Exam 15: Real Property: Sales and Mortgages

A registry system and a land titles system are different because

Irene agreed to sell a piece of land called Blackacre to Noriel.That contract was subject to a condition precedent.The condition precedent was concerned with Noriel's ability to arrange suitable financing.Does a contract already exist? Is either party required to do anything immediately? If the condition is not met, can either party be held liable? Explain your answers.

Ngari borrowed $250 000 from Phoebe.As security for the repayment of that loan, he created a mortgage over a piece of land called Blackacre.Ngari has repaid part of the loan to Phoebe, but he still owes $150 000.He is unable to repay the outstanding amount.Which of the following statements is TRUE?

Kate believed that she owned a piece of land called Blackacre.She purportedly sold it to Ben.The land titles office issued a new certificate of title that named Ben as the exclusive owner of Blackacre.In fact, however, Kate was not really entitled to sell Blackacre.Although none of the parties realized it at the time of the sale to Ben, Blackacre actually belonged to Sam, and not to Kate.The official at the land titles office carelessly failed to realize that fact when the new certificate of title was issued.Which of the following statements is TRUE?

Which of the following statements provides the best definition or description for "the curtain principle"?

Salvatore is considering buying a piece of land called Blackacre that previously contained a chemical factory.He has hired an environmental auditor.As Salvatore explained, "It's a good move from a risk management perspective.By hiring that person, I may avoid liability in the first place and I may have access to a source of compensation if something goes wrong later on." Explain the meaning of Salvatore's statement.

Briefly explain the relationship between the mirror principle and the curtain principle in the context of a land titles system.

Hristo created a mortgage, in favour of Tippi, over a piece of land called Blackacre.Which of the following statements is TRUE?

Yun-Fat purchased a property from Brandon.The land titles office then issued a certificate of title to Yun-Fat.Unfortunately, a month later, the land titles office realized that it had made a mistake.The land had been owned by Marilyn rather than Brandon.Which of the following statements is most likely to be TRUE?

Hofflehaus Inc owns a large piece of land known as Schwarzermorgen.It wanted to use that land as security for loans totaling $6 million.When it explained the situation to Primus Bank, however, it was told that it qualified for a loan of only $4 million.The company accepted the offer of that loan and allowed Primus Bank to take a mortgage over Schwarzermorgen.Primus Bank did not, however, immediately register its mortgage.The next day, the company approached Deuce Bank, asked for a loan of $2 million, and offered security in the form of a mortgage over Schwarzermorgen.The company did not mention that it had already granted a mortgage to Primus Bank and Deuce Bank had no other way of knowing about that first mortgage.Deuce Bank then (1) checked the records at the land registration office and found that there were no interests registered against Schwarzermorgen, (2) loaned $2 million to the company, and (3) immediately filed its own mortgage.The next day, Primus Bank finally registered its mortgage.And later that same day, the company suffered a devastating financial loss.That loss wiped out virtually every asset that the company had, including the $6 million that it had borrowed from the two banks.The company's only remaining asset is Schwarzermorgen.The value of Schwarzermorgen has, however, dropped to $1.5 million.That land has now been sold and the only question before the court concerns the disposition of the $1.5 million in cash.Which of the following statements is TRUE?

A mortgage under a registry system involves an immediate conveyance of title, but a mortgage under a land titles system does not.

Pascale bought a piece of land called Blackacre from Jeff.The purchase price was $500 000.The purchase was made entirely on credit.Although Pascale has taken possession of Blackacre, she has not paid any part of the purchase price, despite being required to do so by the sales agreement.Jeff wants to have Blackacre seized and sold in order to provide a fund with which the purchase price can be paid.Unfortunately for him, he did not receive a mortgage over Blackacre.Is there any other basis upon which he can take action against Blackacre in order to receive payment? Explain your answer.

Raj bought a piece of land called Blackacre from Erin for $200 000.In making that purchase, he created a mortgage over Blackacre.Explain a situation in which the sale and the mortgage involved only Raj and Erin.Explain a situation in which the sale and the mortgage involved Raj, Erin, plus another person.

Briefly explain the need for some form of land registration system.

Robert borrowed money from Yanami.As security for that loan, he gave a mortgage over his house.The parties' agreement does not contain a prepayment privilege.Consequently, if Robert repays the loan more quickly than agreed, Yanami may be entitled to a bonus.