Exam 15: Real Property: Sales and Mortgages

Zoe and Lucius are parties to a contract that allows Zoe to take the benefit of a "prepayment privilege" (as that term was used in the text).Which of the following statements is most likely to be TRUE?

Simeon owns a piece of land called Blackacre.He has accepted Lola's offer to buy that property.The parties have created an agreement of purchase and sale.Which of the following statements is TRUE?

Belinda owned a piece of land called Blackacre.On Monday, she used it to create a mortgage in favour of Johnny.On Tuesday, she used it to create a subsequent mortgage in favour of Humphrey.Humphrey registered his mortgage on Thursday.Johnny registered his mortgage on Friday.Explain a situation in which Johnny's mortgage has priority over Humphrey's.Explain a situation in which Humphrey's mortgage has priority over Johnny's.

A piece of land called Blackacre is subject to a mortgage in favour of Maia.The mortgage is in default.It may be possible for Maia to enforce her security by selling Blackacre without complying with the procedures for a judicial sale.

Barton owns a piece of land called Finacre.On August 24, when the property was worth $1 000 000, he borrowed $200 000 from Alpha Bank and granted a mortgage over Finacre as security for repayment.Alpha registered its interest on September 18.On September 16, Barton borrowed $800 000 from Omega Bank.He granted another mortgage over Finacre as security.Omega registered its interest on September 17.The economy then collapsed.Barton has not repaid a cent on either loan and he has defaulted on both.The value of Finacre dropped to $500 000.If Finacre is subject to sale, which of the following statements is most likely to be TRUE?

Herschel borrowed $500 000 from Minah.As security for the repayment of that loan, a mortgage was created over a piece of land called Blackacre.Which of the following statements is TRUE?

A mortgage exists between Jonah and Marina with respect to a piece of property called Blackacre.The mortgage agreement contains a prepayment privilege.In normal circumstances, Jonah would want the inclusion of that clause if he is the mortgagor, but not if he is the mortgagee.

The remedy of specific performance is available only if monetary damages would be inadequate.Consequently, while that remedy is frequently available to purchasers, it is never available to vendors, who are contractually entitled to payments of money.

As used in the context of a mortgage, the legal concept of a "charge"

A purchaser's lien

Solomon recently purchased a piece of land for $200 000.A short time later, however, the land was seized by the government and sold.That is true even though Solomon never breached any obligation and always paid his debts on time.Which of the following statements may best explain this set of events?

Hiram owns a piece of land that he wants to sell to Regina.She wants to buy it for the purpose of building a shopping mall.It is not yet clear, however, whether the municipal government will give planning approval for the proposed mall.Hiram and Regina consequently will probably immediately create a contract that is subject to a condition subsequent.

Suki was recently involved in a successful application of the insurance principle under the land titles system.This most likely means that

Horatio owns a piece of land called Blackacre.He contractually agreed to sell it to Bharati for $200 000.Although the sale was not scheduled to close for four weeks, Horatio required Bharati to pay $10 000 immediately.Shortly before the sale was scheduled to close, Horatio told Bharati that he had changed his mind and that he was not willing to complete the sale.If he refuses to refund her $10 000, she would be entitled to use a vendor's lien.

Kiri bought a piece of land from Saul.Before doing so, she followed her lawyer's advice and traced a chain of title back 10 years.Which of the following statements is most likely to be TRUE?

The priority of mortgages is always determined by the order of registration rather than by the order of creation.

Aidan and Nadia are parties to a contract that allows Nadia to enforce an "acceleration clause" (as that term was used in the text).Which of the following statements is most likely to be TRUE?

Horace borrowed $100 000 from Blossom.As security for repayment of that loan, he created a mortgage over a piece of land called Blackacre.Horace has repaid part of the loan, but still owes $40 000 to Blossom.He is unable to repay the outstanding amount or make the next mortgage payment.Which of the following statements is TRUE?

On March 1, Eleanor entered into a contract to buy a piece of land called Blackacre from Hershey.The purchase price was $200 000.Eleanor paid $20 000 immediately and promised to pay the remainder when the sale closed on June 1.On June 1, however, Hershey refused to complete the sale.He also refused to refund Eleanor's $20 000.He honestly explained that while he has Blackacre, he simply does not have any money so he needs the deposit money to live on.What remedy should Eleanor use? Explain your answer.

Salome owned a piece of land called Blackacre.She committed the tort of nuisance against Prem by allowing noxious fumes to waft from Blackacre and onto his property.The court held her liable for $100 000 in compensatory damages.Recently, Salome sold Blackacre to Shandon for $250 000.Which of the following statements is most likely TRUE?