not was unsecured, but Chat know that Kile owned substantial unmorgaged real property. A short time later, Hude won a judgment against Kile for $150k. When Kile filed as bankrupt both Chat and Hude claimed priority in the real estate.

The superior claim belongs to Chat b/c of time of debt due

Bob made a written offer to Sam to purchase is RE for $42,500 plus $250 for a dinner bell and flower pots. Offer was mailed on 3/3, Sam signed the agreement. Before Bob was notified of the acceptance, he withdrew the offer by notifying Sam's RE agent. Was Bob's withdrawal an effective revocation? Did Sam's acceptance prevent Bob from withdrawing? Was Bob's notice to the agent valid against Sam?

The withdrawal was effective, b/c it was made before his knowledge of the acceptance.

On July 1, Thomas sent an offer by mail to sell Panacre to Mariah for $170,000. Mariah received the offer and deposited the letter of acceptance in the mail on July 3. Later that day, Thomas called Mariah and said, "I revoke my offer."

There was a contract formed on July 3.

Which of the following does not accurately describe real estate brokers?

They often sue to collect commissions

Tom died intestate. His wife had predeceased him by many years. Tom and his wife had three children: Stephanie, Joe, and Don. Stephanie and Joe survived their father, but Don died before him. Don, however, left three children of his own: Jane, Mark, and Ron. Tom's estate was divided into thirds, with one-third going to Stephanie, one-third to Joe, and one-third to the children of Don, equally.

This allocation is per stirpes distribution

Gary Grover and his wife owned a house on a bluff overlooking Lake Michigan. For a number of years, the Grovers and their neighbors had been concerned with erosion along the shore and the safety of their homes. In fact, a group of people from the area, including the Grovers, had met with the Army Corps of Engineers to work out a solution to the erosion problem. A prospective buyer of the Grover property expressed concern as to the safety of the house. Mrs. Grover responded, "The house is perfectly safe. We are living here, aren't we?" In an action to rescind the contract of sale, the Grovers defended on the grounds that the statement was merely an expression of her opinion.

This defense would not be successful

Eric purchased a lot. He then contracted with Jamco Builders for the construction of a home on the lot. Jamco subcontracted some of the work to Mid-American Homes. Mid-American, as required by law, notified Eric of its right to place a lien against the real estate. Jamco did not pay for the subcontracted work, and Mid-American filed a mechanic's lien against the property.

This established its right to petition on a court to have the property sold and the proceeds applied against the debt

Grey Construction Company contracted to build a stable for Perry. Work began on November 10. On December 5, before the job was completed, Perry executed a mortgage on the property in favor of Beth. The stable was finished on December 12, but a portion of the contract price was not paid. Grey filed a lien against the property on January 3

This lien would have priority over Beth's mortgage b/c the lien reverts back to Nov. 10, the day work began

Rex Todor is purchasing a house in Memphis, Tennessee. The sales associate states, "Elvis Presley's uncle once lived here." If untrue, would it be material? Rex Todor is purchasing an inn in Memphis, Tennessee. The sales associate states, "Elvis Presley slept here." If untrue, would it be material?

Uncle - would not be material Elvis - material, b/c it would increase property value

Burnside promises to convey Needleacre to Lasser if Lasser refrains from vaping for 10 years. Lasser refrains

Unilateral - a promise for a forebearance

Barny promises to convey to Needleacre to Josef if Josef cares for Barny's mother for life.

Unilateral contract - a promise for an act

Oliver conveyed property to Bart with a general warranty deed. Bart then conveyed the same property to Lance with a limited warranty deed. Lance discovered that Bart's title was defective because of an undischarged mortgage given by Oliver. Lance sues Bart for breach of warranty - covenants against encumbrances

Warranty had not been breached

Gina contracted to exchange her home for one being built by Hank. The agreement was conditioned on rezoning her property from residential to commercial use. After the property was rezoned, Hank asked her to sign a blank deed. Gina questioned this and asked Alan her attorney about the title to Hank's property. Alan never examined the title, but still told her to sign the deed and that he (Alan) would see that she got an abstract showing clear title. Gina moved into Hank's property only to find out there was a huge lien on the property and she was ejected. Gina sued Alan Did Alan commit a fraudulent misrepresentation - how would a court rule?

Yes because he spoke without knowlege

Mr. Jones agreed to purchase Wax City, an auto detailing service, from Mr. Anderson with a contract that was signed on April 20, with closing set for September 10. During the summer, sales in Wax City to plummeted, the market value of Wax City dropped and Jones defaulted on the sales contract. Will damages be due to Anderson?

