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SPRING 2013 SUPPLEMENT FOR
S.J. QUINNEY COLLEGE OF LAW
LAW 7851 SECTION 1
REAL ESTATE TRANSFER, FINANCE AND DEVELOPMENT
PROFESSOR KEVIN R. MURRAY
TABLE OF CONTENTS
SECTION
Section 1 (Chapter 2)
Real Estate Purchase Contract
Exclusive Right to Sell Listing Agreement & Agency Disclosure
Exclusive Buyer-Broker Agreement & Agency Disclosure
Limited Agency Consent Agreement
Seller’s Property Condition Disclosure
Utah Statute of Frauds Re: Brokers
Ney v. Harrison, 299 P.2d 1114 (Utah 1956)
Richards v. Hodson, 485 P.2d 1044 (Utah 1971)
Fairbourn Commercial, Inc. v. American Housing Partners, Inc., 94 P.2d 292
(Utah 2004)
“Practice of Law” in Utah
Lawyers Acting as Brokers
1
Section 2 – (Chapter 4)
Estate or Interest in Real Property
Nielsen v. Gold’s Gym, 78 P.3d 600 (Utah 2003)
Representations, Warranties, Covenants and Conditions Tools of the Trade
Attorney Duties - Utah
Cannefax v. Clement, 818 P.2d 546 (Utah 1991)
2
Section 3 – (Chapter 5)
Mitchell v. Christensen, 31 P.3d 572 (Utah 2001)
Failure to Disclose for Stigma in Utah
Stambovsky v. Ackley, 169 A.D.2d 254 (N.Y. Sup. Ct. 1991)
Seller’s Property Condition Disclosure
3
Section 4 – (Chapter 6)
Secor v. Knight, 716 P.2d 790 (Utah 1986)
Mason v. Loveless, 24 P.3d 997 (Utah 2001)
4
Section 5 – (Chapter 8)
Deeds in Utah
5
Section 6 – (Chapter 9)
Coulter & Smith, Ltd. V. Russell, 976 P.2d 1218 (Utah 1999)
Land Survey Systems
6
Section 7 – (Chapter 10)
Chain of Title
Salt Lake County v. Metro West Ready Mix, Inc., 89 P.3d 155 (Utah 2004)
Real Estate Transactions: Problems, Cases and Materials/Robin Paul Malloy,
James Charles Smith. – 2nd Ed.
7
Section 8 – (Chapter 11)
8
Risky Business and the Business of Risk: Why We Need Title Insurance
Owner’s Policy of Title Insurance
Loan Policy of Title Insurance
Endorsements
BIBLIOGRAPHY
Statutes, Constitutions, and Court Rules
UTAH CODE ANN. § 25-5-4(1)(e).
UTAH CODE ANN. § 25-5-1.
UTAH CODE ANN. § 57-1-1.
UTAH CODE ANN. § 57-1-37.
UTAH CODE ANN. § 61-2f-202.
UTAH CODE ANN. § 78-9-102(1).
UTAH CONST. art. VIII, § 4.
UTAH SUP. CT. R. OF PROF’L PRACTICE. 14-802.
Ethics Opinions
ABA Comm. on Prof’l Ethics, Informal Op. C-709 (1964).
ABA Comm. on Ethics and Prof’l Responsibility, Formal Op. 328 (1972).
Articles
John Martinez, “Practice of Law” in Utah, in Real Estate Finance Supplement (Fall 2006).
Kevin R. Murray, Risky Business and the Business of Risk: Why We Need Title Insurance.
Gary Lee Phillips, Land Survey Systems, http://www.rootsweb.ancestry.com/~mnwabash/survey.
htm.
Cases
Bd. of Comm’rs v. Peterson, 97 P.2d 1263, 1270 (Utah 1997).
Cannefax v. Clement, 818 P.2d 546 (Utah 1991).
Coulter & Smith, Ltd. v. Russell, 976 P.2d 1218 (Utah Ct. App. 1999).
Fairbourn Commercial, Inc. v. Am. Hous. Partners, Inc., 94 P.3d 292 (Utah 2004).
In re Disciplinary Action of Davis, 754 P.2d 63 (Utah 1988).
Mason v. Loveless, 24 P.3d 997 (Utah Ct. App. 2001).
Mitchell v. Christensen, 31 P.3d 572 (Utah 2001).
Ney v. Harrison, 299 P.2d 1114 (Utah 1956).
Nielsen v. Gold’s Gym, 78 P.3d 600 (Utah 2003).
Richards v. Hodson, 485 P.2d 1044 (Utah 1971).
Salt Lake County v. Metro West Ready Mix, Inc., 89 P.3d 155 (Utah 2004).
Stambovsky v. Ackley, 572 N.Y.S.2d 672 (N.Y. App. Div. 1991).
Section 1
REAL ESTATE PURCHASE CONTRACT
This is a legally binding Real Estate Purchase Contract (“REPC”). Utah law requires real estate licensees to use this form. Buyer and Seller,
however, may agree to alter or delete its provisions or to use a different form. If you desire legal or tax advice, consult your attorney or tax
advisor.
OFFER TO PURCHASE AND EARNEST MONEY DEPOSIT
(“Buyer”)
On this _____ day of ____________, 20____ (“Offer Reference Date”)
offers to purchase from __________________________________________ (“Seller”) the Property described below and
[ ] delivers to the Buyer’s Brokerage with this offer, or [ ] agrees to deliver no later than four (4) calendar days
after Acceptance (as defined in Section 23), Earnest Money in the amount of $_______________ in the form
of___________________________________. After Acceptance of the REPC by Buyer and Seller, and receipt of the
Earnest Money by the Brokerage, the Brokerage shall have four (4) calendar days in which to deposit the Earnest Money
into the Brokerage Real Estate Trust Account.
Buyer’s Brokerage ___________________________________________ Phone:_________________________________
on
Received by:
(Date)
(Signature above acknowledges receipt of Earnest Money)
OTHER PROVISIONS
1. PROPERTY:
also described as:
City of
, County of
, State of Utah, Zip ___________ (the "Property").
Any reference below to the term “Property” shall include the Property described above, together with the Included Items and
water rights/water shares, if any, referenced in Sections 1.1, 1.2 and 1.4.
1.1 Included Items. Unless excluded herein, this sale includes the following items if presently owned and in place
on the Property: plumbing, heating, air conditioning fixtures and equipment; ovens, ranges and hoods; cook tops;
dishwashers; ceiling fans; water heaters; light fixtures and bulbs; bathroom fixtures and bathroom mirrors; curtains,
draperies, rods, window blinds and shutters; window and door screens; storm doors and windows; awnings; satellite dishes;
affixed carpets; automatic garage door openers and accompanying transmitters; security system; fencing and any
landscaping.
1.2 Other Included Items. The following items that are presently owned and in place on the Property have been left for the
convenience of the parties and are also included in this sale (check applicable box): [ ] washers [ ] dryers
[ ] refrigerators
[ ] water softeners [ ] microwave ovens [ ] other (specify)________________________________
__________________________________________________________________________________________________
The above checked items shall be conveyed to Buyer under separate bill of sale with warranties as to title.
1.3 Excluded Items. The following items are excluded from this sale: _____________________________________
__________________________________________________________________________________________________
1.4 Water Service. The Pu rchase Price for the Prop erty sh all in clude all water ri ghts/water share s, if any, that are the legal
source for Seller’s current culinary water service and irrigation water service, if any, to the Property. The water rights/water shares will
be co nveyed or ot herwise t ransferred t o B uyer at C losing by a pplicable d eed or leg al in struments. Th e fo llowing water ri ghts/water
shares, if applicable, are specifically excluded from this sale: ________________________
__________________________________________________________________________________________________
2. PURCHASE PRICE. The Purchase Price for the Property is $ ____________________. Except as provided in this
Section, the Purchase Price shall be paid as provided in Sections 2(a) through 2(d) below. Any amounts shown in 2(b) and
2(d) may be adjusted as deemed necessary by Buyer and the Lender.
$________________
(a) Earnest Money Deposit. Under certain conditions described in the REPC, this deposit may
become totally non refundable.
(b) New Loan. Buyer may apply for mortgage loan financing (the “Loan”) on terms acceptable to
Buyer: If an FHA/VA loan applies, see attached FHA/VA Loan Addendum.
(c) Seller Financing (see attached Seller Financing Addendum)
$
(d) Balance of Purchase Price in Cash at Settlement
$
PURCHASE PRICE. Total of lines (a) through (d)
$
$
Page 1 of 6 pages
Buyer’s Initials ________
Date
Seller’s Initials ________
Date
3. SETTLEMENT AND CLOSING.
3.1 Settlement. Settlement shall take place no later than the Settlement Deadline referenced in Section 24(d), or as
otherwise mutually agreed by Buyer and Seller in writing. “Settlement" shall occur only when all of the following have been
completed: (a) Buyer and Seller have signed and delivered to each other or to the escrow/closing office all documents
required by the REPC, by the Lender, by the title insurance and escrow/closing offices, by written escrow instructions
(including any split closing instructions, if applicable), or by applicable law; (b) any monies required to be paid by Buyer or
Seller under these documents (except for the proceeds of any new loan) have been delivered by Buyer or Seller to the
other party, or to the escrow/closing office, in the form of cash, wire transfer, cashier’s check, or other form acceptable to
the escrow/closing office.
3.2 Prorations. All prorations, including, but not limited to, homeowner’s association dues, property taxes for the
current year, rents, and interest on assumed obligations, if any, shall be made as of the Settlement Deadline referenced in
Section 24(d), unless otherwise agreed to in writing by the parties. Such writing could include the settlement statement. The
provisions of this Section 3.2 shall survive Closing.
3.3 Special Assessments. Any assessments for capital improvements as approved by the HOA (pursuant to HOA
governing documents) or as assessed by a municipality or special improvement district, prior to the Settlement Deadline
____
shall be paid for by: [ ] Seller [ ] Buyer [ ] Split Equally Between Buyer and Seller [ ] Other (explain) _
_____
__. The provisions of this Section 3.3 shall survive
Closing.
3.4 Fees/Costs/Payment Obligations. Unless otherwise agreed to in writing, Seller and Buyer shall each pay onehalf (1/2) of the fee charged by the escrow/closing office for its services in the settlement/closing process. Tenant deposits
(including, but not limited to, security deposits, cleaning deposits and prepaid rents) shall be paid or credited by Seller to
Buyer at Settlement. Buyer agrees to be responsible for homeowners’ association and private and public utility service
transfer fees, if any, and all utilities and other services provided to the Property after the Settlement Deadline. The
escrow/closing office is authorized and directed to withhold from Seller’s proceeds at Closing, sufficient funds to pay off on
Seller’s behalf all mortgages, trust deeds, judgments, mechanic's liens, tax liens and warrants. The provisions of this
Section 3.4 shall survive Closing.
3.5 Closing. For purposes of the REPC, “Closing” means that: (a) Settlement has been completed; (b) the proceeds
of any new loan have been delivered by the Lender to Seller or to the escrow/closing office; and (c) the applicable Closing
documents have been recorded in the office of the county recorder. The actions described in 3.5 (b) and (c) shall be
completed within four calendar days after Settlement.
4. POSSESSION. Seller shall deliver physical possession of the Property to Buyer as follows: [ ] Upon Closing;
Calendar Days after Closing. Any contracted rental of the Property prior to or after
[ ] ___Hours after Closing; [ ]
Closing, between Buyer and Seller, shall be by separate written agreement. Seller and Buyer shall each be responsible for
any insurance coverage each party deems necessary for the Property including any personal property and belongings.
Seller agrees to deliver the Property to Buyer in broom-clean condition and free of debris and personal belongings. Any
Seller or tenant moving-related damage to the Property shall be repaired at Seller's expense. The provisions of this Section
4 shall survive Closing.
5. CONFIRMATION OF AGENCY DISCLOSURE. Buyer and Seller acknowledge prior written receipt of agency
disclosure provided by their respective agent that has disclosed the agency relationships confirmed below. At the signing of
the REPC:
, represents [ ] Seller [ ] both Buyer and Seller as a Limited Agent;
Seller’s Agent
Seller’s Brokerage
, represents [ ] Seller [ ] both Buyer and Seller as a Limited Agent;
Buyer’s Agent
, represents [ ] Buyer [ ] both Buyer and Seller as a Limited Agent;
Buyer’s Brokerage
, represents [ ] Buyer [ ] both Buyer and Seller as a Limited Agent.
6.
TITLE & TITLE INSURANCE.
6.1 Title to Property. Seller represents that Seller has fee title to the Property and will convey marketable title to
the Property to Buyer at Closing by general warranty deed. Buyer does agree to accept title to the Property subject to the
contents of the Commitment for Title Insurance (the “Commitment”) provided by Seller under Section 7, and as reviewed
and approved by Buyer under Section 8. Buyer also agrees to accept title to the Property subject to any existing leases,
rental and property management agreements affecting the Property not expiring prior to Closing which were provided to
Buyer pursuant to Section 7(e). The provisions of this Section 6.1 shall survive Closing.
6.2 Title Insurance. At Settlement, Seller agrees to pay for and cause to be issued in favor of Buyer, through the
title insurance agency that issued the Commitment (the “Issuing Agent”), the most current version of the ALTA
Homeowner’s Policy of Title Insurance (the “Homeowner’s Policy”). If the Homeowner’s Policy is not available through the
Page 2 of 6 pages
Buyer’s Initials ________
Date
Seller’s Initials ________
Date
Issuing Agent, Buyer and Seller further agree as follows: (a) Seller agrees to pay for the Homeowner’s Policy if available
through any other title insurance agency selected by Buyer; (b) if the Homeowner’s Policy is not available either through the
Issuing Agent or any other title insurance agency, then Seller agrees to pay for, and Buyer agrees to accept, the most
current available version of an ALTA Owner’s Policy of Title Insurance (“Standard Coverage Owner’s Policy”) available
through the Issuing Agent.
7. SELLER DISCLOSURES. No later than the Seller Disclosure Deadline referenced in Section 24(a), Seller shall provide
to Buyer the following documents in hard copy or electronic format which are collectively referred to as the "Seller
Disclosures":
(a) a written Seller property condition disclosure for the Property, completed, signed and dated by Seller as provided in
Section10.3;
(b) a Commitment for Title Insurance as referenced in Section 6;
(c) a copy of any restrictive covenants (CC&R’s), rules and regulations affecting the Property;
(d) a copy of the most recent minutes, budget and financial statement for the homeowners’ association, if any;
(e) a copy of any lease, rental, and property management agreements affecting the Property not expiring prior to Closing;
(f) evidence of any water rights and/or water shares referenced in Section 1.4;
(g) written notice of any claims and/or conditions known to Seller relating to environmental problems and building or zoning
code violations; and
______
(h) Other (specify)
____________
8. BUYER’S CONDITIONS OF PURCHASE.
8.1
DUE DILIGENCE CONDITION. B uyer's obligation to purchase the Property: [ ] IS [ ] IS NOT conditioned upon
Buyer’s Due Diligence as defin ed in th is Sectio n 8.1(a) b elow. This condition is referred to as the “Du e Dilig ence Con dition.” If
checked in the affirmative, Sections 8.1(a) through 8.1(c) apply; otherwise they do not.
(a) Due Diligence Items. Buyer’s Due Diligence shall consist of Buyer’s review and approval of the contents of the Seller
Disclosures referenced in Section 7, and a ny other tests, e valuations and verifications of the Property deemed necessary or a ppropriate
by Buyer, such as: the physical condition of the Pr operty; the existence of any hazardous substances, environmental issues or geologic
conditions; th e squ are foo tage or acreag e of th e lan d and /or improvements; th e con dition of th e ro of, walls, an d fou ndation; th e
condition of the plumbing, electrical, mechanical, heating and air conditioning systems and fixtures; the condition of all appliances; the
costs and availability of homeowners’ insurance and flood insurance, if applicable; water source, availability and quality; the location of
property lin es; reg ulatory use restriction s or v iolations; fees for serv ices su ch as HOA du es, m unicipal serv ices, an d u tility costs;
convicted sex offenders residing in proximity to the Property; and any other matters deemed material to Buyer in making a decision to
purchase the Property. Unless otherwise provided in th e REPC, all of Buyer’s Due Diligence shall be paid for by Buyer and shall be
conducted by individuals or entities of Buyer's choice. Seller agrees to cooperate with Buyer’s Due Diligence. Buyer agrees to pay for
any damage to the Property resulting from any such inspections or tests during the Due Diligence.
(b) Buyer’s Right to Cancel or Resolve Objections. If Buyer determines, in Buyer’s sole discretion, that the
results of the Due Diligence are unacceptable, Buyer may either: (i) no later than the Due Diligence Deadline referenced in
Section 24(b), cancel the REPC by providing written notice to Seller, whereupon the Earnest Money Deposit shall be
released to Buyer without the requirement of further written authorization from Seller; or (ii) no later than the Due Diligence
Deadline referenced in Section 24(b), resolve in writing with Seller any objections Buyer has arising from Buyer’s Due
Diligence.
(c) Failure to Cancel or Resolve Objections. If Buyer fails to cancel the REPC or fails to resolve in writing
any objections Buyer has arising from Buyer’s Due Diligence, as provided in Section 8.1(b), Buyer shall be deemed to have
waived the Due Diligence Condition.
8.2
APPRAISAL CONDITION. Buyer's obligation to purchase the Property: [ ] IS [ ] IS NOT conditioned upon
the Property appraising for not less than the Purchase Price. This condition is referred to as the “Appraisal Condition.” If
checked in the affirmative, Sections 8.2(a) and 8.2(b) apply; otherwise they do not.
(a) Buyer’s Right to Cancel. If after completion of an appraisal by a licensed appraiser, Buyer receives written
notice from the Lender or the appraiser that the Property has appraised for less than the Purchase Price (a “Notice of
Appraised Value”), Buyer may cancel the REPC by providing written notice to Seller (with a copy of the Notice of Appraised
Value) no later than the Financing & Appraisal Deadline referenced in Section 24(c); whereupon the Earnest Money
Deposit shall be released to Buyer without the requirement of further written authorization from Seller.
(b) Failure to Cancel. If the REPC is not cancelled as provided in this section 8.2, Buyer shall be deemed to have
waived the Appraisal Condition.
8.3
FINANCING CONDITION. Buyer’s obligation to purchase the property: [ ] IS [ ] IS NOT conditioned upon
Buyer obtaining the Loan referenced in Section 2(b). This condition is referred to as the “Financing Condition.” If checked
in the affirmative, Sections 8.3(a) and 8.3(b) apply; otherwise they do not. If the Financing Condition applies, Buyer agrees to
work diligently and in good faith to obtain the Loan.
Page 3 of 6 pages
Buyer’s Initials ________
Date
Seller’s Initials ________
Date
(a) Buyer’s Right to Cancel Before the Financing & Appraisal Deadline. If Buyer, in Buyer’s sole discretion, is
not satisfied with the terms and conditions of the Loan, Buyer may cancel the REPC by providing written notice to Seller no
later than the Financing & Appraisal Deadline referenced in Section 24(c); whereupon the Earnest Money Deposit shall be
released to Buyer without the requirement of further written authorization from Seller.
(b) Buyer’s Right to Cancel After the Financing & Appraisal Deadline. If after expiration of the Financing &
Appraisal Deadline referenced in Section 24(c), Buyer fails to obtain the Loan, meaning that the proceeds of the Loan have
not been delivered by the Lender to Seller or to the escrow/closing office as required under Section 3.5 of the REPC, then
Buyer or Seller may cancel the REPC by providing written notice to the other party; whereupon the Earnest Money Deposit,
or Deposits, if applicable (see Section 8.4 below), shall be released to Seller without the requirement of further written
authorization from Buyer. In the event of such cancellation, Seller agrees to accept as Seller’s exclusive remedy, the
Earnest Money Deposit, or Deposits, if applicable, as liquidated damages. Buyer and Seller agree that liquidated damages
would be difficult and impractical to calculate, and the Earnest Money Deposit, or Deposits, if applicable, is a fair and
reasonable estimate of Seller’s damages in the event Buyer fails to obtain the Loan.
