LA CIVIL UNIT 6-F SALES
Terms in this set (36)
Contract to Sell -
The contract that obligates the buyer and the seller.
Often called a Purchase Agreement
Contract of Sale (Conveyance) -
Often called just the Sale or a Conveyance.
An agreement by which one gives a thing (real estate) for a price in current money, and the other gives the price in order to have the thing (real estate) itself.
It is the instrument transferring the title.
Contract of Sale (Conveyance) -
In other states a Deed must be delivered to and accepted by the buyer to be effective. Not true in La.
The seller received full price in cash
Seller financed the sale. What is important is the written document that proves there was a transfer between seller and buyer.
Transfer Title in LA must have
All transfers of immovables must be in writing, as in other states.
How a Verbal Sale is good against a party
(1) the immovable has been actually delivered and
(2) he confesses it when interrogated under oath.
Legal Description on Transfer-
There should be a description sufficient to enable a person to locate and identify the property.
Authentic Act -
Act executed and signed by each party and two witnesses before a notary public. The party may affix his mark, if he doesn't know how to sign.
If a party is blind,
Must be three witnesses. Full proof of agreement.
Must be one of these two to transfer title
Authentic Act vs. Act under private signature -
Act under Private Signature -
Act signed by the parties. It is full proof against a party, only if it is acknowledged. One method is to recognize his signature before a notary public in the presence of two witnesses. Without full proof, a signature must be proved in court before it can be admitted into evidence.
Price Ought to be Serious
1. This means the intention is that it really be paid. The money may be paid now or later, as agreed.
2. It should be money if a sale, otherwise it is an exchange.
3. The price should be in proportion to the value of the immovable.
2. Lesion beyond moiety -
The price paid was less than half the value of the property at the time of the sale or option.
1.The seller may rescind the sale and get the property back by giving the buyer his money back plus paying for improvements made by the buyer or the buyer may pay the value difference plus interest and keep the property.
2.You have 4 years if the sale was prior to January 1, 1995 and 1 year if the sale was on or after January 1, 1995.
3.Because of Lesion beyond moiety, not stating the actual sale price in a sale creates a cloud on the title.
1.The seller warrants
1. 2 types of Peaceable Possession
2. That there are no hidden defects
3. Delivery of the immovable into the power and possession of the buyer
Seller Warrants 2 types of Peaceable Possession
1. Implied Warranty and
2. Warranty against eviction
Implied Warranty -
The seller implies by the sale that nobody has rights or claims against the immovable other than those declared at the time of the sale.
Warranty against eviction -
If others have rights not declared at sale, buyer loses all or part of his/her rights and this is called eviction.
Remedy for Eviction
Restitution of price, damages and costs, and other losses, less benefits the buyer has enjoyed.
Seller Warrants No Hidden Defects
2. Knowledge of the defect by Seller / Buyer
3. Prescription Period
4. Reduction in Price
The avoidance of a sale on account of some vice or defect in the immovable, which renders it either absolutely useless, or its use so inconvenient and imperfect, that it must be supposed that the buyer would not have purchased it had he known of the vice.
Two types of Defect Knowledge
Seller's knowledge and Buyer's knowledge
The seller does not have to know the defect was present to be held liable under redhibition. The defect must have been present before the sale, even though not discovered until after the sale.
The buyer does not get the right of redhibition if the defects are easily discovered by visual inspection (such as an obvious hole in the roof), if the buyer knew of the defects (such as he lived next door and knew the previous owner had severe problems with termites), or the defects were declared at the time of the purchase of the property (such as writing into the agreement that there is unrepaired flood damage).
3.Prescription Period -
The buyer must bring action within four years from the date of delivery sale or one year from the discovery of the defect, whichever occurs first.
4.Reduction in price (Quanti minoris) -
The buyer may demand or the judge may order a reduction in price instead of avoidance of the sale, known as quanti minoris.
5. Fraud -
If it can be proven the seller knew of the defect & did not disclose it, then attorney fees & damages (such as moving expenses, etc.) may also be recovered.
La. Bond for Deed
AKA Land Contract, Land Sales Contract, Installment Sale, Contract for Deed, and other similar terms has seven requirements:
Requirements for LA Bond for Deed
1. The seller enters into a contract to sell the real property to the buyer
2. The purchase price is to be paid to the seller by the buyer in installments
3. The seller keeps the legal title to the property during the payment of the installments but possession of the property is transferred to the buyer. After a payment of a stipulated sum (usually, but not required to be all) the seller transfers the legal title to the buyer
4. There must be a recorded written guarantee by the holder of a lien and/or mortgage to release the property upon payment of a stipulated release price.
5. If there is a lien or mortgage, payments must be made to an escrow agent which shall distribute payments proportionately between the holder of the mortgage or privilege and the seller.
6. Upon 45 days notice after the buyer's default in payments, the Bond for Deed may be canceled by filing such a notice in the proper conveyance records.
7. Basically, the law is written to protect both parties, if the buyer pays, the law protects the buyer's right to get legal title to the property, and if the buyer defaults, the law protects the seller's right to get the property back.
1. An exchange is a contract in which the parties give to each other a thing, other than money.
2. An exchange allows one to give a thing now, and wait for the other to give a thing later.
3. Exchanges are useful because there are favorable tax laws.
4. In an exchange, each party is considered as a seller and a buyer.
1.A(n) ____________________ is the contract that obligates the buyer and the seller.
Contract to Sell -- act under private signature, authentic act, bond for deed, contract of sale, contract to sell, deed, exchange, prescription, redhibition, reduction in price
2. An instrument in writing, duly executed and delivered by the grantor that conveys to the grantee some right, title or interest in or to real estate is called a(n) ____________________.
Deed -- act under private signature, authentic act, bond for deed, contract of sale, contract to sell, deed, exchange, prescription, redhibition, reduction in price
3. A(n) ____________________ is one executed and signed by each party and two witnesses before a notary public.
Act Under Private Signature -- act under private signature, authentic act, bond for deed, contract of sale, contract to sell, deed, exchange, prescription, redhibition, reduction in price
4. The right to have a sale rescinded or the price reduced due to a hidden defect which, had the buyer known of it, would have caused him or her to offer a lesser price or not act at all is called ____________________.
Redhibition -- act under private signature, authentic act, bond for deed, contract of sale, contract to sell, deed, exchange, prescription, redhibition, reduction in
5. The ____________________ is where the buyer must bring action within four years from the date of delivery sale or one year from the discovery of the defect, whichever occurs first.
Prescription Period -- act under private signature, authentic act, bond for deed, contract of sale, contract to sell, deed, exchange, prescription, redhibition, reduction in price
6. A(n) ____________________ is a contract in which the parties give to each other a thing, other than money.
Exchange -- act under private signature, authentic act, bond for deed, contract of sale, contract to sell, deed, exchange, prescription, redhibition, reduction in price