Buying and Selling Land

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Buying and Selling Land
Sophia Lynch
Flashcards by Sophia Lynch, updated more than 1 year ago
Sophia Lynch
Created by Sophia Lynch over 1 year ago
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Question Answer
What instances would you use this structure for? For the sale, purchase and transfer of land.
1 If there is a conditional contract... 1. Condition precedent - Were they intended to bar an equitable interest? 2. Condition subsequent - Create an equitable interest?
1.1 Condition Subsequent Sahade Sahade Option to purchase.
1.2 Condition Subsequent Nicholson Nicholson Condition solely for the benefit of the purchaser which can be waived at any time.
1.3 Condition Subsequent Bevin Bevin Specific performance required.
1.4 Condition Subsequent Motor Works Motor Works Right of refusal once triggered gives rise to an equitable interest.
What if there is an ADLS? You presume all conditions are condition subsequent as all are in the ADLS. Hence there is equitable interest.
1.5 Condition Precedent Palm Gardens Palm Gardens Only an intention NOT an equitable interest. PGP gave PG option to purchase apartment but they had no obligation to do this.
What should you be considering from this point? Whether there is/isn't an equitable interest.
2 What are the... ADLS What are the contractual provisions under the ADLS?
2.1 Clause 5 Clause 5 of ADLS - the risk stays with the vendor therefore protecting the purchaser in the in-between.
2.2 Damage If there is damage that is not repaired, what are the options?
2.2 a If untenable? If untenable - Can cancel or complete purchase less insurance money.
2.2 b If tenable? If tenable - Purchaser will complete less a sum to reinstate or repair damage.
2.2 c If rural? If rural - Damage untenable if diminution of value exceeds 25% and have right to cancel or complete purchase less insurance.
2.2 d Southland (Untenable) Southland: 1. Untenable means interference with tenant's ability to "enjoy" and "operate" premises. 2. Concerns their purpose for purchasing.
3 What are the... What are the statutory modifications?
3.1 Insurance law Can use vendor's insurance if they don't have their own.
3.2 If no insurance? If no insurance default rules offer remedies.
4 What are... What are the default rules?
Why is this only applicable if the contract is unconditional? If it is conditional you must wait until those conditions are met.
4.1 If vendor dies? If vendor dies, equitable title passes on contract and the vendor becomes trustee until the title is registered.
4.1 a Re Richards Re Richards: Here the purchaser had an equitable interest hence could sue the vendor for specific performance.
4.2 Risk of damage with purchaser... Risk of damage with purchaser but vendor must take reasonable care.
4.2 a Clark Clark: 1. Vendor has a duty to preserve the property but make reasonable use out of it. 2. If the vendor is aware of a breach and settles without telling the purchaser then they can waive the claim.
4.2 b Englewood Englewood: The trustee obligations of a vendor are limited, but they can still benefit from the land if they keep it in cultivation/current condition.
4.2 c Westpac Westpac: 1. No duty to act in good faith. 2. Vendor has fiduciary duty to deal with property in a consistent way with contract. 3. Just because there is an equitable interest, this doesn't make a fiduciary duty.
5 Was there... Was there a trespass?
What test should be done? Use the trespass structure.
5 a If ADLS contract....? If ADLS contract, vendor responcible.
5 b If no ADLS? If no ADLS, risk is with the purchaser who cannot do much unless the landlord was negligent.
5.1 If ADLS and damage occurs...? If ADLS and damage occurs , there are three options.
5.1 a Three situations? Untenable (5.2(1)) Tenable (5.2(2)) Rural
5.2 Default rules apply when? If no ADLS, default rules in relation to trespass are:
5.2 a Cousins Cousins: Could not prove loss to property so vendor owed nothing to purchasers. (Essentially purchaser loses out).
5.2 b Lockwood Lockwood: Law progressed, mortgagees can sue in trespass. Perhaps purchasers in the in-between have remedies.
5.2 c What would have been decided differently in Cousins? Lockwood Lockwood: Suggests purchasers should have settled in Cousins less the cost it took the vendor to replace the trees.
5.2 d What does Arroya discuss? Arroya: It states that in the cases Scutt and Bryant there were reasonable damages.
What is the example of this? Would cost $2 million to restore mature willow trees or $18k to plant new ones so find something in-between.
5.2 e What should you do if you're arguing for the purchaser if they have lost out on amenity value but no actual loss? Argue that amenity value was part of the sale and has been reduced by trespass so should have the right to sue.
NOTE: If two equitable contracts are competing, which one succeeds? The first in time succeeds. If you want to protect interest you must lodge a caveat.
5.3 ? Caveats.
What are caveats? These protect title but also freeze it. They are a red light on the title.
5.3 a Mortre Holdings Mortre Holdings: Common clauses in contracts that for sale/purchase situations, will not caveat titles but courts can hold these clauses invalid.
6 Is there a... Is there a transfer of Maori Freehold land?
6.1 How can you sell Maori land? You can only sell Maori land through the Maori Land Court.
6.2 How can someone alienate interest in MFL? Under s 146 of the Te True Whenua Maori Act you cannot alienate any interest in Maori freehold land unless the Maori Land Court approves.
6.3 What must you do if you are alienating? If alienating, must offer to preferred class of alienees - s147(a).
6.4 Te Whata Te Whata: 1. Current generation are custodians for the next. 2. You should not profit from MFL and you should maintain the land.
6.5 What does Ngatai consider? Factors to consider when applying to alienate land.
6.5 a Ngatai Reason for request - E.g. obtaining finance for family.
6.5 b Ngatai Change Maori freehold land to general land necessary to obtain finance.
6.5 c Ngatai It seems as if the purchaser will maintain the land and what it's used for in it's present use, even if converted.
6.5 d Ngatai If the land area is relatively small.
6.5 e Ngatai Act includes in its principles that it should benefit owners and their whanau.
NOTE: What is MFL very difficult to sell? Because you have to get approval from the MLC and getting this is very difficult.
6.6 What does Taueki concern? Preferred class of alienees (PCA).
6.6 a Taueki There is court discretion about how long PCA's have to accept the offer.
6.6 b Taueki Must be practical and reasonable. In this case the PCA's had to raise $450k which was not reasonable.
6.7 What does Thornton concern? Changing status.
6.7 a Thornton If you want to convert to sell, there is a high threshold to do so and it can only be done if all other routes are exhausted (offered to all PCA's).
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