8.4 ADDITIONAL EARNEST MONEY DEPOSIT. If the REPC has not been previously canceled by Buyer as provided in
Sections 8.1, 8.2 or 8.3(a), then no later th an th e Du e Diligence Dead line referen ced in Sectio n 24 (b), o r the Financing & App raisal
Deadline referenced in Section 24(c), whichever is later, Buyer: [ ] WILL [ ] WILL NOT deliver to the Buyer’s Brokerage, an
Additional Earnest Money Deposit in the am ount of $_________________. The Earnest Money Deposit and the Additional Earnest
Money Depo sit, if ap plicable, are so metimes referred t o h erein as the “Depo sits”. The Earn est Money Depo sit, o r Depo sits, if
applicable, shall be credited toward the Purchase Price at Closing.
9. ADDENDA. There [ ] ARE [ ] ARE NOT addenda to the REPC containing additional terms. If there are, the terms of
the following addenda are incorporated into the REPC by this reference: [ ] Addendum No. ___
_____
[ ] Seller Financing Addendum [ ] FHA/VA Loan Addendum [ ] Lead-Based Paint Disclosure & Acknowledgement
(in some transactions this disclosure is required by law) [ ] Other (specify)
10. HOME WARRANTY PLAN / AS-IS CONDITION OF PROPERTY.
10.1 Home Warranty Plan. A one-year Home Warranty Plan [ ] WILL [ ] WILL NOT be included in this transaction.
If included, the Home Warranty Plan shall be ordered by [ ] Buyer [ ] Seller and shall be issued by a company selected
and shall be paid for at
by [ ] Buyer [ ] Seller. The cost of the Home Warranty Plan shall not exceed $
Settlement by [ ] Buyer [ ] Seller.
10.2 Condition of Property/Buyer Acknowledgements. Buyer acknowledges and agrees that in reference to the
physical condition of the Property: (a) Buyer is purchasing the Property in its “As-Is” condition without expressed or implied
warranties of any kind; (b) Buyer shall have, during Buyer’s Due Diligence as referenced in Section 8.1, an opportunity to
completely inspect and evaluate the condition of the Property; and (c) if based on the Buyer’s Due Diligence, Buyer elects
to proceed with the purchase of the Property, Buyer is relying wholly on Buyer’s own judgment and that of any contractors
or inspectors engaged by Buyer to review, evaluate and inspect the Property.
10.3 Condition of Property/Seller Acknowledgements. Seller acknowledges and agrees that in reference to the
physical condition of the Property, Seller agrees to: (a) disclose in writing to Buyer defects in the Property known to Seller
that materially affect the value of the Property that cannot be discovered by a reasonable inspection by an ordinary prudent
Buyer; (b) carefully review, complete, and provide to Buyer a written Seller property condition disclosure as stated in section
7(a); and (c) deliver the Property to Buyer in substantially the same general condition as it was on the date of Acceptance,
as defined in Section 23, ordinary wear and tear excepted. The provisions of Sections 10.2 and 10.3 shall survive Closing.
11. FINAL PRE-SETTLEMENT WALK-THROUGH INSPECTION.
11.1
Walk-Through Inspection. No earlier than seven (7) calendar days prior to Settlement, and upon reasonable
notice and at a reasonable time, Buyer may conduct a final pre-Settlement walk-through inspection of the Property to
determine only that the Property is “as represented,” meaning that the items referenced in Sections 1.1, 1.2 and 8.1(b)(ii)
("the items") are respectively present, repaired or corrected as agreed. The failure to conduct a walk-through inspection or
to claim that an item is not as represented shall not constitute a waiver by Buyer of the right to receive, on the date of
possession, the items as represented. If the items are not as represented, Seller agrees to cause all applicable items to be
corrected, repaired or replaced (the “Work”) prior to the Settlement Deadline referenced in Section 24(d).
11.2
Escrow to Complete the Work. If, as of Settlement, the Work has not been completed, then Buyer and Seller
agree to withhold in escrow at Settlement a reasonable amount agreed to by Seller, Buyer (and Lender, if applicable),
sufficient to pay for completion of the Work. If the Work is not completed within thirty (30) calendar days after the Settlement
Deadline, the amount so escrowed may, subject to Lender’s approval, be released to Buyer as liquidated damages for failure
to complete the Work. The provisions of this Section 11.2 shall survive Closing.
12. CHANGES DURING TRANSACTION. Seller agrees that from the date of Acceptance until the date of Closing, none of
the following shall occur without the prior written consent of Buyer: (a) no changes in any leases, rental or property
management agreements shall be made; (b) no new lease, rental or property management agreements shall be entered
Page 4 of 6 pages
Buyer’s Initials ________
Date
Seller’s Initials ________
Date
into; (c) no substantial alterations or improvements to the Property shall be made or undertaken; (d) no further financial
encumbrances to the Property shall be made, and (e) no changes in the legal title to the Property shall be made.
13. AUTHORITY OF SIGNERS. If Buyer or Seller is a corporation, partnership, trust, estate, limited liability company or
other entity, the person signing the REPC on its behalf warrants his or her authority to do so and to bind Buyer and Seller.
14. COMPLETE CONTRACT. The REPC together with its addenda, any attached exhibits, and Seller Disclosures
(collectively referred to as the “REPC”), constitutes the entire contract between the parties and supersedes and replaces
any and all prior negotiations, representations, warranties, understandings or contracts between the parties whether verbal
or otherwise. The REPC cannot be changed except by written agreement of the parties.
15. MEDIATION. Any dispute relating to the REPC arising prior to or after Closing: [ ] SHALL [ ] MAY AT THE OPTION
OF THE PARTIES first be submitted to mediation. Mediation is a process in which the parties meet with an impartial
person who helps to resolve the dispute informally and confidentially. Mediators cannot impose binding decisions. The
parties to the dispute must agree before any settlement is binding. The parties will jointly appoint an acceptable mediator
and share equally in the cost of such mediation. If mediation fails, the other procedures and remedies available under the
REPC shall apply. Nothing in this Section 15 prohibits any party from seeking emergency legal or equitable relief, pending
mediation. The provisions of this Section 15 shall survive Closing.
16. DEFAULT.
16.1 Buyer Default. If Buyer defaults, Seller may elect one of the following remedies: (a) cancel the REPC and retain
the Earnest Money Deposit, or Deposits, if applicable, as liquidated damages; (b) maintain the Earnest Money Deposit, or
Deposits, if applicable, in trust and sue Buyer to specifically enforce the REPC; or (c) return the Earnest Money Deposit, or
Deposits, if applicable, to Buyer and pursue any other remedies available at law.
16.2 Seller Default. If Seller defaults, Buyer may elect one of the following remedies: (a) cancel the REPC, and in
addition to the return of the Earnest Money Deposit, or Deposits, if applicable, Buyer may elect to accept from Seller, as
liquidated damages, a sum equal to the Earnest Money Deposit, or Deposits, if applicable; or (b) maintain the Earnest
Money Deposit, or Deposits, if applicable, in trust and sue Seller to specifically enforce the REPC; or (c) accept a return of
the Earnest Money Deposit, or Deposits, if applicable, and pursue any other remedies available at law. If Buyer elects to
accept liquidated damages, Seller agrees to pay the liquidated damages to Buyer upon demand.
17. ATTORNEY FEES AND COSTS/GOVERNING LAW. In the event of litigation or binding arbitration to enforce the
REPC, the prevailing party shall be entitled to costs and reasonable attorney fees. However, attorney fees shall not be
awarded for participation in mediation under Section 15. This contract shall be governed by and construed in accordance
with the laws of the State of Utah. The provisions of this Section 17 shall survive Closing.
18. NOTICES. Except as provided in Section 23, all notices required under the REPC must be: (a) in writing; (b) signed by
the Buyer or Seller giving notice; and (c) received by the Buyer or the Seller, or their respective agent, or by the brokerage
firm representing the Buyer or Seller, no later than the applicable date referenced in the REPC.
19. NO ASSIGNMENT. The REPC and the rights and obligations of Buyer hereunder, are personal to Buyer. The REPC
may not be assigned by Buyer without the prior written consent of Seller. Provided, however, the transfer of Buyer’s interest
in the REPC to any business entity in which Buyer holds a legal interest, including, but not limited to, a family partnership,
family trust, limited liability company, partnership, or corporation (collectively referred to as a “Permissible Transfer”), shall
not be treated as an assignment by Buyer that requires Seller’s prior written consent. Furthermore, the inclusion of “and/or
assigns” or similar language on the line identifying Buyer on the first page of the REPC shall constitute Seller’s written
consent only to a Permissible Transfer.
20. INSURANCE & RISK OF LOSS.
20.1
Insurance Coverage. As of Closing, Buyer shall be responsible to obtain casualty and liability insurance
coverage on the Property in amounts acceptable to Buyer and Buyer’s Lender, if applicable.
20.2
Risk of Loss. If prior to Closing, any part of the Property is damaged or destroyed by fire, vandalism, flood,
earthquake, or act of God, the risk of such loss or damage shall be borne by Seller; provided however, that if the cost of
repairing such loss or damage would exceed ten percent (10%) of the Purchase Price referenced in Section 2, either Seller
or Buyer may elect to cancel the REPC by providing written notice to the other party, in which instance the Earnest Money
Deposit, or Deposits, if applicable, shall be returned to Buyer.
21. TIME IS OF THE ESSENCE. Time is of the essence regarding the dates set forth in the REPC. Extensions must be
agreed to in writing by all parties. Unless otherwise explicitly stated in the REPC: (a) performance under each Section of
the REPC which references a date shall absolutely be required by 5:00 PM Mountain Time on the stated date; and (b) the
term "days" and “calendar days” shall mean calendar days and shall be counted beginning on the day following the event
which triggers the timing requirement (e.g. Acceptance). Performance dates and times referenced herein shall not be
binding upon title companies, lenders, appraisers and others not parties to the REPC, except as otherwise agreed to in
Page 5 of 6 pages
Buyer’s Initials ________
Date
Seller’s Initials ________
Date
writing by such non-party.
22. ELECTRONIC TRANSMISSION AND COUNTERPARTS. Electronic transmission (including email and fax) of a signed
copy of the REPC, any addenda and counteroffers, and the retransmission of any signed electronic transmission shall be
the same as delivery of an original. The REPC and any addenda and counteroffers may be executed in counterparts.
23. ACCEPTANCE. "Acceptance" occurs only when all of the following have occurred: (a) Seller or Buyer has signed the
offer or counteroffer where noted to indicate acceptance; and (b) Seller or Buyer or their agent has communicated to the
other party or to the other party’s agent that the offer or counteroffer has been signed as required.
24. CONTRACT DEADLINES. Buyer and Seller agree that the following deadlines shall apply to the REPC:
(a) Seller Disclosure Deadline
(Date)
(b) Due Diligence Deadline
(Date)
(c) Financing & Appraisal Deadline
(Date)
(d) Settlement Deadline
(Date)
25. OFFER AND TIME FOR ACCEPTANCE. Buyer offers to purchase the Property on the above terms and conditions. If
[ ] AM [ ] PM Mountain Time on
Seller does not accept this offer by: _______
(Date), this offer shall lapse; and the Brokerage shall return any Earnest Money Deposit to Buyer.
(Buyer’s Signature)
(Offer Date)
(Buyer’s Signature)
(Offer Date)
(Buyer’s Names) (PLEASE PRINT)
(Notice Address)
(Zip Code)
(Phone)
(Buyer’s Names) (PLEASE PRINT)
(Notice Address)
(Zip Code)
(Phone)
ACCEPTANCE/COUNTEROFFER/REJECTION
CHECK ONE:
[ ] ACCEPTANCE OF OFFER TO PURCHASE: Seller Accepts the foregoing offer on the terms and conditions specified
above.
[ ] COUNTEROFFER: Seller presents for Buyer’s Acceptance the terms of Buyer’s offer subject to the exceptions or
.
modifications as specified in the attached ADDENDUM NO.
[ ] REJECTION: Seller rejects the foregoing offer.
(Seller’s Signature)
(Date) (Time)
(Seller’s Signature)
(Date)(Time)
(Seller’s Names) (PLEASE PRINT)
(Notice Address)
(Zip Code)
(Phone)
(Seller’s Names) (PLEASE PRINT)
(Notice Address)
(Zip Code)
(Phone)
THIS FORM APPROVED BY THE UTAH REAL ESTATE COMMISSION AND THE OFFICE OF THE UTAH ATTORNEY GENERAL,
EFFECTIVE AUGUST 27, 2008. AS OF JANUARY 1, 2009, IT WILL REPLACE AND SUPERSEDE THE PREVIOUSLY APPROVED VERSION OF THIS FORM.
Page 6 of 6 pages
Buyer’s Initials ________
Date
Seller’s Initials ________
Date
EXCLUSIVE RIGHT TO SELL LISTING AGREEMENT
& AGENCY DISCLOSURE
THIS IS A LEGALLY BINDING AGREEMENT - READ CAREFULLY BEFORE SIGNING
DESIGNATED AGENCY BROKERAGE
THIS EXCLUSIVE RIGHT TO SELL LISTING AGREEMENT & AGENCY DISCLOSURE (“Listing Agreement”) is entered
into by and between ______________________________________ (the "Company") and ________________________
____________________________________ (the “Seller”).
1.
TERM OF LISTING. The Seller hereby grants to the Company, including ________________________________
(the "Seller's Agent") as the authorized agent for the Company starting on the Effective Date as defined in section 16
below, and ending at 5:00 P.M. (Mountain Time) on the ______ day of ___________________, 20____ (the "Listing
Period"), the exclusive right to sell, lease, or exchange real property owned by the Seller, described as:
________________________________________________________________________ (the "Property"), at the listing
price and terms stated on the attached property data form (the “Data Form”), or at such other price and terms to which the
Seller may agree in writing.
2.
BROKERAGE FEE. If, during the Listing Period, the Company, the Seller's Agent, the Seller, another real estate
agent, or anyone else locates a party who is ready, willing and able to buy, lease or exchange (collectively "acquire") the
Property, or any part thereof, at the listing price and terms stated on the Data Form, or any other price and terms to which
the Seller may agree in writing, the Seller agrees to pay to the Company a brokerage fee in the amount of $ ___________
or _______% of such acquisition price (the “Brokerage Fee”). The Brokerage Fee, unless otherwise agreed in writing by
the Seller and the Company, shall be due and payable from the Seller’s proceeds on: (a) If a purchase, the date of
recording of the Closing documents for the acquisition of the Property; (b) If a lease, the effective date of the lease; and
(c) if an option, the date the option agreement is signed. If within the Listing Period, or any extension of the Listing Period,
the Property is withdrawn from sale, transferred, conveyed, leased, rented, or made unmarketable by a voluntary act of
Seller, without the written consent of the Company; or if the sale is prevented by default of the Seller, the Brokerage Fee
shall be immediately due and payable to the Company. The Company is authorized to share the Brokerage Fee with
another brokerage participating in any transaction arising out of this Listing Agreement.
3.
PROTECTION PERIOD. If within _______months after the termination or expiration of this Listing Agreement, the
Property is acquired by any party to whom the Property was offered or shown by the Company, the Seller's Agent, the
Seller, or another real estate agent during the Listing Period, or any extension of the Listing Period, the Seller agrees to
pay to the Company the Brokerage Fee stated in Section 2, unless the Seller is obligated to pay a Brokerage Fee on such
acquisition to another brokerage based on another valid listing agreement entered into after the expiration or termination
date of this Listing Agreement.
4.
SELLER WARRANTIES/DISCLOSURES. The Seller warrants to the Company that the individuals or entity listed
above as the "Seller" represents all of the record owners of the Property. The Seller warrants that Seller has marketable
title and an established right to sell, lease or exchange the Property. The Seller agrees to execute the necessary
documents of conveyance. The Seller agrees to furnish buyer with good and marketable title, and to pay at Settlement, for
a policy of title insurance in accordance with the terms of any real estate purchase contract entered into between buyer
and Seller. The Seller agrees to fully inform the Seller's Agent regarding the Seller's knowledge of the condition of the
Property. Upon signing of this Listing Agreement, the Seller agrees to personally complete and sign a Seller's Property
Condition Disclosure form. The Seller agrees to indemnify and hold harmless the Seller's Agent and the Company against
any claims that may arise from: (a) The Seller providing incorrect or inaccurate information regarding the Property; (b)The
Seller failing to disclose material information regarding the Property, including, but not limited to, the condition of all
appliances; the condition of heating, plumbing, and electrical fixtures and equipment; sewer problems; moisture or other
problems in the roof or foundation; the availability and location of utilities; and the location of property lines; and (c) Any
injuries resulting from any unsafe conditions within the Property.
AGENCY RELATIONSHIPS.
5.1
Duties of a Seller’s Agent. By signing this Listing Agreement, the Seller designates the Seller’s Agent
and the Principal/Branch Broker for the Company (the “Broker”), as agents for the Seller to locate a buyer for the Property.
The Seller authorizes the Seller’s Agent or the Broker to appoint another agent in the Company to also represent the
Seller in the event the Seller’s Agent or the Broker will be unavailable to service the Seller. As agents for the Seller, they
Page 1 of 3
Seller’s Initials [
] Date ______________________
5.
have fiduciary duties to the Seller that include loyalty, obedience, full disclosure, confidentiality, reasonable care, and any
other duties required by law.
5.2
Duties of a Limited Agent. The Seller understands that the Seller’s Agent and the Broker may now, or in
the future, be agents for a buyer who may wish to negotiate a purchase of the Property. Then the Seller’s Agent and the
Broker may be acting as Limited Agents - representing both the Seller and buyer at the same time. A Limited Agent has
fiduciary duties to both the Seller and the buyer as required by law. However, some of those duties are “limited” because
the agent cannot provide to both parties undivided loyalty, confidentiality and disclosure. For this reason, the Limited
Agent is bound by a further duty of neutrality. Being neutral, the Limited Agent may not disclose to either party information
likely to weaken the bargaining position of the other – for example, the highest price the buyer will offer, or the lowest
price the Seller will accept. However, the Limited Agent will be required to disclose information given to the agent in
confidence by the other party if failure to disclose such information would be a material misrepresentation regarding the
Property or regarding the ability of the parties to fulfill their obligations. The Seller is advised that neither the Seller nor the
buyer is required to accept a limited agency situation in the Company, and each party is entitled to be represented by its
own agent. In the event a limited agency situation arises, the Seller’s Agent and the Broker, as applicable, may only act as
Limited Agents based upon a separate Limited Agency Consent Agreement signed by the Seller and buyer.
6.
PROFESSIONAL ADVICE. The Company and the Seller’s Agent are trained in the marketing of real estate.
Neither the Company nor its agents are trained or licensed to provide the Seller or any prospective buyer with legal or tax
advice, or with technical advice regarding the physical condition of the Property. The Seller is advised not to rely on the
Company, or any agents of the Company, for a determination regarding the physical or legal condition of the Property. If
the Seller desires advice regarding: (a) Past or present compliance with zoning and building code requirements; (b) Legal
or tax matters; (c) The physical condition of the Property; (d) This Listing Agreement; or (e) Any transaction for the
acquisition of the Property, the Seller's Agent and the Company strongly recommend that the Seller obtain such
independent advice. If the Seller fails to do so, the Seller is acting contrary to the advice of the Company.
7.
DISPUTE RESOLUTION. The parties agree that any dispute, arising prior to or after a Closing, related to this
Listing Agreement shall first be submitted to mediation through a mediation provider mutually agreed upon by the Seller
and the Company. Each party agrees to bear its own costs of mediation. If mediation fails, any other remedies available at
law shall apply.
8.
ATTORNEY FEES/GOVERNING LAW. Except as provided in Section 7, in case of the employment of an
attorney in any matter arising out of this Listing Agreement, the prevailing party shall be entitled to receive from the other
party all costs and attorney fees, whether the matter is resolved through court action or otherwise. If, through no fault of
the Company, any litigation arises out of the Seller's employment of the Company under this Listing Agreement (whether
before or after a Closing), the Seller agrees to indemnify the Company and the Seller's Agent from all costs and attorney
fees incurred by the Company and/or the Seller's Agent in pursuing and/or defending such action. This Listing Agreement
shall be governed and construed in accordance with the laws of the State of Utah.