Yes, Anderson is entitled to Jones's earnest money and the difference between the purchase price and the market price.

Jan 3. Alan offers by mail to sell Landacre to Bob for $15K/acre. Jan 4. Bob mails acceptance Jan 5. Alan mail letter revoking offer Jan 6. Bob receives letter of revocation Jan J. Alan receives letter of acceptance - Does contract exist?

Yes, Bob mailed acceptance before Alan mailed revocation letter

Nick listed property with Ron, a broker. Ron obtained a purchase offer for the property. The offer acknowledged receipt of $3,000 from the buyer and provided that the deposit be "forfeited as liquidated damages" if the buyer failed to close. The deposit was in the form of a promissory note, not cash. Ron failed to inform Nick about this, because the buyer assured Ron that the note would be honored. When the sale did not close, Nick demanded the deposit to cover losses incurred. The buyer refused to pay the note. Did Ron violate his obligation of full disclosure?

Yes, it is his job to disclose all information known

Case Study #4 - Lewis, a RE sales associate, listed residential property owned by Flavin. Flavin informed Lewis that the property was in the SW School District. Actually the property was in the Columbus School District. Flavin, however, did not know this. Katz and her husband were looking for a home, but did not want to be in the Columbus District. The Katz family was interested in the home and agreed to buy it after they knew it was in the SW District. Can Lewis be sued for damages.

Yes, the agent did not know the true facts, and relied on others for information

The Statute of Frauds requires that

certain contracts be evidenced by a writing.

If the parties to a contract agree within the contract that time is of the essence,

a day's delay on the part of a party would be deemed a breach of contract.

The word "able" in the expression "ready, willing, and able" refers to the

financial ability of the buyer to complete a transaction.

Multiple listing services are

based upon agreements among brokers.

Harry offers in writing to sell Lynn Blackacre. Lynn accepts, thinking that the offer refers to Greenacre. In fact, Harry made the offer thinking that it referred to Greenacre. Either party may rescind the contract because

both parties had a mistaken belief about a material matter in the contract.

The parol evidence rule

does not exclude the introduction of evidence of a subsequent agreement that alters the previous writing.

Mills was old. He contacted the Handbergs and orally agreed to will his farm to them if they moved in with him and took care of him and the farm. They did. The Handbergs are

entitled to the property because of the part performance doctrine.

The exclusive right to sell differs from the exclusive agency in that the exclusive right to sell

entitles the broker to a commission even if the seller procures the buyer.

The date the buyer is entitled to possession of the real property is

governed by the contract.

A person who is adjudicated insane

has no capacity to enter into a contract.

Under the seller assist program

in a conventional loan the seller is limited to paying 3% of the buyer's closing costs

Martin contracted to sell property to Hunter. At the time, Martin was single, but he married before he signed and delivered the deed. Only Martin signed the deed. In their state, Martin's wife has a right of dower. On discovering the marriage, the attorneys for both parties asked Mrs. Martin to execute a quitclaim deed releasing all her rights to Hunter

in executing and delivering this instrument, Martin would surrender any interest he might have in the property, including dower rights

It is illegal for brokers to

informally agree to charge the same commission.

In the term "ready, willing, and able", "ready" means that the buyer

intended to buy at the time the contract was made.

A real estate sales associate

is an employee, as he or she is required by law to be associated with a broker.

The agency relationship between the seller and the broker is created with the

listing.

The writing that contains essential terms in satisfaction of the statute of frauds is referred to as the

memorandum.

A buyer's broker

owes fiduciary duties to the buyer.

When a general warranty deed is used in a real estate transaction, the seller warrants that the property is free and clear of encumbrances through

personal warranty.

A designated agency

requires the utmost sensitivity and confidentiality within the brokerage firm in order to maintain independent agent representation

Some courts take the position that part performance is satisfied if the purchaser

takes possession of the property pursuant to an oral contract.

In most states, a broker is not entitled to a commission until

the broker submits a binding offer from a financially able buyer.

Carla executed a quitclaim deed to herself and to her granddaughter, Fay, as joint tenants. Although the deed was recorded, Carla continued to occupy the property and paid all maintenance and insurance expenses. Both Carla and other members of the family stated and acted as though Carla was the sole owner. Fay was regarded and spoken of as "the inheritor." Fay never occupied the property or stayed there longer than a single night

the deed in question did not operate to pass an interest in the property.

Consideration is a necessary element of a contract except when

the doctrine of promissory estoppel is applicable.