9.
ADVERTISING/SELLER AUTHORIZATIONS. The Seller authorizes the Company and the Seller’s Agent to
advertise the Property for sale through any printed and/or electronic media deemed necessary and appropriate by the
Seller’s Agent and the Company, including, but not limited to, each Multiple Listing Service (MLS) in which the Company
participates. The Seller agrees that any advertising the Seller intends to conduct, including print and/or electronic media,
shall first be approved in writing by the Seller’s Agent. The Seller further agrees that the Seller’s Agent and the Company
are authorized to:
(a) Disclose to the MLS after Closing, the final terms and sales price for the Property consistent with the
requirements of the MLS;
(b) Obtain financial information from any lender or other party holding a lien or interest on the Property;
(c) Have keys to the Property, if applicable;
(d) Have an MLS or local board of Realtors® approved/endorsed security key-box installed on the Property. If
the Seller authorizes the Broker, or Seller’s Agent, to install a non-MLS or local board of Realtors®
approved/endorsed security key-box on the Property, Seller acknowledges that it may not provide the same
level of security as the MLS or local board of Realtors® approved/endorsed security key-box;
(e) Hold Open-Houses at the Property;
(f) Place for sale, sold, or other similar signs (“Signs”) on the Property (i.e., the only Signs on the
Property shall be that of the Company);
(g) Order a Preliminary Title Report on the Property;
(h) Order a Home Warranty Plan, if applicable;
(i) Communicate with the Seller for the purpose of soliciting real estate related goods and services during and
after the term of this Listing Agreement; and
Page 2 of 3
Seller’s Initials [
] Date ______________________
(j) Place the Earnest Money Deposit into an interest-bearing trust account with interest paid to the Utah
Association of Realtors® Housing Opportunity Fund (UARHOF) to assist in creating affordable housing
throughout the state.
10.
PERSONAL PROPERTY. The Seller acknowledges that the Company has discussed with the Seller the
safeguarding of personal property and valuables located within the Property. The Seller acknowledges that the Company
is not an insurer against the loss of or damage to personal property. The Seller agrees to hold the Company harmless
from any loss or damage that might result from any authorizations given in Section 9.
11.
ATTACHMENT. The Data Form is incorporated into this Listing Agreement by this reference. In addition to the
Data Form, there [
] ARE [
] ARE NOT additional terms contained in an Addendum attached to this Listing
Agreement. If an Addendum is attached, the terms of that Addendum are incorporated into this Listing Agreement by this
reference.
12.
EQUAL HOUSING OPPORTUNITY. The Seller and the Company shall comply with Federal, State, and local fair
housing laws.
13.
ELECTRONIC TRANSMISSION & COUNTERPARTS. Electronic transmission (including email and fax) of a
signed copy of this Listing Agreement and any addenda, and the retransmission of any signed electronic transmission,
shall be the same as delivery of an original. This Listing Agreement and any addenda may be executed in counterparts.
14.
DUE-ON-SALE. Certain types of transactions may trigger what is commonly referred to as a “due-on-sale”
clause. A “due-on-sale” clause typically states that the Seller’s lender or mortgagee may call the loan due and payable in
full if the Seller participates in certain types of transactions. These types of transactions may include, but are not limited
to, transactions where: (a) The sale of the property does not result in the underlying debt being paid in full; (b) The parties
enter into a seller-financed transaction; (c) A lease option agreement is entered into; or (d) Any other unauthorized
transfer of title to the Property has occurred without the lender’s consent. The Seller understands that if any underlying
encumbrances or mortgages on the Property contain a “due-on-sale clause,” and the “due-on-sale” clause is triggered,
the lender may call the entire unpaid balance of the loan immediately due.
15.
ENTIRE AGREEMENT. This Listing Agreement, including the Seller's Property Condition Disclosure form and the
Data Form, contain the entire agreement between the parties relating to the subject matter of this Listing Agreement. This
Listing Agreement may not be modified or amended except in writing signed by the parties hereto.
16.
EFFECTIVE DATE. This Listing Agreement is entered into and is effective as of the date: (a) The Seller and the
authorized Seller’s Agent or Broker have signed this Listing Agreement; and (b) The authorized Seller’s Agent or Broker
has received a mutually signed copy of this Listing Agreement (the “Effective Date”).
THE UNDERSIGNED hereby agree to the terms of this Listing Agreement.
___________________________________ ______________________________________________ _______
(Seller's Signature)
(Address/Phone)
(Date)
___________________________________ _____________________________________________ ________
(Seller's Signature)
(Address/Phone)
(Date)
ACCEPTED by the Company
by: _________________________________________ ________
(Signature of Authorized Seller's Agent or Broker)
(Date)
This form is COPYRIGHTED by the UTAH ASSOCIATION OF REALTORS® for use solely by its members. Any unauthorized use, modification,
copying or distribution without written consent is prohibited. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY
OF ANY PROVISION OF THIS FORM IN ANY SPECIFIC TRANSACTION. IF YOU DESIRE SPECIFIC LEGAL OR TAX ADVICE, CONSULT AN
APPROPRIATE PROFESSIONAL.
COPYRIGHT UTAH ASSOCIATION OF REALTORS - 1995 – REVISED 3.19.10 – ALL RIGHTS RESERVED
Page 3 of 3
Seller’s Initials [
] Date ______________________
UAR FORM 8
EXCLUSIVE BUYER-BROKER AGREEMENT & AGENCY DISCLOSURE
THIS IS A LEGALLY BINDING AGREEMENT - READ CAREFULLY BEFORE SIGNING
DESIGNATED AGENCY BROKERAGE
THIS EXCLUSIVE BUYER-BROKER AGREEMENT & AGENCY DISCLOSURE (“Exclusive Buyer-Broker Agreement”) is entered into
between ________________________________________ (the "Company") and ___________________________________ (the "Buyer").
1.
TERM OF AGREEMENT. The Buyer hereby retains the Company, including ____________________________________________
(the “Buyer’s Agent”) as the authorized agent for the Company, starting on the Effective Date as defined in section 15 below, and ending at
5:00 P.M. (Mountain Time) on the _____day of _______________, 20____, or the Closing of the acquisition of a property, which ever occurs
first (the “Initial Term”), to act as the exclusive Buyer’s Agent in locating and/or negotiating for the acquisition of a property: (a) In
_________________________ County, Utah; or (b) Located at ________________________________________________________
(property address). During the Initial Term of this Exclusive Buyer-Broker Agreement, and any extensions thereof, the Buyer agrees not to
enter into another buyer-broker agreement with another real estate agent or brokerage.
2.
BROKERAGE FEE. If, during the Initial Term, or any extension of the Initial Term, the Buyer, or any other person acting in the
Buyer’s behalf, acquires an interest in any real property as referenced in Section 1 above, the Buyer agrees to pay to the Company a
brokerage fee in the amount of $____________ or ______% of the acquisition price of the property (the “Brokerage Fee”). If the property
acquired by the Buyer is listed with a brokerage, the buyer agent commission (“BAC”) paid to the Company by the listing brokerage shall
satisfy the Buyer’s obligation for the Brokerage Fee shown above provided that the BAC is not less than the amount shown above. If the BAC
is less than the amount shown above, Buyer will pay the difference at Closing. If the property is not listed with a brokerage, in the absence of a
commission agreement with the owner of the selected property, the Brokerage Fee shown above shall be paid by the Buyer. Unless otherwise
agreed to in writing by the Buyer and the Company, the Brokerage Fee shown above shall be due and payable on: (a) If a purchase, the date
of recording of the Closing documents; (b) If a lease, the effective date of the lease; or (c) If an option, the date the option agreement is
signed. If the transaction is prevented by default of Buyer, the compensation shall be immediately payable to the Company.
3.
PROTECTION PERIOD. If within _______ months after the termination or expiration of this Exclusive Buyer-Broker Agreement,
Buyer or any person acting on the Buyer’s behalf, enters into an agreement to purchase, exchange, obtain an option on, or lease any property,
as referenced in Section 1 above, located for Buyer by Buyer’s Agent or the Company, or on which Buyer’s Agent negotiates in Buyer’s behalf
during the Initial Term, Buyer agrees to pay to the Company the Brokerage Fee referenced in Section 2.
4.
BUYER REPRESENTATIONS/DISCLOSURES. The Buyer warrants that the Buyer has not entered into any other Exclusive BuyerBroker Agreement with any other brokerage that is still in force and effect. The Buyer will: (a) In all communications with other real estate
agents, notify the agents in advance that the Buyer has entered into this Exclusive Buyer-Broker Agreement with the Company; (b) Furnish the
Buyer's Agent with relevant personal and financial information to facilitate the Buyer's ability to acquire a property; (c) Exercise care and
diligence in evaluating the physical and legal condition of the property selected by the Buyer; (d) Hold harmless the Company and the Buyer’s
Agent against any claims as the result of any injuries incurred while inspecting any property; (e) Upon signing of this Exclusive Buyer-Broker
Agreement, personally review and sign the Buyer Due Diligence Checklist form; and (f) Disclose to the Buyer's Agent all properties in which
the Buyer, as of the date of this Exclusive Buyer-Broker Agreement, is either negotiating to acquire or has a present interest in acquiring.
5.
AGENCY RELATIONSHIPS.
5.1
Duties of a Buyer’s Agent. By signing this Exclusive Buyer-Broker Agreement, the Buyer designates the Buyer’s Agent and
the Principal/Branch Broker for the Company (the “Broker”), as agents for the Buyer to locate properties as referenced in Section 1 above for
Buyer’s consideration and review. The Buyer authorizes the Buyer’s Agent or the Broker to appoint another agent in the Company to also
represent the Buyer in the event the Buyer’s Agent or the Broker will be unavailable to service the Buyer. As agents for the Buyer, the Buyer’s
Agent and Broker have fiduciary duties to the Buyer that include loyalty, obedience, full disclosure, confidentiality, reasonable care, and any
other duties required by law.
5.2
Duties of a Limited Agent. The Buyer understands that the Buyer’s Agent and the Broker may now, or in the future, be
agents for a seller who may have a property that the Buyer may wish to acquire. Then the Buyer’s Agent and the Broker may be acting as
Limited Agents - representing both the Buyer and the seller at the same time. A Limited Agent has fiduciary duties to both the Buyer and the
seller as required by law. However, some of those duties are “limited” because the agent cannot provide to both parties undivided loyalty,
confidentiality and disclosure. For this reason, the Limited Agent is bound by a further duty of neutrality. Being neutral, the Limited Agent may
not disclose to either party information likely to weaken the bargaining position of the other – for example, the highest price the Buyer will offer,
or the lowest price the seller will accept. However, the Limited Agent will be required to disclose information given to the agent in confidence by
the other party if failure to disclose such information would be a material misrepresentation regarding the Property or regarding the ability of
the parties to fulfill their obligations. The Buyer is advised that neither the Buyer nor the seller is required to accept a limited agency situation in
the Company, and each party is entitled to be represented by its own agent. In the event a limited agency situation arises, the Buyer’s Agent
and the Broker, as applicable, may only act as Limited Agents based upon a separate Limited Agency Consent Agreement signed by the seller
and Buyer.
6.
PROFESSIONAL ADVICE. The Company and the Buyer’s agent are trained in the marketing of real estate. Neither the Company nor
the Buyer’s Agent are trained or licensed to provide the Buyer with professional advice regarding the physical condition of any property or
regarding legal or tax matters. The Buyer is advised not to rely on the Company, or any agents of the Company, for a determination regarding
the physical or legal condition of the property, including, but not limited to: past or present compliance with zoning and building code
requirements; the condition of any appliances; the condition of heating/cooling, plumbing, and electrical fixtures and equipment; sewer
Page 1 of 2
Buyer’s Initials [
] Date_____________________
problems; moisture or other problems in the roof or foundation; the availability and location of utilities; the location of property lines; and the
exact square footage or acreage of the property. As part of any written offer to purchase a property, the Company strongly recommends that
the Buyer engage the services of appropriate professionals to conduct inspections, investigations, tests, surveys, and other evaluations of the
property at the Buyer’s expense. If the Buyer fails to do so, the Buyer is acting contrary to the advice of the Company.
7.
DISPUTE RESOLUTION. The parties agree that any dispute related to this Exclusive Buyer-Broker Agreement, arising prior to or
after the acquisition of a property, shall first be submitted to mediation through a mediation provider mutually agreed upon by the Buyer and
the Company. Each party agrees to bear its own costs of mediation. If mediation fails, the other remedies available under this Exclusive BuyerBroker Agreement shall apply.
8.
ATTORNEY FEES/GOVERNING LAW. Except as provided in Section 7, in case of the employment of an attorney in any matter
arising out of this Exclusive Buyer-Broker Agreement, the prevailing party shall be entitled to receive from the other party all costs and attorney
fees, whether the matter is resolved through court action or otherwise. If, through no fault of the Company, any litigation arises out of the
Buyer's employment of the Company under this Exclusive Buyer-Broker Agreement (whether before or after the acquisition of a property), the
Buyer agrees to indemnify the Company and the Buyer's Agent from all costs and attorney fees incurred by the Company and/or the Buyer's
Agent in pursuing and/or defending such action. This Exclusive Buyer-Broker Agreement shall be governed and construed in accordance with
the laws of the State of Utah.
9.
BUYER AUTHORIZATIONS. The Buyer authorizes the Company and/or Buyer’s Agent to: (a) Disclose after Closing to each MLS in
which the Company participates (consistent with the requirements of each such MLS), the final terms and sales price of the property acquired
by Buyer under the terms of this Agreement; and (b) Communicate with the Buyer for the purpose of soliciting real estate related goods and
services during and after the term of this Exclusive Buyer-Broker Agreement. The Buyer further agrees that in any transaction for the
acquisition of any property, as referenced in Section 1 above, the Earnest Money Deposit may be placed into an interest-bearing trust account
with interest paid to the Utah Association of Realtors Housing Opportunity Fund (UARHOF) to assist in creating affordable housing
throughout the state.
10.
ATTACHMENT. There [ ] ARE [
] ARE NOT additional terms contained in an Addendum attached to this Exclusive BuyerBroker Agreement. If an Addendum is attached, the terms of that Addendum are incorporated into this Exclusive Buyer-Broker Agreement by
this reference.
11.
EQUAL HOUSING OPPORTUNITY. The Buyer and the Company will comply with Federal, State, and local fair housing laws.
12.
ELECTRONIC TRANSMISSION & COUNTERPARTS. Electronic transmission (including email and fax) of a signed copy of this
Exclusive Buyer Broker-Agreement and any addenda, and the retransmission of any signed electronic transmission, shall be the same as
delivery of an original. This Exclusive Buyer-Broker Agreement and any addenda may be executed in counterparts.
13.
DUE-ON-SALE. Certain types of transactions may trigger what is commonly referred to as a “due-on-sale” clause. A “due-on-sale”
clause typically states that the seller’s lender or mortgagee may call the loan due and payable in full if the seller participates in certain types of
transactions. These types of transactions may include, but are not limited to, transactions where: (a) The sale of the property does not result in
the underlying debt being paid in full; (b) The parties enter into a seller-financed transaction; (c) A lease option agreement is entered into; or
(d) Any other unauthorized transfer of title to the Property has occurred without the lender’s consent. The Buyer understands that if any
underlying encumbrances or mortgages on the Property contain a “due-on-sale clause,” and the “due-on-sale” clause is triggered, the lender
may call the entire unpaid balance of the loan immediately due.
14.
ENTIRE AGREEMENT. This Exclusive Buyer-Broker Agreement, including the Buyer Due Diligence Checklist form, contains the
entire agreement between the parties relating to the subject matter of this Exclusive Buyer-Broker Agreement. This Exclusive Buyer-Broker
Agreement shall not be modified or amended except in writing signed by the parties hereto.
15.
EFFECTIVE DATE. This Exclusive Buyer-Broker Agreement is entered into and is effective as of the date: (a) The Buyer and the
authorized Buyer’s Agent or Broker have signed this Exclusive Buyer-Broker Agreement; and (b) The authorized Buyer’s Agent or Broker has
received a mutually signed copy of this Exclusive Buyer-Broker Agreement (the “Effective Date”).
THE UNDERSIGNED hereby accept the terms of this Exclusive Buyer-Broker Agreement.
_____________________________________
(Buyer's Signature)
_____________________________________________
(Address/Phone)
_________
(Date)
_____________________________________
(Buyer's Signature)
_____________________________________________
(Address/Phone)
_________
(Date)
ACCEPTED by the Company
by: _________________________________________
(Signature of Authorized Buyer’s Agent or Broker)
_________
(Date)
This form is COPYRIGHTED by the UTAH ASSOCIATION OF REALTORS® for use solely by its members. Any unauthorized use, modification,
copying or distribution without written consent is prohibited. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF ANY
PROVISION OF THIS FORM IN ANY SPECIFIC TRANSACTION. IF YOU DESIRE SPECIFIC LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE
PROFESSIONAL.
COPYRIGHT UTAH ASSOCIATION OF REALTORS - 1995 – REVISED 3.19.10 - ALL RIGHTS RESERVED
UAR FORM 6
Page 2 of 2
Buyer’s Initials [
] Date_____________________
LIMITED AGENCY CONSENT AGREEMENT
THIS IS A LEGALLY BINDING AGREEMENT - READ CAREFULLY BEFORE SIGNING
Name of Buyer(s):
Name of Seller(s):
.
Agent Representing Buyer:
Agent representing Seller:
.
Name of Brokerage:
(the “Company).
The Buyer and the Seller are both presently using the services of the Company in a possible real estate transaction
involving real property located at:_________________________________________(referred to below as the “Property”).
AS THE BUYER AND THE SELLER PROCEED WITH THIS TRANSACTION IT IS IMPORTANT THAT THEY EACH
UNDERSTAND THEIR PROFESSIONAL RELATIONSHIP WITH THE REAL ESTATE AGENT(S) AND WITH THE
COMPANY. WHAT FOLLOWS IS A BRIEF BUT VERY IMPORTANT EXPLANATION OF THE NATURE OF AGENCY
RELATIONSHIPS BETWEEN THE BUYER, THE SELLER, THE COMPANY, AND THE REAL ESTATE AGENTS
WORKING IN THIS TRANSACTION.
1.
Principal or Branch Broker. Every real estate agent must affiliate with a real estate broker. The broker is
referred to as a Principal Broker or a Branch Broker (if the brokerage has a branch office). The broker is responsible for
operation of the brokerage and for the professional conduct of all agents.
2.
Right of Agents to Represent Seller and/or Buyer. An agent may represent, through the brokerage, a seller
who wants to sell property or a buyer who wants to buy property. On occasion, an agent will represent both seller and
buyer in the same transaction. When an agent represents a seller, the agent is a “Seller’s Agent”; when representing a
buyer, the agent is a “Buyer’s Agent”; and when representing both seller and buyer, the agent is a “Limited Agent”.
3.
Seller’s Agent. A Seller’s Agent works to assist the seller in locating a buyer and in negotiating a transaction
suitable to the seller’s specific needs. A Seller’s Agent has fiduciary duties to the seller which include loyalty, full
disclosure, confidentiality, diligence, obedience, reasonable care, and holding safe monies entrusted to the agent.
4.
Buyer’s Agent. A Buyer’s Agent works to assist the buyer in locating and negotiating the acquisition of a
property suitable to that buyer’s specific needs. A Buyer’s Agent has the same fiduciary duties to the buyer that the
Seller’s Agent has to the Seller.
5.
Limited Agent. A Limited Agent represents both seller and buyer in the same transaction and works to assist in
negotiating a mutually acceptable transaction. A Limited Agent has fiduciary duties to both seller and buyer. However,
those duties are “limited” because the agent cannot provide to both parties undivided loyalty, full confidentiality and full
disclosure of all information known to the agent. For this reason, a Limited Agent must remain neutral in the
representation of a seller and buyer, and may not disclose to either party information likely to weaken the bargaining
position of the other; such as, the highest price the buyer will pay or the lowest price the seller will accept. A Limited
Agent must, however, disclose to both parties material information known to the Limited Agent regarding a defect in the
Property and/or the ability of each party to fulfill agreed upon obligations, and must disclose information given to the
Limited Agent in confidence, by either party, if the failure to disclose would be a material misrepresentation regarding the
Property.
6.
In-House Sale. If the buyer and the seller are both represented by one or more agents in the same brokerage,
that transaction is commonly referred to as an “In-House Sale”. Consequently, most In-House Sales involve limited
agency because seller and buyer are represented by the same brokerage.
7.
Conflicts with the In-House Sale. There are conflicts associated with an In-House Sale; for example, agents
affiliated with the same brokerage discuss with each other the needs of their respective buyers or sellers. Such
discussions could inadvertently compromise the confidentiality of information provided to those agents. For that reason,
the Company has policies designed to protect the confidentiality of discussions between agents and access to confidential
client and transaction files.
8.
Earnest Money Deposit. Buyer and Seller agree that although the Company is authorized to act as a Limited
Agent, Buyer and Seller authorize and direct the Principal Broker for the Company to hold and release the Earnest Money
Deposit in accordance with the terms and conditions of the real estate purchase contract, or other written agreement
entered into between the Buyer and the Seller.
Page 1 of 2
9.
Authorization for Limited Agency. The Seller and Buyer are advised that they are not required to accept a
limited agency situation in the Company and that Buyer and Seller are each entitled to be represented by their own agent.
However, it is the business practice of the Company to participate in In-House Sales. By signing this agreement, Buyer
and Seller consent to a limited agency within the Company as provided below: (Check Applicable Box):
[ ]
(name of Agent);
A. One Agent. The Buyer and the Seller consent to:
and the Principal/Branch Broker representing both the Buyer and the Seller as a Limited Agent as described
above.
[ ]
(Seller’s Agent)
B. Two Agents. The Buyer and the Seller consent to:
(Buyer’s Agent)continuing to
continuing to represent the Seller; and:
represent the Buyer; and the Principal/Branch Broker acting as a Limited Agent as described above.
____________________________________ ______________ ______________________________ ____________
(Buyer)
(Date)
(Seller)
(Date)
____________________________________ ______________ ______________________________ _____________
(Buyer)
(Date)
(Seller)
(Date)
ACCEPTED by the Company:
by:__________________________________________
(Signature of Authorized Agent or Broker)
____________
(Date)
This form is COPYRIGHTED by the UTAH ASSOCIATION OF REALTORS® for use solely by its members. Any unauthorized use, modification,
copying or distribution without written consent is prohibited. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY
OF ANY PROVISION OF THIS FORM IN ANY SPECIFIC TRANSACTION. IF YOU DESIRE SPECIFIC LEGAL OR TAX ADVICE, CONSULT AN
APPROPRIATE PROFESSIONAL.
COPYRIGHT UTAH ASSOCIATION OF REALTORS - REVISED – 3.19.10 - ALL RIGHTS RESERVED
Page 2 of 2
UAR FORM 7
SELLER’S PROPERTY CONDITION DISCLOSURE
This is a legally binding document. If not understood, consult an attorney.
LISTING AGENT – COMPLETE THIS SECTION ONLY!
SELLER NAME__________________________________________________________________________(“Seller”)
PROPERTY ADDRESS_________________________________________________________________ (“Property”)
LISTING BROKERAGE________________________________________________________________(“Company”)
NOTICE FROM COMPANY
Buyer and Seller are advised that the Company and its agents are trained in the marketing of real estate. Neither the Company nor its agents
are trained or licensed to provide Buyer or Seller with professional advice regarding the physical condition of any property or regarding legal or
tax matters. The Company and its agents strongly recommend that in connection with any offer to acquire the Property, Buyer retain the
professional services of legal and/or tax advisors, property inspectors, surveyors, and other professionals to satisfy Buyer as to any and all
aspects of the physical and legal condition of the Property. BUYER IS ADVISED NOT TO RELY ON THE COMPANY, OR ON ANY AGENTS
OF THE COMPANY, FOR A DETERMINATION REGARDING THE PHYSICAL OR LEGAL CONDITION OF THE PROPERTY, including, but
not limited to, legal uses of the Property, the condition of any appliances, heating/cooling equipment and systems, plumbing and electrical
fixtures and equipment, moisture or other problems in the roof or foundation, sewer problems, the availability and location of utilities, the exact
square footage or acreage of the Property, or the location of property lines.
INSTRUCTIONS TO SELLER
SELLER IS OBLIGATED UNDER LAW TO DISCLOSE TO BUYERS DEFECTS IN THE PROPERTY AND FACTS KNOWN TO SELLER
THAT MATERIALLY AND ADVERSELY AFFECT THE USE AND VALUE OF THE PROPERTY THAT CANNOT BE DISCOVERED BY A
REASONABLE INSPECTION BY AN ORDINARY PRUDENT BUYER. This disclosure form is designed to assist Seller in complying with
these disclosure requirements. Please thoroughly disclose your actual knowledge regarding the condition of the Property. The Company,
other real estate agents, and buyers will rely on this disclosure form.
 Complete the remainder of this form.
 Please be specific when describing any past or present problems, malfunctions or defects (location, nature of problem, etc.). Use an
additional addendum if necessary.
 If a question does not apply to your Property, WRITE “N/A” NEXT TO THE QUESTION.
1. OCCUPANCY
Does Seller currently occupy the Property? If “No”, when did you last occupy the Property? _____________ (Appox. Date)
Seller has never occupied the Property
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
2. USE OF PROPERTY
A.
Are you aware of any past or present non-conforming or illegal uses of the Property (such as renting the
Property in violation of local zoning laws, or renting the Property without a business license where such license
is required)? If “Yes”, please describe, to your knowledge, the nature of any such non-conforming or illegal use(s):
____________________________________________________________________________________________
B. Are you aware of any existing or threatened legal action affecting the Property? If “Yes”, please describe, to your
knowledge, the nature of any such legal action:_______________________________________________________
C. Are you aware of any past or present violations of any local, state, or federal law or regulation, or of any restrictive
covenants relating to the Property? If “Yes”, please describe, to your knowledge, the nature of any such violations:
______________________________________________________________________________
D. To your knowledge, is any portion of the Property presently assessed, for property tax purposes, as “Greenbelt”?
3. ROOF
A.
B.
Are you aware of any past or present leaks in the roof? If “Yes”, please describe, to your knowledge, the nature and
location of any past or present leaks:________________________________________________________________
Other than leaks, are you aware of any past or present problems or defects with the roof, for example, structural issues
dry rot, moisture and/or ice damage, etc? If “Yes”, please describe, to your knowledge, the nature and location of any
Page 1 of 5
Seller’s Initials _________________ Date____________________
Buyer’s Initials _________________ Date____________________
past or present problems or defects with the roof:_______________________________________________________
______________________________________________________________________________________________
C. Has all or any portion of the roof been repaired or replaced during your ownership? If “Yes”, please describe, to your
knowledge, the nature of any roof repairs or replacements:_______________________________________________
_____________________________________________________________________________________________
D. To your knowledge, are there any written warranties presently in place for the roof? If “Yes”, please attach copies of
any warranties in your possession.
Yes
No
Yes
No
Yes
No
4. NATURAL GAS, ELECTRICITY, TELEPHONE, CABLE TV
Are you aware of any past or present problems with utility service to the Property or with any of the utility service systems,
for example, poor telephone reception, etc? If “Yes”, please describe, to your knowledge, the nature of any past or present
problems with utility service or utility systems:_____________________________________________________________
5. WATER
Culinary water service for the Property is provided by (check applicable box): Public Water Private Water Company Private Well
A. (Name of Public or Private water service provider):___________________________________________. If water service
is provided by a Private Water Company, please attach a copy of any water certificates in your possession.
B. If water service is provided by a Private Water Company, to your knowledge, are water share assessments paid in full?
Yes No
C. Are you aware of any past or present problems with any water service provided to the Property by the Public or Private
Water service provider, for example, water quality, inadequate or excessive water pressure, etc? If “Yes”, please
Yes No
describe, to your knowledge, the nature of any such problems:_____________________________________________
D. Is a well presently located on the Property?
Yes No
E. If a well is located on the Property, are you aware of any past or present problems with the well, for example, water
quality, inadequate water pressure, faulty pump, etc? If “Yes”, please describe, to your knowledge, the nature of any
Yes No
such problems:__________________________________________________________________________________
F. To your knowledge, is your water right for the well represented by a contract with a special improvement or water
conservancy district? If “Yes”, what is the number of the district contract?____________________________________
Yes No
G. If your water right for the well is not based on a contract with a special improvement or water conservancy district,
to your knowledge, what is the State Engineer “Index Number” for your water right? ______-____________
6. SEWER/SEPTIC TANK
A. Sewer service for the Property will be provided by (check applicable box): Public Sewer Septic Tank
B. If Public Sewer, who is the Public Sewer provider?________________________________________________________
C. With the exception of an occasional clogged drain or toilet, are you aware of any past or present problems with the
sewer or septic service or components, for example, broken sewer lines, consistently slow or clogged drains, etc? If “Yes”,
please describe, to your knowledge, the nature of any such problems:_________________________________________
________________________________________________________________________________________________
D. If the Property is serviced by a septic tank, to your knowledge, has the tank been inspected and/or pumped within the
past five years?
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
7. HEATING/COOLING
Are you aware of any past or present problems with any of the heating or air-conditioning equipment, components
or systems, for example, baseboard-heating unit doesn’t work, inadequate forced air from specific vent, etc? If “Yes”,
please describe, to your knowledge, the nature of any such problems:___________________________________________
__________________________________________________________________________________________________
8. EQUIPMENT
Are you aware of any past or present problems with any of the following: air purifier, audio system, central vacuum, computer
network, fire sprinkling system, automatic garage door opener, humidifier, intercom, media system, satellite dish & components,
security system, smoke alarm, tv antenna, water heater, water purifier, water softener, range hood, attic vent fans, bathroom
vent fans, or propane tanks? If “Yes”, please describe, to your knowledge, the nature of any such problems, for example,
audio system doesn’t work, central vacuum doesn’t work, etc? __________________________________________________
9. APPLIANCES
Are you aware of any past or present problems with any of the following: dishwasher, disposal, dryer, freezer, indoor grill, microwave, oven, range, refrigerator, trash compactor, washer? If “Yes”, please describe, to your knowledge, the nature of any such
problems, for example, disposal doesn’t work, etc? ____________________________________________________________
Page 2 of 5
Seller’s Initials _________________ Date____________________
Buyer’s Initials _________________ Date____________________
10. FIREPLACES/STOVES
Are you aware of any past or present problems with any of the following: fireplace insert, gas fireplace, gas fireplace starter,
woodburning fireplace, potbelly/wood stove, or pellet stove? If “Yes”, please describe, to your knowledge, the nature of any
such problems, for example, gas fireplace starter doesn’t work, damper not working, etc?_______________________________
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
11. INTERIOR FEATURES
Are you aware of any past or present problems with any of the following: ceiling fans, dumb waiter, elevator, flooring (stone,
marble, hardwood, etc.), jetted bathtub(s), indoor pool, spa/hot tub, sauna, skylights, steam room/shower, or wet bar? If “Yes”,
please describe, to your knowledge, the nature of any such problems, for example, pump for jetted bathtub doesn’t work,
skylights leak, etc?___________________________________________________________________________
12. EXTERIOR & EXTERIOR FEATURES
A.
B.
Are you aware of any past or present problems with any of the following: gas barbeque, heated driveway or walkway,
lawn sprinkler system, pool, spa/hot tub, roof heat tape, or rain gutters? If “Yes”, please describe, to your knowledge,
the nature of any such problems, for example, spa/hot tub leaks, heated driveway only works on portion of driveway, etc?
_______________________________________________________________________________________________
With the exception of regular maintenance of the exterior surfaces of the Property (painting, staining, etc.), are you aware
of any past or present problems with any portion of the exterior, for example, moisture damage behind stucco, etc?
If “Yes”, please describe, to your knowledge, the nature of any such problems:_________________________________
13. TERMITES/DRY ROT/PESTS
A.
Are you aware of any past or present problems with termites, dry rot, rodents, or pests on or affecting the Property? If
“Yes”, please describe, to your knowledge, the nature and location of any such problems:_______________________
______________________________________________________________________________________________
B. Are you aware of any damage to the Property caused by termites, dry rot, rodents, or pests? If “Yes”, please describe,
to your knowledge, the nature and location of any such damage, and any efforts to mitigate such damage:__________
______________________________________________________________________________________________
C. To your knowledge, are there any written warranties or other termite or pest control coverage presently in place for the
Property? If “Yes”, please attach any copies of such warranties in your possession.
14. ADDITIONS/REMODELS
A.
B.
With the exception of cosmetic upgrades to the Property (such as carpet, paint, wallpaper, etc.), have you remodeled,
made any room additions, made structural modifications or other alterations or improvements to the Property? If “Yes”,
please describe, to your knowledge, the nature of any such remodel/alteration work:___________________________
______________________________________________________________________________________________
To your knowledge, did any former owners make any additions, structural changes, or other alterations to the Property?
If “Yes”, please describe, to your knowledge, the nature of any such remodel/alteration work:____________________
______________________________________________________________________________________________
15. STRUCTURAL ITEMS & SOILS
A.
Are you aware of any settlement or heaving of soil on the Property or on any adjoining Property (collapsible or expansive
soils, poorly compacted fill)? If “Yes”, please describe, to your knowledge, the nature and location of any settlement or
heaving of soil:__________________________________________________________________________________
B. Are you aware of any sliding or earth movement on the Property or on any adjoining Property (landslides, falling rocks,
debris or mud flows)? If “Yes”, please describe, to your knowledge, the nature and location of any sliding or earth
movement:______________________________________________________________________________________
C. Are you aware of any past or present movement, shifting, deterioration, or other problems with the walls or foundation?
If “Yes”, please describe, to your knowledge, the nature and location of any such shifting, problems, etc:____________
_______________________________________________________________________________________________
D. To your knowledge, does any portion of the Property contain any subsurface, man-made debris that has been buried,
covered or abandoned, including without limitation, any discarded or abandoned construction materials, concrete footings
or foundations, trash, etc? If “Yes”, please describe the nature and location of such subsurface debris:______________
________________________________________________________________________________________________
E. Please describe, to your knowledge, any action taken to repair or mitigate any of the issues described in 15A through 15D:
________________________________________________________________________________________________
F. Are you aware of any geologic, soils or engineering reports that have been prepared for the Property? If “Yes”, please
attach a copy of any such reports in your possession.
Page 3 of 5
Seller’s Initials _________________ Date____________________
Buyer’s Initials _________________ Date____________________
16. BOUNDARIES & EASEMENTS
A.
Do you know if anything on your Property (such as a fence, deck, or any other improvement) encroaches (extends)
onto any adjoining property? If “Yes”, please describe, to your knowledge, the nature and approximate location of any
such encroachment:______________________________________________________________________________
B. Do you know if anything on any adjoining property (such as a fence, deck, or any other improvements) encroaches
onto your Property? If “Yes”, please describe, to your knowledge, the nature and approximate location of any such
encroachment:__________________________________________________________________________________
C. Are you aware of any boundary disputes or conflicts involving your Property and any adjoining property or properties?
If “Yes”, please describe, to your knowledge, the nature of any such boundary disputes or conflicts: _______________
______________________________________________________________________________________________
D. Are you aware of any unrecorded easements affecting the Property? If “Yes”, please describe, to your knowledge, the
nature and approximate location of any such easements:________________________________________________
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
Yes
No
No
17. ELECTRICAL
Are you aware of any past or present problems with any electrical switches, outlets and/or any portion of the electrical
system? If “Yes”, please describe, to your knowledge, the nature of any such problems:___________________________
_________________________________________________________________________________________________
18. MOLD
A.
B.
With the exception of any occasional accumulation of mold and mildew in bathroom shower, tub and sink areas, are
you aware of any past or present mold on walls, ceilings, floors, or any other interior portion of the Property? If “Yes”,
please describe, to your knowledge, the nature and location of any such mold:_______________________________
Have you had the Property inspected for the existence of any mold? If “Yes”, please describe, to your knowledge,
the results of the inspection, and attach copies of any inspection reports in your possession:____________________
_____________________________________________________________________________________________
19. OTHER MOISTURE CONDITIONS
A.
In reference to the basement and/or crawlspace, are you aware of any past or present water leakage, water accumulation
or dampness? If “Yes”, please describe, to your knowledge, the nature of any such water leakage, accumulation or
dampness:____________________________________________________________________________________
B. Are you aware of any past or present water or moisture-related damage caused by: flooding; lot drainage; moisture
seepage or condensation; sewer overflow/backup; leaking or broken pipes, pipe fittings, or plumbing fixtures; or leaking
appliances, fixtures, or equipment? If “Yes”, please describe, to your knowledge, the nature and location of any such
water or moisture-related damage:_________________________________________________________________
C. Please describe, to your knowledge, any attempts to repair any moisture-related damage and/or to prevent any
recurrence of water and moisture-related problems on the Property:________________________________________
D. Are you aware of any wetlands located on the Property? If “Yes”, please describe, to your knowledge, the nature and
location of any wetlands on the Property:____________________________________________________________
E. Are you aware of any attempts to mitigate any wetland issues through the Army Corps of Engineers? If “Yes”, please
describe:______________________________________________________________________________________
20. HAZARDOUS CONDITIONS
A.
With the exception of methamphetamines (see Section 20.C below), are you aware of any past or present hazardous
conditions, substances, or materials on the Property, such as asbestos, lead-based paint, methane gas, radon gas,
radioactive or toxic materials, or ureaformaldehyde foam insulation, buried storage tanks and lines? If “Yes”, please
describe, to your knowledge, the nature of any such hazardous conditions:___________________________________
______________________________________________________________________________________________
B. Please describe, to your knowledge, any attempts to mitigate any such hazardous condition(s):___________________
______________________________________________________________________________________________
C. To your knowledge, is the Property currently contaminated from the use, storing or manufacturing of methamphetamines?
21. HOMEOWNERS ASSOCIATION
A. Is the Property part of a condominium or other homeowner’s association (HOA)?
B. Does the HOA levy dues or assessments for maintenance of common areas and/or other common expenses?
C. For questions regarding the HOA, including past, present or future dues or assessments, or regarding financial statements,
bylaws, HOA meetings and minutes, information may be obtained from the following:
(Name)____________________________________(Address)_____________________________________________
__________________________________________(Phone)______________________________________________
BY SIGNING THIS DISCLOSURE FORM, SELLER AUTHORIZES THE RELEASE OF HOA INFORMATION TO BUYER
AND/OR TO BUYER’S AGENT.
Page 4 of 5
Seller’s Initials _________________ Date____________________
Buyer’s Initials _________________ Date____________________
22. UNPAID ASSESSMENTS
A.
B.
Are you aware of any HOA, municipal, special improvement district or other assessments that are presently owing
against the Property? If “Yes”, please describe, to your knowledge, the nature and amount of any such unpaid
assessments:_____________________________________________________________________________________
Are you aware of any HOA, municipal, or special improvement district assessments that have been approved but
not yet levied against the Property? If “Yes”, please describe, to your knowledge, the nature and amount of any such
approved, but not yet levied, assessments:______________________________________________________________
Yes
No
Yes
No
Yes
No
Yes
No
23. INSURANCE
A.
B.
During your ownership of the Property, have you filed any insurance claims based on loss or damage to the Property? If
“Yes”, please describe, to your knowledge, the nature of any such claims:____________________________________
If the Property is part of a condominium or other homeowner’s association, do you know if the HOA has filed any
insurance claims for loss or damage to any portion of the development? If “Yes”, please describe, to your knowledge,
the nature of any such claims:_______________________________________________________________________
SQUARE FOOTAGE/ACREAGE
Seller represents that any figures provided by Seller in any documents regarding the square footage or acreage of the Property are not based on any
personal measurement by Seller. If the square footage or acreage of the Property is of material concern to Buyer, Buyer is advised to verify the square
footage or acreage through any independent sources or means deemed appropriate by Buyer. BUYER IS ADVISED NOT TO RELY ON SELLER, THE
COMPANY, OR ANY AGENTS OF THE COMPANY FOR A DETERMINATION REGARDING THE SQUARE FOOTAGE OR ACREAGE OF THE
PROPERTY.
VERIFICATION BY SELLER
Seller verifies that Seller has prepared this disclosure form and that the information contained herein is accurate and complete to the best of
Seller’s actual knowledge as of the date signed by Seller below. SELLER UNDERSTANDS AND AGREES THAT SELLER WILL UPDATE
THIS DISCLOSURE FORM IF ANY INFORMATION CONTAINED HEREIN BECOMES INACCURATE OR INCORRECT IN ANY WAY. Seller
authorizes the Company to provide copies of this disclosure form to prospective buyers, and to real estate brokers and agents. This disclosure
form is not a warranty of any kind. If Buyer and Seller enter into a sales contract for the Property, and such sales contract includes, excludes,
or warrants the condition of any item referenced herein, then to the extent there is a conflict between the sales contract and any
representations contained herein, the terms of the sales contract shall control.
Seller:__________________________ Date:________________
Seller:___________________________ Date:_________________
ACKNOWLEDGEMENT OF RECEIPT BY BUYER
Buyer’s signature below acknowledges Buyer’s receipt of a copy of this disclosure form.
Buyer:__________________________ Date:________________
Buyer:___________________________ Date:_________________
**********************************************************************
DISCLOSURE FORM UPDATE
The above disclosure form was reviewed and updated by Seller on the date signed by Seller below. (Check Applicable Boxes)
There are no changes in the above disclosure form; The above disclosure form has been changed as follows:____________________
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
and/or The above disclosure form has been changed as noted an attached Addendum No. ____ to this disclosure form.
Seller:__________________________ Date:________________
Seller:___________________________ Date:_________________
This form is COPYRIGHTED by the UTAH ASSOCIATION OF REALTORS® for use solely by its members. Any unauthorized use, modification,
copying or distribution without written consent is prohibited. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF
ANY PROVISION OF THIS FORM IN ANY SPECIFIC TRANSACTION. IF YOU DESIRE SPECIFIC LEGAL OR TAX ADVICE, CONSULT AN
APPROPRIATE PROFESSIONAL.
COPYRIGHT© UTAH ASSOCIATION OF REALTORS® 1994 - REVISED – 12.01.07 – ALL RIGHTS RESERVED
Page 5 of 5
Seller’s Initials _________________ Date____________________
UAR FORM 10
Buyer’s Initials _________________ Date____________________
CHAPTER 2
UTAH STATUTE OF FRAUDS RE: BROKERS
Utah Code Ann. § 25-5-4(1)(e). "The following agreements are void unless the agreement, or
some note or memorandum of the agreement, is in writing, signed by the party to be charged
with the agreement:
....
(e) every agreement authorizing or employing an agent or broker to purchase or sell
real estate for compensation..."
Utah Statute of Frauds re brokers.doc
Page 1
CHAPTER 2
Echo NEY, Trustee, Wasatch Homes, Inc., a corporation, Plaintiff and Appellant, v.
G. T. HARRISON and Alda J. Harrison, Defendants and Respondents
No. 8437
Supreme Court of Utah
5 Utah 2d 217; 299 P.2d 1114; 1956 Utah LEXIS 197
July 3, 1956
DISPOSITION:
[***1] Remanded with instructions
to enter judgment for broker's assignee as to commission
and to allow such further proceedings as court might
deem proper in respect to claimed set-off.
COUNSEL: Gordon I. Hyde, Salt Lake City, for appellant.
Sumner J. Hatch, James L. Barker, Jr., and E. W. Clyde,
Salt Lake City, for respondents.
JUDGES: Crockett, Justice. McDonough, C.J., and
Wade, and Worthen, JJ., concur. Henriod, Justice.
OPINION BY: CROCKETT
OPINION
[*218] [**1115] This action was brought to recover a commission of 2 1/2% claimed due for selling
the Snow Apartments in Salt Lake for G.T. and Alda
Harrison, the defendants. Plaintiff is the assignee of
creditors of Wasatch Homes, Inc., a licensed real estate
broker who sold the apartments. Alda failed to answer
the complaint and a default judgment was entered against
her. The trial court later relieved her default. Both of the
Harrisons then defended on the merits, and judgment
went against plaintiff on the theory that the Harrisons
had never entered into any written agreement employing
Wasatch Homes, and therefore the contract was unenforceable because of our Statute of Frauds, later referred
to.
The issues raised on appeal are whether [***2] defendant Alda was properly relieved of default, and
whether there existed a sufficient note or memorandum
in writing between Wasatch Homes and the Harrisons to
satisfy the Statute of Frauds.
[HN1] Rule 60(b) of the Utah Rules of Civil Procedure lists the instances in which a court may, in the furtherance of justice, open a judgment obtained by default.
Six specific categories are set forth: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud; (4) summons not personally
served upon a defendant and defendant has failed to appear; (5) void judgment; (6) satisfaction, release or discharge of judgment, or reversal or vacation of the prior
judgment upon which the default was based. In addition,
subsection (7) permits the judgment to be opened for
"any other reason [*219] justifying relief from the operation of [**1116] the judgment." Relief upon the first
four grounds must be sought within three months from
entry of the judgment; and upon the others "within a reasonable time". Defendant Alda did not request relief
until nearly 11 months had elapsed, and hence the only
applicable section of Rule 60(b) upon which she could
rely was (7).
[***3] Alda's motion was supported by an affidavit
in which the major ground for relief was that she had
mistakenly believed that she was fully protected by a
divorce decree ordering her ex-husband, G. T. Harrison,
to pay any real estate commissions arising from the sale
of the Snow Apartments.
Plaintiff urges that this type of mistake is a mistake
of law and not within the purview of Rule 60(b), and
argues that if relief be justified in this type of case, it will
destroy the firmly established policy that judgments
Page 2
5 Utah 2d 217, *; 299 P.2d 1114, **;
1956 Utah LEXIS 197, ***
should be final so that confidence can be reposed in
them. Plaintiff points out that Rule 60(b) is in derogation
of the common law rule that all judgments become final
after the close of the term, and places reliance on the rule
that statutes in derogation of the common law must be
strictly construed. We are aware of such a rule but it has
no application in the law of this state.
Our civil code expressly provides:
1
[HN2] "The rule of the common law that
statutes in derogation thereof are to be
strictly construed has no application to
the statutes of this state. The statutes establish the laws of this state respecting the
subjects to which they relate, and their
provisions [***4] and all proceedings
under them are to be liberally construed
with a view to effect the objects of the
statutes and to promote justice. Whenever
there is any variance between the rules of
equity and the rules of common law in
reference to the same matter the rules of
equity shall prevail." (Emphasis added.)
1.
Section 68-3-2, U.C.A.1953.
The statutory authority 2 of trial courts to set aside
judgments obtained by default has been liberally construed to the end that there be trial on the merits, beginning with our earliest decisions. 3 In the recent case of
Warren v. Dixon Ranch Co., 4 we had occasion to review
the policy considerations and reaffirmed the attitude of
liberal construction, thus:
"The allowance of a vacation of judgment is a creature of equity designed
[*220] to relieve against harshness of enforcing a judgment, which may occur
through procedural difficulties, the
wrongs of the opposing party, or misfortunes which prevent the presentation of a
claim or defense. * * * [HN3] Equity
[***5] considers factors which may be irrelevant in actions at law, such as the * *
* hardship in granting or denying relief.
Although an equity court no longer has
complete discretion in granting or denying
relief it may exercise wide judicial discretion in weighing the factors of fairness
and public convenience, and this court on
appeal will reverse the trial court only
where an abuse of this discretion is clearly
shown."
2.
Rule 60(b) is substantially the same as former
Section
104-14-4,
U.C.A.1943;
Rev.Stat.1898, ß 3005; 2 Comp.Laws 1888, ß
3200; Comp.Laws 1876, ß 1293, p. 417.
3.
E. g., Utah Commercial & Savings Bank v.
Trumbo, 17 Utah 198, 53 P. 1033.
4. Utah, 260 P.2d 741, 742.
The trial court could well regard this as among the
class of cases that Rule 60(b) (7) was intended to govern
and to permit Alda to justify her failure to answer on the
ground that the divorce decree required her husband to
bear the obligation and required him to defend the action
for her.
In reaching this conclusion [***6] we are not unmindful of the various authorities adverted to by counsel
for plaintiff, but find them distinguishable either upon
their facts, 5 or upon the practice act of the state
[**1117] involved. 6 The Utah decisions relied upon by
plaintiff recognize the firmly established principle that
[HN4] it is largely within the discretion of the trial court
whether a default should be relieved, 7 which discretion
will not be disturbed unless there is a patent abuse
thereof.
5.
E. g., Weinberger v. Manning, 50 Cal. App.
2d 494, 123 P.2d 531 (Defendant refused to hire
counsel although she had been advised to do so
and had general experience with lawyers. Entire
conduct showed contemptuous disregard of legal
process.)
6. E. g., Ross v. San Diego Glazed Pipe Co., 50
Cal. App. 170, 194 P. 1059; Durbrow v. Chesley,
24 Cal. App. 416, 141 P. 631.
7. Warren v. Dixon Ranch Co., Utah, 123 Utah
416, 260 P.2d 741; Peterson v. Crosier, 29 Utah
235, 81 P. 860.
The more serious issue is whether the defendants are
[***7] bound to pay a brokerage commission to plaintiff. There is ample evidence that the defendants orally
agreed to employ Wasatch Homes, Inc., as brokers, and
to pay them for effecting the sale. However, defendants
have pleaded that the contract is unenforceable because
of [HN5] Section 25-5-4, U.C.A.1953, which provides:
"In the following cases every agreement
shall be void unless such agreement, or
some note or memorandum thereof, is in
Page 3
5 Utah 2d 217, *; 299 P.2d 1114, **;
1956 Utah LEXIS 197, ***
writing subscribed by the party to be
charged therewith:
******
"(5) Every agreement authorizing or
employing an agent or broker to purchase
or sell real estate for compensation."
The Harrisons did not sign a listing agreement. Alda
testified that she requested Wasatch Homes to help her in
obtaining a purchaser for the Snow Apartments [*221]
but she did not sign any written listing because the Harrisons were experiencing marital troubles and she was
having trouble getting G. T. Harrison to cooperate. Pursuant to her request, Wasatch Homes did secure prospective purchasers and obtained their signatures on an earnest money receipt. Alda then told Wasatch's salesman
to go to Helper, Utah to get the signature of her husband,
G. T. [***8] Harrison, which they did. The earnest
money receipt and offer to purchase contained the following paragraph:
"The seller agrees in consideration of
the efforts of the agent in procuring a purchaser, to pay said agent a commission
equal to the minimum recommended by
the Salt Lake Real Estate Board. In the
event seller has entered into a listing contract with any other agent and said contract is presently effective, this paragraph
will be of no force and effect."
A discussion was had concerning the commission, which
is usually 5% on such transactions. Harrison refused to
sign, stating that he would not pay more than 2 1/2%.
Pursuant to such conversation, the salesman inserted the
following handwritten notation beneath the paragraph
just quoted above:
"Wasatch homes is to receive a commission of 2 1/2% which is Total Commission."
G. T. Harrison then signed immediately below this notation. The salesman returned to Salt Lake City, obtained
Alda's signature and the transaction was consummated.
The trial court found that the writings above set out
were not sufficient to satisfy the requirements of the
Statute of Frauds, apparently on the basis of the case of
[***9] Smith Realty Co. v. Dipietro. 8 However, analy-
sis of that case will indicate a substantial difference in
the relationship of the broker to the parties. That case
also involved an action to recover commission on the
exchange of certain properties. The following clause
was included in their agreement:
8.
77 Utah 176, 292 P. 915, 916.
"'The respective parties hereto
agree to pay the [realtor], the authorized
broker for effecting the sale and exchange
of properties the commissions as follows:
The sellers agree to pay a commission in
the sum of Five Hundred Dollars and the
buyer agrees to pay a commission in the
sum of Three Hundred Thirty-three and
33/100 * * * [**1118] Dollars. Said
commissions payable to the [realtor] at
their [address given]. * * *'"
The broker neither pleaded nor proved any contract expressly employing him in writing or otherwise, but relied
on the recital pertaining to the payment of a brokerage
fee. The court regarded the recital as [*222] merely
incidental [***10] to the contract and therefore ruled
that it conferred no rights on the broker; and accordingly
that it could not be construed as a memorandum in writing employing the broker to satisfy the Statute of Frauds
in the broker's behalf, with which we do not disagree.
We are cognizant that decisions of courts have varied widely as to the sufficiency of writings which will
suffice to meet the Statute of Frauds. Many of the decisions are explainable on the basis of substantial differences in the statutory provisions and terminologies, and
in factual distinctions. But the explanation of other decisions lies only in which of the two policies implicit in the
statute the particular court felt was paramount: The protection of the landowner from the imposition of spurious
claims by real estate brokers, or the necessity of protecting the broker, who has rendered a bona fide service,
from being refused just compensation for his work by the
landowner. 9
9.
See Annotations, 80 A.L.R. 1456, 1457; 65
A.L.R. 1423.
In assaying [***11] whether the particular writing
meets the requirements of our statute, the problem is
considerably simplified if we carefully observe that
[HN6] our statute, unlike that of many states, 10 does not
call for the contract itself to be in writing; it is enough if
there is "some note or memorandum thereof" which evidences the contract. The instant case appears to come
Page 4
5 Utah 2d 217, *; 299 P.2d 1114, **;
1956 Utah LEXIS 197, ***
within the doctrine of Hawaiian Equipment Co. Ltd. v.
Eimco Corp., 11 which approved the rule of the Restatement of Contracts: 12
10.
See 2 Williston, Contracts, Sec. 579 n. 6
and authorities there cited.
11. 115 Utah 590, 207 P.2d 794, 797.
12. Rest. Contracts, Sec. 207.
[HN7] "'A memorandum, in order
to make enforceable a contract within the
Statute, may be any document or writing,
formal or informal, signed by the party to
be charged * * * which states with reasonable certainty,
"'(a) each party to the contract either
by his own name, or by such a description
as will serve to identify him, * * * and
"'(b) the land, goods or other subjectmatter [***12] to which the contract relates, and
"'(c) the terms and conditions of all
the promises constituting the contract and
by whom and to whom the promises are
made.'"
It will be noted that here the agreement identified
the parties, the subject matter, [*223] and set out the
conditions of the transaction with adequate certainty to
meet the above requirements. Consequently, the memorandum evidencing the obligation of the Harrisons to pay
the 2 1/2% commission was sufficient to satisfy our statute. We reach this result on the facts here presented
notwithstanding anything that may have been said in the
Depietro case, supra.
At the trial defendants offered to show certain setoffs against the plaintiffs. The trial court's decision that
there was no enforceable contract made it unnecessary to
try these issues and no findings were made on such
claims. The case is remanded with instructions to enter
judgment for the plaintiffs as to the commission and to
allow such further proceedings as the court may deem
proper in respect to the claimed set-offs.
Costs to appellants.
DISSENT BY: HENRIOD
DISSENT
HENRIOD, Justice.
I dissent. It seems to me that the main opinion has
assumed a false premise: [***13] That plaintiff seeks
recovery on an oral contract [**1119] which admittedly
was unenforceable under the Statute of Frauds, but for a
written memorandum which took it out of that statute.
The plaintiff did not seek recovery on that theory, but
alleged a written contract between the Neys and Harrisons, in which the latter expressly agreed to pay a real
estate commission to the broker. The plaintiff set forth
the agreement and pleaded that "the defendants have
failed and refused to pay the commission provided for in
said agreement." The plaintiff did not claim to be a party
to that agreement, and as a matter of fact, was not a party
thereto. No effort was made to amend the pleading mentioned. This case comes to us simply as a case where A
agreed with B that he would pay C a commission. Such
an agreement is not enforceable by C unless it has the
elements of a contract for the benefit of a third party, -either the donee beneficiary type or the creditor beneficiary type. There is no donee beneficiary type here since
there is no indication that anyone intended the Harrisons
to make a gift, and there is no creditor beneficiary type
here since there is no indication [***14] whatever that
Harrisons' promise was made to satisfy any obligation or
claim that the broker might have had against the Neys.
This court in a unanimous decision has rejected the
idea that a broker could enforce such a promise made
between two [*224] other persons to a contract where
he was not a party, and has gone so far as to say such a
contract cannot be treated even as a memorandum for the
purpose of taking an oral real estate broker's employment
contract out of the Statute of Frauds. 1 That case is based
on sound principles and should not be treated lightly or
reversed, as the main opinion in effect has done. The
rule that the majority opinion is laying down will emasculate the Statute of Frauds relating to brokers' employment contracts, which, after this case, may be wholly
oral if the reference, for many years customarily inserted
in earnest money agreements, is made with respect to
payment of a real estate commission, -- a reference found
in a contract between others in which the broker is not a
party, and found in a contract whose terms the broker
could not enforce. The rule laid down by the main opinion, I am convinced, violates fundamental principles of
contracts. [***15] I earnestly urge that we do not have
to decide this case, nor can we justify the main opinion,
on the basis of an oral contract buttressed by a written
memorandum, but can decide it simply on the basis of
failure of pleading and proof, as we did in Taylor v. E.
M. Royle Corp., 2 a case about which the main opinion
casts doubt.
1.
2.
Dipietro case cited in main opinion.
1 Utah 2d 175, 264 P.2d 279
Page 1
CHAPTER 2
Franklin D. RICHARDS and M. Ross Richards, dba Richards & Richards, Plaintiffs
and Respondents, v. William M. HODSON and Rose B. Hodson, Defendants and
Appellants
No. 12338
Supreme Court of Utah
26 Utah 2d 113; 485 P.2d 1044; 1971 Utah LEXIS 667
June 3, 1971
DISPOSITION:
[***1] Judgment reversed in part
and affirmed in part except as to award of attorney's fees.
COUNSEL: Lon Rodney Kump, of Richards & Watkins, Salt Lake City, for defendants and appellants.
breach of contract. 1 That judgment had become final
before this action was tried. The trial court in the instant
matter ruled that the issue of whether there had been an
enforceable contract was res judicata, and [**1046] that
ruling is now assailed by the defendants herein.
M. Richard Walker, of Hunt & Walker, Salt Lake City,
for plaintiffs and respondents.
1 Holbrook v. Hodson, 24 Utah 2d 120, 466
P.2d 843 (1970).
JUDGES: Ellett, Justice. Callister, C. J., and Tuckett
and Henriod, JJ., concur. Crockett, Justice (concurring
specially). Henriod, Justice (concurring).
OPINION BY: ELLETT
OPINION
[*115] [**1045] The plaintiffs, real estate brokers, had a listing signed by Mr. Hodson whereby he
promised to pay them a commission of 6% of the sale
price of some real estate jointly owned by him and his
wife if the plaintiffs found a purchaser who was ready,
willing, and able to buy. This action is against both Mr.
and Mrs. Hodson for a commission claimed to have been
earned, together with an attorney's fee.
[HN1] Strictly speaking, the term "res judicata" applies to a judgment between the same parties who in a
prior action litigated the identical questions which are
present in the later case. Not only are the parties bound
by the ruling on matters actually litigated, but they are
also prevented from raising issues which should have
been raised in the former action. The rule of law is wise
in that it gives finality to judgments and also conserves
the time of courts, in that courts should not be required to
relitigate matters which have once been fully and finally
determined.
The defendants deny that any enforceable contract
of sale was entered into and also claim misconduct and
false representations on the part of plaintiffs' agent, who
induced them to accept an earnest money contract of
purchase.
Since the plaintiffs herein were not parties to the
former action between [***3] defendants herein and the
purchasers, they would not be bound by any ruling made
against the purchasers in the former case. The reason is
that the plaintiffs herein did not there have an opportunity to prove their claim. The defendants here were parties to the prior action and litigated fully their claim that
there was no contract of sale. They have had their day in
court. They have tried that issue fully and now attempt
to retry it.
These defendants refused to make conveyance of the
real property and were sued by the purchasers, who recovered [***2] a monetary judgment against them for
[HN2] A form of res judicata applies to situations
like this wherein issues which are actually decided
against a party in a prior action may be relied upon by an
Page 2
26 Utah 2d 113, *; 485 P.2d 1044, **;
1971 Utah LEXIS 667, ***
opponent [*116] in a later case as having been judicially established. This doctrine, known as collateral
estoppel, differs from res judicata not only in the fact that
all parties need not be the same in the two actions, but
also in the fact that the estoppel applies only to issues
actually litigated and not to those which could have been
determined. The trend of recent cases is to approve this
doctrine. 2
2 Teitelbaum Furs, Inc., v. Dominion Ins. Co.,
58 Cal.2d 601, 25 Cal.Rptr. 559, 375 P.2d 439
(1962); see cases collected in Words and Phrases,
Vol. 7A, Pocket Part, under the heading of "Collateral Estoppel."
[***4] We think the trial judge correctly held that
the validity of the sale had already been established and
that no proof needed to be given on that point in the trial
of the instant matter.
The judgment herein was based upon findings of
fact which were later amended, and in the final findings
no reference is made as to the need for awarding attorney's fees or as to the amount thereof. That amendment
properly reflected the true situation, for there was nothing in the record upon which the amount of such fees
could be predicated. The plaintiffs claim that the matter
was settled at a pretrial conference, but there is no pretrial order in the record before us. This court has on numerous occasions held that [HN3] attorney's fees cannot
be allowed unless there is evidence to support them. 3
Since there is no evidence of the reasonableness of attorney's fees in the record, the court erroneously awarded
the amount of $ 1,819.83 as such.
3 Butler v. Butler, 23 Utah 2d 259, 261, 461
P.2d 727 (1969); F. M. A. Financial Corp. v.
Build, Inc., 17 Utah 2d 80, 404 P.2d 670 (1965).
[***5] The court further awarded judgment of $
9,000.00 against both Mr. and Mrs. Hodson. The wife
did not sign the listing agreement and did not make any
prior oral promise to pay a commission. In fact, when
the plaintiffs' agent talked to her, he had already done
everything required to be done except secure her signature, and it is obvious that in securing her name to the
contract he was representing the purchasers and her husband rather than her.
The plaintiffs rely on the document entitled "Earnest
Money Receipt and Offer to Purchase," which is an
agreement between sellers and purchasers. They are not
parties to the contract. Their sole responsibility is to
bring the parties together. Yet in the printed form of the
contract they furnished to the parties they inserted a provision which reads as follows:
The seller agrees in consideration of the
efforts of the agent in procuring a purchaser, to pay said agent a commission
equal to the minimum recommended
[**1047] by the Salt Lake Board of Realtors. In [*117] the event seller has entered into a listing contract with any other
agent and said contract is presently effective, this paragraph will be of no force or
effect.
[***6] This court held in the case of Ney v. Harrison, 5
Utah 2d 217, 299 P.2d 1114 (1956), that such a provision did furnish the "note or memorandum" sufficient to
permit proof of an oral contract theretofore made. However, in the instant case Mrs. Hodson had made no promise to the plaintiffs, oral or otherwise. In order for the
plaintiffs to recover against her, they must prove an express agreement by her to pay them a commission for
services to be rendered after the promise is made; otherwise there would be no consideration to support the
agreement. 4
4 Smith Realty Co. v. Dipietro et ux., 77 Utah
176, 292 P. 915 (1930).
The judgment in the amount of the commission cannot stand against Mrs. Hodson.
We have examined the other assignments of error
and find them to be without merit. The trial court had
competent evidence to sustain his findings and judgment
except as above noted. The judgment is reversed as to
Mrs. Hodson in toto and is affirmed as to Mr. Hodson
except as to the award of attorney's fees, and [***7] the
trial court is directed to delete from the judgment against
him the sum of $ 1,819.83. Each party is to bear his own
costs in connection with this appeal.
CONCUR BY: CROCKETT; HENRIOD
CONCUR
CROCKETT, Justice (concurring specially).
I concur in the decision under the facts of this case
including application of the doctrine of collateral estoppel thereto. However, as to that doctrine, I prefer to reserve commitment in generality. While I agree to its
application under the facts here, I also believe that there
may be circumstances where justice would require that a
party be permitted to litigate an issue in a new and different lawsuit with different parties, even though such an
issue may have been once adjudicated between himself
and others. Thus, the proper application of the doctrine
Page 3
26 Utah 2d 113, *; 485 P.2d 1044, **;
1971 Utah LEXIS 667, ***
should depend upon what the ends of justice require in
the circumstances of the particular case.
HENRIOD, Justice (concurring).
I concur, but wish to make the observation that
plaintiff's complaint is bottomed on a sales agency contract signed only by Mr. Hodson, not Mrs. Hodson. To
attempt to bind Mrs. Hodson to such contract by referring to some other contract between the sellers and buyers, in [***8] my opinion, would be to compound an
error that I believe we indulged in Ney v. Harrison, 5
Utah 2d 217, 299 P.2d 1114 (1956), where in a dissent, I
unsuccessfully attempted to [*118] point out the distinction in the two different contracts as they related to
the statute of frauds. Since that case was referred to and
discussed here, I take the liberty of at least suggesting
that it might be opportune in the instant case to take a
second look at that case with an eye for its renunciation.
Page 1
CHAPTER 2
Fairbourn Commercial, Inc., a Utah corporation, Plaintiff and Respondent, v.
American Housing Partners, Inc., a Delaware corporation, Defendant and Petitioner.
No. 20030377
SUPREME COURT OF UTAH
2004 UT 54; 94 P.3d 292; 203 Utah Adv. Rep. 33; 2004 Utah LEXIS 122
July 2, 2004, Filed
SUBSEQUENT HISTORY:
Publication July 29, 2004.
[***1] Released for
PRIOR HISTORY: On Certiorari to the Utah Court
of Appeals. Third District, Salt Lake. The Honorable
Ronald E. Nehring
Fairbourn Commer., Inc. v. Am. Hous. Partners, Inc., 68
P.3d 1038, 2003 UT App 98, 2003 Utah App. LEXIS 36
(2003)
DISPOSITION:
Affirmed.
fitness as a buyer was not made a condition to payment
of the commission. The language that the commissions
were due and payable at closing was not conditional,
requiring a closing to occur before the commissions were
owed; rather, it was a timing clause. Because a purchase
contract was separate from the listing agreement, the
financial capability clause contained in the purchase contract did not affect the listing agreement.
OUTCOME: The court affirmed the decision of the
court of appeals, finding that the broker was due its
commission from the seller.
CASE SUMMARY:
COUNSEL: Neil R. Sabin, Salt Lake City, for plaintiff.
PROCEDURAL POSTURE: Plaintiff real estate brokerage brought suit against defendant developer to recover a commission. The trial court found that the developer breached the listing agreement and awarded the
brokerage its commission plus attorney fees and costs.
The developer appealed. The Utah Court of Appeals affirmed the trial court's judgment. The developer again
appealed.
OVERVIEW: The listing agreement provided that, if
the brokerage procured an offer to purchase from a buyer
on specified terms, the developer would pay a specified
commission. The agreement also provided that "all
commissions shall be due and payable at closing." The
brokerage found a buyer, but the developer rejected the
contract and found another buyer. The developer argued
that the buyer did not have sufficient financial capability
to consummate the purchase. The court found that, under
the plain language of the listing agreement, the buyer's
Dennis K. Poole, John L. Adams, Salt Lake City, for
defendant.
JUDGES: WILKINS, Associate Chief Justice. Chief
Justice Durham, Justice Durrant, Justice Parrish, and
Judge Jones concur in Associate Chief Justice Wilkins'
opinion. Having disqualified himself, Justice Nehring
does not participate herein; District Judge Ernest W.
Jones sat.
OPINION BY: WILKINS
OPINION
[**293] WILKINS, Associate Chief Justice:
[*P1] Defendant American Housing Partners, Inc.
challenges the court of appeals' decision affirming the
trial court's judgment in favor of plaintiff Fairbourn
Page 2
2004 UT 54, *; 94 P.3d 292, **;
203 Utah Adv. Rep. 33; 2004 Utah LEXIS 122, ***
Commercial, Inc., which awarded Fairbourn a real estate
commission of $ 153,000 for American's breach of a
single party listing and sale agreement. We affirm.
FACTUAL AND PROCEDURAL HISTORY
[*P2] In August 1999, American, an experienced
real estate developer, entered into a single party listing
and sale agreement with Fairbourn, a real estate brokerage, for the sale of [***2] ninety- nine undeveloped lots
located in West Jordan (the "property"). The listing
agreement identified the prospective buyer as Rochelle
Properties, LC. According to the listing agreement, if
Fairbourn procured an offer from Rochelle, and if
American accepted the terms of the offer, American
would pay Fairbourn a commission of $ 1,500 per lot.
The agreement also stipulated that "[all commissions]
shall be due and payable at closing." In addition, the
agreement specified a sale price of $ 2,277,000 for the
property.
[*P3] After some negotiation, Rochelle and American eventually agreed to terms for the sale of the property. One clause of the purchase contract between Rochelle and American required Rochelle to demonstrate
"financial capability to close" on the sale of the property
within fourteen days from execution of the purchase contract. Pursuant to this clause, Rochelle submitted two
different letters from First Security Bank attesting to
Rochelle's financial capability. However, American rejected the bank's assurances and cancelled the contract
without further explanation. American later sold the
property to another buyer at a higher price and did not
pay a commission to [***3] Fairbourn for procuring an
offer from Rochelle.
[*P4] Fairbourn sued American to recover the
commission to which it believed it was entitled. The trial
court found that American breached the listing agreement and awarded Fairbourn its commission plus attorney fees and costs. American appealed, challenging the
trial court's determination that the terms of the purchase
contract were ambiguous, the court's taking of extrinsic
evidence, and its factual findings based on the evidence
submitted. Fairbourn Commercial, Inc. v. Am. Hous.
Partners, Inc., 2003 UT App 98, P 14, 68 P.3d 1038.
American also argued that the listing agreement did not
entitle Fairbourn to a commission until the closing of the
Rochelle sale, which [**294] never occurred. The court
of appeals disagreed with American on this point and
affirmed the trial court's judgment. It concluded that the
listing agreement entitled Fairbourn to a commission
when American accepted an offer from Rochelle and
further noted that the existence of "due and payable at
closing" language generally does not create a condition
precedent to receipt of a commission. The court of ap-
peals' decision on this ground dispensed with its [***4]
need to consider American's other arguments on appeal.
[*P5] On certiorari, American argues that the court
of appeals erred when it concluded that the "due and
payable at closing" language did not require consummation of the transaction before Fairbourn was entitled to its
commission. Alternatively, it argues that the phrase "due
and payable at closing" is ambiguous because it could
reasonably be interpreted to mean that payment of the
commission was conditioned upon closing of the transaction.
ANALYSIS
I. STANDARD OF REVIEW
[*P6] [HN1] On certiorari, we review the court of
appeals' decision and not the trial court's. State ex rel.
M.W., 2000 UT 79, P 8, 12 P.3d 80. In addition, [HN2]
"questions of contract interpretation not requiring resort
to extrinsic evidence" are matters of law, which we review for correctness. Zions First Nat'l Bank, N.A. v. Nat'l
Am. Title Ins. Co., 749 P.2d 651, 653 (Utah 1988).
II. BROKERAGE COMMISSION RULES
[*P7] The first issue American raises on certiorari
is whether the court of appeals erred in adopting a general rule that the phrase "at closing," by itself, is not a
condition precedent to a broker's receipt [***5] of commission. Although not dispositive in this case, [HN3] the
general rule in Utah is that a real estate broker is entitled
to its commission when it has procured a buyer who is
"ready, willing and able and who is accepted by the
seller." Bushnell Real Estate, Inc. v. Nielson, 672 P.2d
746, 751 (Utah 1983). American urges us to discard this
rule in favor of the rule first enunciated in Ellsworth
Dobbs, Inc. v. Johnson, 50 N.J. 528, 236 A.2d 843 (N.J.
1967), which imbues all broker listing agreements with
the implied condition that commission is due only if the
underlying real estate transaction is consummated. Id. at
855. We decline to adopt this rule because absent a contractual provision conditioning a broker's commission on
a buyer's performance, "the broker is not an insurer of
the subsequent performance of the contract." Bushnell,
672 P.2d at 751.
[*P8] The default ready, willing, and able rule
may, however, be avoided by agreement. See, e.g., LaneReal Estate Dep't Store, Inc. v. Lawlet Corp., 28 N.Y.2d
36, 268 N.E.2d 635, 639 (N.Y. 1971). In this case, the
parties drafted a listing agreement that [***6] avoids the
rule. Paragraphs 2 and 4 of the listing agreement provide:
If . . . [Fairbourn] procures, or presents
an offer to purchase said property from
Page 3
2004 UT 54, *; 94 P.3d 292, **;
203 Utah Adv. Rep. 33; 2004 Utah LEXIS 122, ***
[Rochelle], at the price and upon the
terms and conditions set forth herein, or at
any other price or upon any other terms or
conditions acceptable to me, I agree to
pay a commission equal to $ 1,500.00 per
lot[.]
....
A[ll commissions] shall be due and payable at closing[.]
[*P9] Neither of these provisions addresses Rochelle's ability to buy the property. Instead, the provisions define what constitutes "procuring" Rochelle as a
buyer. The agreement thus renders Rochelle's fitness as a
buyer unnecessary for Fairbourn to earn a commission.
Consequently, the ready, willing, and able rule does not
apply. 1
1 The purchase contract does address Rochelle's
financial fitness in the financial capability clause,
which provides that:
Within Fourteen days after execution of this Agreement by both
parties, [Rochelle] shall supply to
[American] with evidence of financial capability to close on the
Property within the time frame
referenced above. In the event
[Rochelle] is unable to provide
said evidence, [American] shall at
its sole option cancel this Agreement and neither party shall have
any further obligation to the other.
However, the purchase contract is separate from
the listing agreement, so the financial capability
clause does not invoke the ready, willing, and
able rule.
[***7]
CLAUSE
[**295]
III. DUE AND PAYABLE
[*P10] The next issue American raises is whether
the phrase "all commissions shall be due and payable at
closing" is ambiguous, thereby leading to the conclusion
that this clause may represent a condition precedent to
payment of the commission. This question is a matter of
contract interpretation. [HN4] "When interpreting a contract, a court first looks to the contract's four corners to
determine the parties' intentions, which are controlling. If
the language within the four corners of the contract is
unambiguous . . . a court determines the parties' intentions from the plain meaning of the contractual language
as a matter of law." Bakowski v. Mountain States Steel,
Inc., 2002 UT 62, P 16, 52 P.3d 1179 (internal citations
omitted). "A contract provision is ambiguous if it is capable of more than one reasonable interpretation because
of 'uncertain meanings of terms, missing terms, or other
facial deficiencies.'" Winegar v. Froerer Corp., 813 P.2d
104, 108 (Utah 1991) (quoting Faulkner v. Farnsworth,
665 P.2d 1292, 1293 (Utah 1983)). When interpreting a
contract, a court is to consider each provision "in [***8]
relation to all of the others, with a view toward giving
effect to all and ignoring none." Green River Canal Co.
v. Thayn, 2003 UT 50, P 17, 84 P.3d 1134 (internal quotations omitted).
[*P11] Here, the due and payable clause is unambiguous, so we review the parties' intentions by examining the plain language of the contract. The plain language of the contract indicates that the due and payable
clause is merely a timing clause. If instead we give the
clause the construction urged by American, the provision
for earning commission would be meaningless. American's promise that if "[Fairbourn] . . . procures, or presents an offer . . . from [Rochelle] . . . I agree to pay a
commission" would have no meaning because the due
and payable clause would completely control the earning
of commission. We cannot ignore American's promise to
pay commission upon procurement of a buyer because
we must give effect to each contractural provision. See
id. Thus, the only tenable conclusion is that the due and
payable clause defines the time for paying commission
rather than defining a prerequisite to earning commission.
[*P12] Fairbourn procured Rochelle as a buyer
[***9] of American's property even though a closing
was not reached. Therefore, Fairbourn is entitled to its
commission pursuant to the listing agreement.
CONCLUSION
[*P13] We affirm the court of appeals' decision. In
doing so, we recognize that the ready, willing, and able
rule applies to real estate listing agreements but that in
this case the parties modified the listing agreement to be
independent of the rule. In addition, the due and payable
clause in the listing agreement is merely a timing clause
and not a precondition to payment. Therefore, we hold,
as a matter of law, that Fairbourn earned its commission
by procuring an acceptable offer from Rochelle. Affirmed.
[*P14] Chief Justice Durham, Justice Durrant, Justice Parrish, and Judge Jones concur in Associate Chief
Justice Wilkins' opinion.
[*P15] Having disqualified himself, Justice Nehring does not participate herein; District Judge Ernest
W. Jones sat.
CHAPTER 2
"PRACTICE OF LAW" IN UTAH
John Martinez
1.In In Re Disciplinary Action of Davis, 754 P.2d 63 (Utah 1988) the Utah Supreme Court held
that it had the authority to license and discipline attorneys pursuant to Utah Const. art. VIII, §4.
2. However, in Board of Com'rs of Utah State Bar v. Petersen, 97 P.2d 1263, 1270 (Utah 1997),
the Court held that it is the province of the Utah Legislature to define "the practice of law".
3. Until the 2003 legislative session, the "practice of law" had never been defined by statute.
Without legislative direction, the Court in Petersen construed the "practice of law" broadly:
"Such services would include not only appearing in court, but also drafting complaints,
drafting or negotiating contracts, drafting wills, counseling or giving advice on legal
matters, and many other things. . . . The practice of law, although difficult to define
precisely, is generally acknowledged to involve the rendering of services that require the
knowledge and application of legal principles to serve the interests of another with his
consent. It not only consists of performing services in the courts of justice throughout the
various stages of a matter, but in a larger sense involves counseling, advising, and
assisting others in connection with their legal rights, duties, and liabilities. It also includes
the preparation of contracts and other legal instruments by which legal rights and duties
are fixed." Petersen, at 1268.
4. Concerned that the Supreme Court had defined the practice of law too broadly, (and thus kept
all non-lawyers at a distance), the Legislature enacted Utah Code §78-9-102(1) as follows:
The term "practice law" means appearing as an advocate in any criminal
proceeding or before any court of record in this state in a representative capacity
on behalf of another person.
The section was effective only prospectively, and was repealed before it became effective, when
the Supreme Court adopted Rule 14-802, discussed next.
5. Effective June 7, 2005, the Utah Supreme Court added Rule 14-802-Authorization to Practice
Law, to the Supreme Court Rules of Professional Practice. The Rule provides in relevant part:
…(b)(1) The “practice of law” is the representation of the interests of another person by
informing, counseling, advising, assisting, advocating or drafting documents for that
person through application of the law and associated legal principles to that person’s facts
and circumstances.
...Whether or not it constitutes the practice of law, the following activity by a non-lawyer,
who is not otherwise claiming to be a lawyer or to be able to practice law, is permitted:
(c)(1) Making legal forms available to the general public, whether by sale or otherwise,
or publishing legal self-help information by print or electronic media.
(c)(2) Providing general legal information, opinions or recommendations about possible
legal rights, remedies, defenses, procedures, options or strategies, but not specific advice
related to another person's facts or circumstances.
Tab 1.10.doc
....
(c)(12) Advising or preparing documents for others in the following described
circumstances and by the following described persons:
(c)(12)(A) a real estate agent or broker licensed by the State of Utah may complete Stateapproved forms including sales and associated contracts directly related to the sale of real
estate and personal property for their customers.
(c)(12)(B) an abstractor or title insurance agent licensed by the State of Utah may issue
real estate title opinions and title reports and prepare deeds for customers.
(c)(12)(C) financial institutions and securities brokers and dealers licensed by the State of
Utah may inform customers with respect to their options for titles of securities, bank
accounts, annuities and other investments.
(c)(12)(D) insurance companies and agents licensed by the State of Utah may recommend
coverage, inform customers with respect to their options for titling of ownership of
insurance and annuity contracts, the naming of beneficiaries, and the adjustment of
claims under the company's insurance coverage outside of litigation.
Utah Constitution, Article VIII, Sec. 4 [Rule-making power of Supreme Court – Judges pro
tempore – Regulation of practice of law.]
The Supreme Court shall adopt rules of procedure and evidence to be used in the courts of the
state and shall by rule manage the appellate process. The Legislature may amend the Rules of
Procedure and Evidence adopted by the Supreme Court upon a vote of two-thirds of all members
of both houses of the Legislature. Except as otherwise provided by this constitution, the
Supreme Court by rule may authorize retired justices and judges and judges pro tempore to
perform any judicial duties. Judges pro tempore shall be citizens of the United States, Utah
residents, and admitted to practice law in Utah. The Supreme Court by rule shall govern the
practice of law, including admission to practice law and the conduct and discipline of persons
admitted to practice law.
Notes & Questions
1. What competing concerns arise in defining the proper roles for the Utah Supreme Court and
the Legislature in determining what activities constitute the authorized--or unauthorized-practice of law?
2. Does Chapter 14-802 properly balance the competing concerns?
3. If the activities of a real estate professional described in sections (c)(12)(A) through (c)(12)(D)
cause harm to a seller or buyer of real estate, what recourse does such a seller or buyer have
against the real estate professional? (Consider the types of claims that might be asserted.) Do
those claims provide sufficient protection?
4. What further changes would you propose the Court or the Legislature should make?
CHAPTER 2
LAWYERS ACTING AS BROKERS
Utah Code Ann. § 61-2f-202 (renumbered from § 61-1-3(2) in 2010) Exempt persons and
transactions
Transactions exempted from the licensing requirement may be described as follows:
. . .services rendered by an attorney at law in performing duties as attorney at law.
There are two American Bar Association Ethics Opinions that may have some relevance:
(1) An old (pre-1971) ethics opinion dealt with the question of whether a lawyer-realtor might
charge dual fees for services rendered the same client-customer. The Committee held that the
real estate work was, in fact, legal work when done by an attorney-realtor, and must be billed as
legal services. ABA Comm. on Prof’l Ethics, Informal Op. C-709 (1964) (which was issued
before Utah adopted the Code of Professional Responsibility).
(2) A newer opinion, under the Code of Prof. Resp., held that there is no inherent impropriety in
lawyers engaging in a second occupation, but that if the second occupation is so law-related that
the work of the lawyer in such occupation will in its nature constitute the practice of law when
done by a lawyer, then the lawyer will be considered as practicing law when he engages in that
work, and will be held to the ethical standards of a lawyer in connection with the second
occupation. ABA Comm. on Ethics and Prof’l Responsibility, Formal Op. 328 (1972).
Section 2
Utah Code Section 25-5-1
UTAH STATE LEGISLATURE
CHAPTER 4
1/27/09 11:46 AM
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25-5-1. Estate or interest in real property.
No estate or interest in real property, other than leases for a term not exceeding one year, nor
any trust or power over or concerning real property or in any manner relating thereto, shall be
created, granted, assigned, surrendered or declared otherwise than by act or operation of law,
or by deed or conveyance in writing subscribed by the party creating, granting, assigning,
surrendering or declaring the same, or by his lawful agent thereunto authorized by writing.
No Change Since 1953
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Page 1 of 1
Page 1
CHAPTER 4
James D. Nielsen, Plaintiff and Appellant, v. Gold's Gym and Troy Peterson & Associates, Defendants and Appellees.
No. 20010510
SUPREME COURT OF UTAH
2003 UT 37; 78 P.3d 600; 482 Utah Adv. Rep. 24; 2003 Utah LEXIS 92
September 16, 2003, Filed
SUBSEQUENT HISTORY:
Publication October 8, 2003.
[***1] Released for
PRIOR HISTORY: Fourth District, Provo Dep't. The
Honorable Anthony W. Schofield.
DISPOSITION:
Affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff, the owner and
lessor of commercial real estate, appealed the dismissal
by the Fourth District, Provo Department (Utah) of his
complaint against defendant, a gym manager, for breach
of a commercial lease agreement.
lease agreement was ambiguous due the missing terms
governing payment of tenant improvements.
OUTCOME: The judgment of dismissal was affirmed.
COUNSEL: Don R. Petersen and Leslie W. Slaugh,
Provo, for plaintiff.
Brian C. Harrison, Provo, for defendants.
JUDGES: WILKINS, Justice. Chief Justice Durham,
Associate Chief Justice Durrant, Justice Parrish, and Justice Nehring concur in Justice Wilkins' opinion.
OPINION BY: WILKINS
OPINION
OVERVIEW: The manager signed a standard, preprinted commercial lease agreement with the owner. After signing the lease, the owner referred the manager to a
contractor, who in turn recommended an architect for
preparation of interior improvement plans. After receiving this estimate, the manager returned to the owner to
discuss payment for the improvements. The parties failed
to reach agreement, no improvements were ever initiated,
and the manager never made any lease payments. After
unsuccessfully attempting to re-negotiate with the manager, the owner eventually rented to another tenant and
allegedly suffered over $ 112,000 in damages from the
breach. The owner sued for breach of contract. The court
ruled that the owner failed to establish that there was a
meeting of the minds as to which party was to pay for the
tenant improvements. The owner appealed. The appellate
court upheld the trial court's legal determination that the
[**600] WILKINS, Justice:
[*P1] James Nielsen, owner and lessor of commercial real estate in Spanish Fork, Utah, appeals the trial
court's dismissal of his complaint against Troy Peterson,
a Gold's Gym manager, for breach of a commercial lease
agreement. We affirm.
[**601] FACTUAL AND PROCEDURAL HISTORY
[*P2] Peterson signed a standard, pre-printed
commercial lease agreement with Nielsen on August 18,
1997. The property in question was described in the lease
as a "premises" located at "A Strip Mall at 1341 E Center
Spanish Fork, UT," to be used solely as a "Health Club
& Gym." The lease term was three years, commencing
on November 1, 1997, at an annual rate of $ 0.85 per
square foot.
Page 2
2003 UT 37, *; 78 P.3d 600, **;
482 Utah Adv. Rep. 24; 2003 Utah LEXIS 92, ***
[*P3] When the lease was signed by the parties,
[***2] the building in question was still under construction, and the land was not zoned for a health club. The
lease contained an addendum stating, among other
things, that the lease was subject to Peterson obtaining a
zoning change. The requisite zoning change was obtained in October. After signing the lease, Nielsen referred Peterson to a contractor, who in turn recommended an architect for preparation of interior improvement plans. The contractor prepared an estimate, based
on the architectural plans, of approximately $ 168,000
for tenant improvements to the building shell. After receiving this estimate, Peterson returned to Nielsen to
discuss payment for the improvements. The parties failed
to reach agreement, no improvements were ever initiated,
and Peterson never made any lease payments. After unsuccessfully attempting to re-negotiate with Peterson,
Nielsen eventually rented to another tenant and allegedly
suffered over $ 112,000 in damages from the breach.
[*P4] Nielsen brought suit for breach of contract.
At trial, Nielsen testified that he believed the lease obligated him to deliver a building shell. Peterson testified
that he believed Nielsen was obligated to pay for tenant
[***3] improvements and provide a completed building
under the lease. Both parties testified that the first discussion about who would pay for tenant improvements
did not occur until after the cost estimates were received.
[*P5] After a bench trial, the trial court ruled that
the lease agreement was unenforceable for lack of mutual assent as to the nature and extent of the property to
be leased. Specifically, the court ruled that Nielsen failed
to establish that there was a meeting of the minds as to
which party was to pay for the tenant improvements.
Nielsen appeals.
STANDARD OF REVIEW
[*P6] [HN1] We review for correctness the trial
court's legal conclusion that the contract is ambiguous.
Parduhn v. Bennett, 2002 UT 93, P5, 61 P.3d 982. If a
contract is deemed ambiguous, and the trial court allows
extrinsic evidence of intent, interpretation of the contract
becomes a factual matter and our review is strictly limited. Kimball v. Campbell, 699 P.2d 714, 716 (Utah
1985).
ANALYSIS
[*P7] The trial court held that the lease agreement
in this case is ambiguous because certain essential terms,
namely, terms governing the payment [***4] for tenant
improvements, were missing. [HN2] A lease agreement,
like any contract, "is ambiguous if it is capable of more
than one reasonable interpretation because of 'uncertain
meanings of terms, missing terms, or other facial defi-
ciencies.'" Winegar v. Froerer Corp., 813 P.2d 104, 108
(Utah 1991) (quoting Faulkner v. Farnsworth, 665 P.2d
1292, 1293 (Utah 1983)). When determining whether a
contract term is ambiguous, the court is not limited to the
contract itself. Peterson v. Sunrider Corp., 2002 UT 43,
P19, 48 P.3d 918; Ward v. Intermountain Farmers Ass'n,
907 P.2d 264, 268 (Utah 1995). Relevant, extrinsic evidence "of the facts known to the parties at the time they
entered the [contract]" is admissible to assist the court in
determining whether the contract is ambiguous. Yeargin,
Inc. v. Auditing Div. of Utah State Tax Comm'n, 2001 UT
11, P39, 20 P.3d 287.
[*P8] The trial court allowed extrinsic evidence to
assist it in the task of determining ambiguity. At the time
the parties signed the lease agreement, the building shell
was still under construction. Both parties understood that
Peterson [***5] intended to operate a health club on the
premises and that the property would require significant
interior improvements before it could be used for the
stated purpose. The trial court concluded [**602] that
"the lease document itself is utterly silent on the topic of
payment for the improvements." It further found that the
subject of improvements was not addressed by the parties, orally or otherwise, prior to or contemporaneously
with the signing of the lease agreement. In fact, the trial
court noted that the issue of who was to pay for improvements was not even raised until "well after" the
lease was signed.
[*P9] Nielsen argues on appeal that payment of
tenant improvements is implicitly addressed in his definition of the term "premises," which he asserts refers only
to the building shell that was already planned and under
construction at the time the lease was signed. According
to Nielsen, the premises could not reasonably consist of
both a building shell already planned and any additional,
unknown (at the time) tenant improvements. Thus, according to Nielsen, the lease is unambiguous, the duty to
pay for tenant improvements lies with Peterson, and the
trial court should have enforced [***6] the lease according to its terms.
[*P10] We agree with the trial court's conclusion
that this lease agreement is ambiguous. Nielsen's arguments serve only to reinforce the absence of mutual assent as to the one issue that eventually terminated this
relationship. While the parties on appeal focus on the
term "premises" as a source of contractual ambiguity, our
reading of the trial court's ruling reveals that it believed
the ambiguity is found in the absence of any contractual
language addressing payment for the improvements.
Thus, this is more a case about missing terms than indefinite terms.
[*P11] On appeal, Nielsen's only argument was
that the trial court erred when it ruled that the contract
Page 3
2003 UT 37, *; 78 P.3d 600, **;
482 Utah Adv. Rep. 24; 2003 Utah LEXIS 92, ***
was ambiguous. Since we agree with the trial court's
conclusion of ambiguity, we will only briefly note the
ultimate basis for the court's dismissal of Nielsen's action; namely, that there was no meeting of the minds on
the essential terms of the lease. [HN3] "It is fundamental
that a meeting of the minds on the integral features of an
agreement is essential to the formation of a contract. An
agreement cannot be enforced if its terms are indefinite."
Richard Barton Enters. v. Tsern, 928 P.2d 368, 373
(Utah 1996) [***7] (citing Pingree v. Cont'l Group of
Utah, Inc., 558 P.2d 1317, 1321 (Utah 1976)); Valcarce
v. Bitters, 12 Utah 2d 61, 63, 362 P.2d 427, 428 (1961))
(additional citations omitted); see also Candland v.
Oldroyd, 67 Utah 605, 608, 248 P. 1101, 1102 (1926)
[HN4] ("So long as there is any uncertainty or indefiniteness, or future negotiations or considerations to be
had between the parties, there is not a completed contract. In fact, there is no contract at all.").
[*P12] In this case, the trial court found that the
obligation to pay for tenant improvements is not addressed in the lease itself and cannot be established
through any extrinsic evidence. [HN5] The court must be
able to enforce the contract according to the parties' intentions; if those intentions are impenetrable, or never
actually existed, there can be no contract to enforce. "A
contract may be enforced even though some contract
terms may be missing or left to be agreed upon, but if the
essential terms are so uncertain that there is no basis for
deciding whether the agreement has been kept or broken,
there is no contract." Acad. Chicago Publishers v.
Cheever, 144 Ill. 2d 24, 578 N.E.2d 981, 984, 161 Ill.
Dec. 335 (Ill. 1991) [***8] (citations omitted). Here, the
trial court could not discern any basis for deciding
whether the lease had been breached and, therefore,
could not enforce the contract.
[*P13] Implicit in the trial court's ruling is the conclusion that terms governing payment of tenant improvements are essential to the lease agreement in this
case. [HN6] "Whether or not the [missing term] was essential to the contract requires an examination of the
entire agreement and the circumstances under which the
agreement was entered into." Cessna Fin. Corp. v.
Meyer, 575 P.2d 1048, 1050 (Utah 1978). Merely satisfying the minimum requirements for the statute of frauds
does not automatically render all contracts sufficiently
definite to be enforced by the courts. In this case, the
building shell itself was still under construction when the
lease was signed. Uncontroverted trial testimony establishes that the contractor had not completed the floor of
the building shell because he anticipated [**603] that
tenant improvements would require modification to the
original building plans for plumbing and electrical configurations. Nor were the roof and walls completed. This
renders the question of payment [***9] even more important, because it is not clear from the lease who was
required to pay for those tenant-based modifications to
the building shell. Furthermore, there was no evidence at
trial concerning industry customs or standards, or any
other extrinsic evidence, that would aid the court in determining responsibility for payment. Finally, even Nielsen notes that the cost of improvements "would have
consumed more than half of the total rents over the threeyear term of the lease," constituting a significant portion
of the overall costs associated with the lease. While
payment for tenant improvements is by no means an essential term in every commercial lease agreement, the
facts of this case persuade us that it was an essential part
of the bargain to be reached here.
CONCLUSION
[*P14] We uphold the trial court's legal determination that the lease agreement was ambiguous due to missing terms, specifically, those terms governing payment of
tenant improvements. The trial court's interpretation of
the contract after finding ambiguity was not challenged
on appeal; thus, we also uphold the trial court's ruling
that the contract was unenforceable for lack of mutual
assent as [***10] to the essential terms governing which
party was to pay for tenant improvements. The judgment
of dismissal is affirmed.
[*P15] Chief Justice Durham, Associate Chief Justice Durrant, Justice Parrish, and Justice Nehring concur
in Justice Wilkins' opinion.
U NIVERSITY OF U TAH
R EAL E STATE T RANSFER , F INANCE AND D EVELOPMENT
Representations, Warranties, Covenants and Conditions
Tools of the Trade
In structuring a transaction a lawyer has a bag of various tools. Take the
matter of financing for example. A buyer may be asked to represent and
warrant to a seller that she is currently employed at a specific job with
income capable of supporting the purchase and financing of the property.
She may then include a contract condition that says that the contract is
signed and undertaken on the express condition that buyer has no
obligation to proceed if she cannot obtain suitable financing within 60
days. Finally the same issue may be addressed by a covenant wherein
buyer promises to apply for a loan within two business days of executing
the contract. Thus the buyer has made a representation as to her current
employment, established a condition for financing, and given a promise to
make a timely loan application.
Attorney Duties - Utah
Utah Rules of Professional Conduct
Rule 4.3. Dealing with unrepresented person.
(a) In dealing on behalf of a client with a person who is not represented by counsel, a lawyer
shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably
should know that the unrepresented person misunderstands the lawyer's role in the matter, the
lawyer shall make reasonable efforts to correct the misunderstanding. The lawyer shall not give
legal advice to an unrepresented person, other than the advice to secure counsel, if the lawyer
knows or reasonably should know that the interests of such a person are or have a reasonable
possibility of being in conflict with the interests of the client.
(b) A lawyer may consider a person, whose representation by counsel in a matter does not
encompass all aspects of the matter, to be unrepresented for purposes of this Rule and Rule 4.2,
unless that person's counsel has provided written notice to the lawyer of those aspects of the
matter or the time limitation for which the person is represented. Only as to such aspects and
time is the person considered to be represented by counsel.
[Amended effective November 1, 2005.]
COMMENT
[1] An unrepresented person, particularly one not experienced in dealing with legal matters,
might assume that a lawyer is disinterested in loyalties or is a disinterested authority on the law
even when the lawyer represents a client. In order to avoid a misunderstanding, a lawyer will
typically need to identify the lawyer's client and, where necessary, explain that the client has
interests opposed to those of the unrepresented person. For misunderstandings that sometimes
arise when a lawyer for an organization deals with an unrepresented constituent, see Rule
1.13(f).
[2] This Rule distinguishes between situations involving unrepresented persons whose interests
may be adverse to those of the lawyer's client and those in which the person's interests are not in
conflict with the client's. In the former situation, the possibility that the lawyer will compromise
the unrepresented person's interests is so great that this Rule prohibits the giving of any advice,
apart from the advice to obtain counsel. Whether a lawyer is giving impermissible advice may
depend on the experience and sophistication of the unrepresented person, as well as the setting in
which the behavior and comments occur. This Rule does not prohibit a lawyer from negotiating
the terms of a transaction or settling a dispute with an unrepresented person. So long as the
lawyer has explained that the lawyer represents an adverse party and is not representing the
person, the lawyer may inform the person of the terms on which the lawyer's client will enter
into an agreement or settle a matter, prepare documents that require the person's signature and
explain the lawyer's own view of the meaning of the document or the lawyer's view of the
underlying legal obligations.
[3] Paragraph (b) recognizes that the scope of representation of a person by counsel may, under
Rule 1.2, be limited by mutual agreement. Because a lawyer for another party cannot know
which of Rule 4.2 or 4.3 applies under these circumstances, the lawyer who undertakes a limited
representation must assume the responsibility for informing another party's lawyer of the
limitations. This ensures that such a limited representation will not improperly or unfairly induce
an adversary's lawyer to avoid contacting the person on those aspects of a matter for which the
person is not represented by counsel. Note that this responsibility on the lawyer undertaking
limited-scope representation also relates to the ability of another party's lawyer to make certain
ex parte contacts without violating Rule 4.2.
[3a] Utah Rule of Professional Conduct 4.3(b) and related Comment [3] are Utah additions to the
ABA Model Rules clarifying that a lawyer may undertake limited representation of a client under
the provisions of Rule 1.2.
Page 1
CHAPTER 4
Raymond P. L. Cannefax and Debra Cannefax, Plaintiffs and Respondents, v. Donald W. Clement and Ruth L. Clement, Defendants and Petitioners
No. 900084
Supreme Court of Utah
818 P.2d 546; 170 Utah Adv. Rep. 27; 1991 Utah LEXIS 131
September 30, 1991, Filed
SUBSEQUENT HISTORY:
lication October 29, 1991.
[**1] Released for Pub-
PRIOR HISTORY:
Third District Court, Salt Lake
County; The Honorable Pat B. Brian. On Certiorari to the
Utah Court of Appeals.
CASE SUMMARY:
PROCEDURAL POSTURE: Petitioner judgment
creditors sought review of the decision of the Utah Court
of Appeals, which reversed the trial court's summary
judgment entered in favor of the vendors' judgment
creditors in respondent vendees' subsequent action to
quiet title.
OVERVIEW: Pursuant to a uniform real estate contract,
the vendors contracted to sell certain real property to the
vendee. The vendors' judgment creditors obtained and
docketed a judgment against the vendors. The vendee
paid the amount remaining on the contract and the vendors executed a deed to the property to the vendee. The
vendee gave a warranty deed to the property to the
vendee's subsequent vendees. Both transactions took
place at a single real estate closing. The vendee's subsequent vendees recorded their deed the next day. Two
years later, the judgment creditors sought to enforce the
judgment lien against the property through an execution
sale. In the vendee's subsequent vendees' action to quiet
title, the court affirmed the appellate court's decision and
held that the judgment creditors' lien did not attach to the
vendors' interest because the vendors' interest in the
property subject to the executory real estate contract was
not real property for purposes of Utah Code Ann. ß 78-
22-1. Although the vendors retained the naked legal title,
the vendors could only forfeit the vendee's interest if the
vendee first defaulted, an event which was completely
out of the hands of the vendors.
OUTCOME: The court affirmed the appellate court's
decision, which reversed the trial court's summary judgment entered in favor of the vendors' judgment creditors
in the action to quiet title.
COUNSEL: Rodney M. Pipella, Valden P. Livingston,
Salt Lake City, for Raymond P. L. and Debra Cannefax.
Steven H. Lybbert, Salt Lake City, for Donald and Ruth
Clement.
Michael W. Homer, David R. Olsen, Salt Lake City, for
amicus Utah Land Title Association
JUDGES: Stewart, Justice. Gordon R. Hall, Chief Justice, Richard C. Howe, Associate Chief Justice, Christine
M. Durham, Justice, Michael D. Zimmerman, Justice,
concur.
OPINION BY: STEWART
OPINION
[*546] This case is here on certiorari from a decision of the Utah Court of Appeals which reversed a
summary judgment entered by the trial court in favor of
Donald and Ruth Clement. Donald and Ruth Clement are
judgment creditors of George and Lila Barker, vendors
of land under a uniform real estate contract. The issue
before the Court is one of first impression: whether a
Page 2
818 P.2d 546, *; 170 Utah Adv. Rep. 27;
1991 Utah LEXIS 131, **
vendor's interest in real property sold by a land sale contract is transformed by the doctrine of equitable conversion into personal property and therefore not subject to a
judgment lien pursuant to Utah Code Ann. ß [**2] 7822-1 (1987). We hold that [HN1] a judgment against the
vendor of land under a land sale contract does not create
a lien against a vendor's interest for purposes of ß 78-221.
On August 28, 1981, pursuant to a uniform real estate contract, George and Lila Barker contracted to sell
certain real property which they owned in fee simple to
Diane Hodge. Ms. Hodge recorded notice of that contract
on August 31, 1981. The defendants, Donald W. Clement and Ruth [*547] L. Clement, obtained and docketed
a judgment against the Barkers in August 1985. On September 25, 1985, Ms. Hodge paid the amount remaining
on the contract, and the Barkers executed a deed to the
property to her. On the same date, Hodge gave a warranty deed to the property to the plaintiffs, Raymond and
Debra Cannefax. Both transactions took place at a single
real estate closing. The Cannefaxes recorded their deed
the next day. Following the closing but before the Cannefaxes recorded their deed, the settlement agent, Surety
Title Agency, conducted a title search which disclosed
the Clements' judgment against the Barkers. Two years
later, the Clements sought to enforce the judgment lien
against the property through an execution sale scheduled
[**3] for September 22, 1987.
The Cannefaxes brought this action to quiet title.
The trial court granted summary judgment in favor of the
Clements, holding that the judgment created a lien on the
property in the amount of $ 54,464.94, the unpaid
amount on the contract on September 25, 1985, the closing date, less the amount of prior encumbrances. The
court of appeals reversed and ordered the trial court to
enter summary judgment in favor of the Cannefaxes,
quieting title to their property. The opinion of the court
of appeals is recorded at 786 P.2d 1377 (Utah Ct. App.
1990). We affirm.
The issue presented to this Court is whether a vendor's interest in an executory land sale contract is "real
property" under Utah Code Ann. ß 78-22-1 (1987), so
that a judgment docketed against the vendor after the
contract is entered into creates a lien against the vendor's
interest in the property. [HN2] Utah Code Ann. ß 78-221 provides:
From the time the judgment of the district court . . .
is docketed and filed . . . it becomes a lien upon all the
real property of the judgment debtor, not exempt from
execution, in the county in which the judgment is entered, owned by him at the time or by him thereafter acquired [**4] during the existence of said lien. . . . The
lien shall continue for eight years unless the judgment is
previously satisfied . . . in which case the lien of the
judgment ceases.
The court of appeals held that under the doctrine of
equitable conversion, a vendor's interest in an executory
land sale contract is not real property for purposes of ß
78-22-1. Cannefax, 786 P.2d at 1379-80. In Butler v.
Wilkinson, 740 P.2d 1244, 1253-54 (Utah 1987), we
reiterated the proposition that under the doctrine of equitable conversion, a vendee's equitable interest in an installment land sale contract constitutes real property for
purposes of ß 78-22-1; however, this Court has not previously decided the nature of the vendor's interest for
purposes of the lien statute. We now hold that a vendor's
interest in an executory land sale contract is not "real
property" as that term is used in ß 78-22-1.
Although we have not previously considered the nature of a vendor's interest in an installment land contract,
a number of other jurisdictions have. The cases are almost evenly divided, with a slight majority allowing the
judgment lien to attach to the vendor's interest. R. Cunningham, W. Stoebuck, [**5] & D. Whitman, The Law
of Property ß 10.13, at 701 (1984). Compare Mooring v.
Brown, 763 F.2d 386 (10th Cir. 1985) (applying Colorado law), First Security Bank v. Rogers, 91 Idaho 654,
657, 429 P.2d 386, 389 (Idaho 1967), May v. Emerson,
52 Or. 262, 266-67, 96 P. 454, 456 (1908), and Heath v.
Dodson, 7 Wash. 2d 667, 110 P.2d 845, 847 (Wash.
1941) (holding that a judgment lien attaches to a vendor's
interest in an executory land contract) with Snow Bros.
Hardware Co. v. Ellis, 180 Ark. 238, 240-41, 21 S.W.2d
162, 163 (1929), Hull v. Maryland Casualty Co., 79 So.
2d 517, 518-19 (Fla. 1954), Bank of Hawaii v. Horwoth,
71 Haw. 204, 787 P.2d 674, 679 (1990), Cumming v.
First Nat'l Bank, 199 Iowa 667, 669, 202 N.W. 556, 556
(1925), Clarence M. Bull, Inc. v. Goldman, 30 Md. App.
665, 353 A.2d 661, 663 (1976), Marks v. City of Tucumcari, 93 N.M. 4, 6-7, 595 P.2d 1199, 1201-02 (1979),
and Mueller v. Novelty Dye Works, 273 Wis. 501, 507,
78 N.W.2d 881, 884 (1956) (holding that a judgment lien
does not attach [*548] to a vendor's interest in an executory land contract). See also 46 Am. Jur. 2d Judgments ß 266 (1969); Annotation, [**6] Right of Vendee
Under Unrecorded Executory Land Contract as Against
Subsequent Deed or Mortgage Executed by, or Judgment
Rendered Against Vendor, 87 A.L.R. 1505 (1933).
In other cases, this Court has previously held that
[HN3] the doctrine of equitable conversion applies to
transform a vendor's interest in a land sale contract from
a real property interest into a personal property interest.
For example, in Allred v. Allred, 15 Utah 2d 396, 399,
393 P.2d 791, 792 (1964), the Court stated, "As a general
rule an enforceable executory contract of sale has the
effect of converting the interest of the vendor of real
property to personalty." Also, in In Re Estate of Willson,
Page 3
818 P.2d 546, *; 170 Utah Adv. Rep. 27;
1991 Utah LEXIS 131, **
28 Utah 2d 197, 200, 499 P.2d 1298, 1300 (1972), the
Court held that a widow could not, for purposes of limiting inheritance taxes, claim an exclusion based upon a
dower interest in real property subject to an executory
contract of sale. The Court stated that the vendor's interest was "'no longer real estate . . . but personal estate . . .
and if he dies before payment, it goes to his administrators, and not to his heirs.'" Id. (emphasis in original)
(quoting 1 Pomeroy, Equity Jurisprudence 105, [**7]
135 (5th ed. 1941)).
Jelco, Inc. v. Third Judicial District Court, 29 Utah
2d 472, 475, 511 P.2d 739, 741 (1973), was a condemnation case which held that the vendee was the equitable
owner of property under an executory land contract and
therefore entitled to the appreciation in the value of the
land occurring after the contract was executed. Although
the Court declined to apply equitable conversion in Reynolds v. Van Wagoner, 592 P.2d 593, 594 (Utah 1979), it
was the vendor who sought application of the doctrine
rather than the vendee. As the Court noted, the vendor's
attempt to alter the contract by relying on equitable conversion was clearly impermissible. Finally, in Butler v.
Wilkinson, 740 P.2d 1244, 1253-54 (Utah 1987), the
Court held that [HN4] a vendee's equitable interest in an
installment land sale contract is real property for purposes of ß 78-22-1.
The Cannefaxes argue that because this Court held
that a vendee's interest in a real estate contract is a real
property interest, it must necessarily rule that the vendor's interest is not real property. The court of appeals
relied on the above cases and the language in Butler
which stated that if a vendee [**8] has an interest in real
estate, by a "'parity of reasoning'" the vendor is deemed
to have converted his real property interest to a monetary
or legal interest. Cannefax, 786 P.2d at 1380 (quoting
Butler, 740 P.2d at 1255 n.5). However, that language
from Butler was intended only as a general description of
the doctrine of equitable conversion. The question of the
nature of the vendor's interest was not before the Court in
Butler. In fact, we also observed in Butler that
the characterization of the vendee as "owner" of the land
and of the vendor as having no interest in the land is not
wholly accurate. The vendor's retention of the legal title
is usually coupled with a contract right to forfeit the
vendee's interest and to take back the vendee's interests if
the vendee defaults.
740 P.2d at 1255 (citation omitted). We also noted that
this characterization of the vendor's interest as a lien is
not completely accurate:
The term "vendor's lien" seems to have stuck even
though it is inaccurately used before the vendor parts
with the title. Until then, it is not, in fact, a lien at all, but
rather a retained interest in the land that is derived from
the vendor's [**9] retention of the fee title.
740 P.2d at 1256 n.6 (citation omitted). In other words,
the mere fact that the vendee is treated as having a real
property interest does not necessarily preclude the vendor from also having such an interest.
The dissent in the court of appeals opinion also asserts that this Court has already taken a position on this
issue. Quoting Butler, the dissent states:
"Nor for that matter, is a judgment lien against the vendor's interest extinguished by the vendor's sale of that
interest [*549] to a third person." The Clements argue,
and I agree, that this statement clearly shows that the
Supreme Court considers the seller's retained title to be
real property, since judgment liens attach only to real
property, not to personal property, pursuant to section
78-22-1.
Cannefax, 786 P.2d at 1385 (quoting Butler, 740 P.2d at
1258). However, that quotation simply stands for the
proposition that [HN5] a judgment lien which has already attached to real property will not be destroyed by a
subsequent conveyance of the property. In other words,
the property passes subject to the lien. See Utah Farm
Prod. Credit Ass'n v. Wasatch Bank, 734 P.2d 904 (Utah
1987); Barlow [**10] Soc'y v. Commercial Sec. Bank,
723 P.2d 398 (Utah 1986). That statement has nothing to
do with the nature of a vendor's retained interest.
The dissent in the court of appeals opinion also argues that the majority's holding is contrary to the intent
of the contracting parties. Cannefax, 786 P.2d at 1388
(Bullock, Senior District Judge, dissenting). However,
the fact that the contract may have "contemplate[d] a
transfer of ownership by deed after all installments have
been paid" is irrelevant to construing the judgment lien
statute. 1 The true issue is whether the vendor retained a
sufficient interest in the property to qualify as "owning
real property" for purposes of ß 78-22-1.
1 In fact, the dissent misinterprets the parties'
intent. The parties clearly intended to convey unencumbered title to the land. They certainly did
not intend that after they entered into the contract
and after payments were made, the vendor's
judgment creditors could obtain and execute on
the vendee's property to the extent the contract
was executory.
[**11] Section 78-22-1 provides that a judgment
becomes a lien upon the real property owned by the
judgment debtor at the time of docketing. The position
taken by the Clements and the trial court is that the
Page 4
818 P.2d 546, *; 170 Utah Adv. Rep. 27;
1991 Utah LEXIS 131, **
judgment lien attaches to real property to the extent that
the contract remains unpaid. This argument is inconsistent with the assertion that the vendor's retained title
causes his interest to be real property. If the vendor's
retention of legal title were sufficient to constitute real
property under ß 78-22-1, it follows that the judgment
lien should attach to the entire property, subject to prior
encumbrances. As this Court recognized in Belnap v.
Blain, 575 P.2d 696, 699 (Utah 1978), [HN6] the fact
that a judgment debtor has no equity in real property
because encumbrances on the property exceed its fair
market value does not prevent a judgment lien from attaching to the property, subject to prior encumbrances.
The Clements' position, that the lien attaches only to the
extent the contract is unpaid, is actually the first step
toward applying the doctrine of equitable conversion.
That position recognizes that the vendor's true interest is
in receiving the unpaid amount on the contract, [**12]
an interest more akin to personalty than to realty.
The principle underlying Butler, Allred, Willson, and
Jelco is that [HN7] the vendee of an executory land sale
contract holds equitable ownership of the property but
not legal title. As stated in Butler, the vendor retains the
naked legal title, which serves as the basis for forfeiting
the vendee's interest and retaking possession if the
vendee defaults. 740 P.2d at 1255. In Belnap, the Court
recognized that a judgment lien does not attach to "bare
legal title" to property held by a "trustee of an express,
constructive, or resulting trust or [by] an agent or mere
conduit for the transfer of title to the true owner." 575
P.2d at 699. Admittedly, the vendor's interest in this case
constitutes more than "bare legal title." However, for
purposes of ß 78-22-1, that interest is more closely
analogous to the examples mentioned in Belnap than it is
to true "ownership of real property" as required by the
statute. Although the vendor may forfeit the vendee's
interest, he may do so only if the vendee first defaults, an
event which is completely out of the hands of the vendor.
Furthermore, a vendor who breaches a land sale contract
[**13] in an attempt to retain the property will be subject to either damages or a decree for specific performance. See Willson, 28 Utah 2d at 200, 499 P.2d at 1300.
Even though the vendor may retain title to the property,
[*550] that title is effectively held for the benefit of the
vendee, to whom it will pass if the contract is carried out.
As stated in Willson, "the transfer of legal title and record title [is] dependent only upon the acts and conduct
of the buyer." Id. In short, the mere retention of title of
land subject to a land sale contract does not amount to
ownership of real property for purposes of ß 78-22-1.
Policy concerns also dictate this result. If a judgment
lien could attach to the vendor's interest in an executory
land contract, the vendee would be forced to make payments at his or her peril, risking the chance that a subse-
quent judgment has been docketed after execution of the
contract. For example, a vendee who has paid the entire
purchase price could still be subject to an execution sale
on the purchased property if a judgment was docketed
after the contract had been entered into but before all the
payments had been made. Because a judgment which has
not yet been [**14] docketed cannot be uncovered by a
title search, such a search can provide no protection to
the vendee at the time the contract is entered into. Instead, the vendee would be forced to do a title search
before each payment. Even if a judgment lien were discovered in this way, the vendee would be forced to
choose whether to pay the vendor or the judgment creditor, thereby risking the possibility of having to pay twice.
2
Therefore, the position which the Clements urge this
Court to adopt would make real estate contracts impracticable as an alternative to conventional financing, harming those who are poor credit risks and who are unable to
obtain other financing.
2 Another alternative would be to file an interpleader action, allowing a court to determine who
is entitled to the payments. This alternative is
both costly and time-consuming.
However, the Clements also argue that if this Court
does not rule that a judgment lien attaches to the debtor's
interest in the land contract at the time the judgment is
docketed, the [**15] Court should at least rule that the
lien attaches at the time the vendee has notice of the lien.
The Clements assert that the Cannefaxes had notice of
the lien at the time they purchased the property from
Hodge and that the property is therefore subject to the
lien. This contention would require us to rewrite ß 78-221, which provides that the lien will attach to the property
from the time the judgment is docketed. Nothing in the
statute supports this construction. Furthermore, the stipulated facts would not support the Clements' argument.
The settlement agent did not discover the judgment until
after the closing. The judgment debtors then transfered
title to Hodge before the discovery of the judgment.
Therefore, there was nothing to which the lien could attach. Hodge's transfer of title to the Cannefaxes was
therefore also free of the lien.
Our holding does not "place insufficient value in the
need to efficiently enforce judgments," as the dissent in
the court of appeals argues. Cannefax, 786 P.2d at 1389.
The need to enforce judgments is not so great that a lien
must attach to property in the process of being transferred and to which the vendor's rights are contractually
limited. [**16] This theory not only places undue emphasis on the method of financing chosen by the contracting parties, but it also unfairly allocates risk to the
vendee. This holding does not prevent the judgment
creditor from reaching the vendor's interest in the prop-
Page 5
818 P.2d 546, *; 170 Utah Adv. Rep. 27;
1991 Utah LEXIS 131, **
erty, either by garnishing payments as they are made or
perhaps by executing on the vendor's interest in the contract. 3
3 [HN8] Some courts have held, and, it would
seem, with sound reason, that the vendor's judgment creditors acquire no lien as against the purchaser even though the purchase price is unpaid
and the purchaser knows of the judgment. This
works no injustice upon the creditors, who may
proceed by garnishment to reach the purchase
money or by bill for equitable execution to reach
both purchase money and vendor's lien.
III American Law of Property ß 11.29, at 86
(A. Casner ed. 1952).
For the above reasons, we hold that the vendor's interest in property subject to an executory real estate contract is not real property for purposes of ß 78-22-1 and,
therefore, [**17] that the judgment creditor's lien
[*551] did not attach to the vendor's interest. The decision of the court of appeals is affirmed.
Section 3
Page 1
CHAPTER 5
Dorann Mitchell, Plaintiff and Petitioner, v. Jesse Christensen and Betty Christensen, Defendants and Respondents.
No. 20000593
SUPREME COURT OF UTAH
2001 UT 80; 31 P.3d 572; 429 Utah Adv. Rep. 15; 2001 Utah LEXIS 148
August 31, 2001, Filed
SUBSEQUENT HISTORY: [***1] The Publication
Status of this Document has been Changed by the Court
from Unpublished to Published September 18, 2001.
PRIOR HISTORY:
Third District, Salt Lake. The
Honorable Dennis M. Fuchs.
Mitchell v. Christensen, 2000 UT App 170, 2000 Utah
App. LEXIS 313 (2000)
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff buyer brought
claims for fraudulent nondisclosure and fraudulent concealment against defendant sellers. The Third District
Court, Salt Lake, granted the sellers' motion for summary
judgment, and the Court of Appeal (Utah) affirmed. The
buyer appealed the judgment on the nondisclosure claim.
ble defect necessitating either further inquiry or inspection.
OUTCOME: The decision of the court of appeals was
reversed, and the case was remanded to the trial court for
further proceedings on the buyer's fraudulent nondisclosure claim.
COUNSEL: Scott B. Mitchell, Salt Lake City, for plaintiff.
George E. Harris, Jr., Jennifer Ward, Salt Lake City, for
defendants.
JUDGES: Associate Chief Justice Russon. WE CONCUR: Chief Justice Howe, Justice Durham, Justice Durrant, and Justice Wilkins.
OPINION BY: RUSSON
OVERVIEW: The buyer sued the sellers for failing to
disclose the existence of leaks in their swimming pool
prior to selling their property. The buyer inspected the
property and found the backyard swimming pool full of
water with no visible indications that the pool leaked.
She also hired a profession home inspector, who likewise
did not notice any defects in the pool. The lower court
determined that the buyer failed to exercise reasonable
care when she did not have an in-depth inspection of the
swimming pool completed. Assuming the sellers knew of
the leaks, they had a legal duty to disclose these defects
to the buyer. The leaks in the swimming pool could not
have been discovered through reasonable care. There
was nothing in the record to indicate that an ordinary
prudent buyer would have been put on notice of a possi-
OPINION
[**573] RUSSON, Associate Chief Justice:
[*P1] Plaintiff Dorann Mitchell ("Mitchell") seeks
certiorari review of the Utah Court of Appeals' decision
upholding the trial court's dismissal of Mitchell's claim
against defendants Jesse and Betty Christensen (the
"Christensens") for fraudulent nondisclosure. Mitchell
sued the Christensens for failing to disclose the existence
of leaks in their backyard swimming pool prior to selling
their property to Mitchell. We reverse and remand.
BACKGROUND
Page 2
2001 UT 80, *; 31 P.3d 572, **;
429 Utah Adv. Rep. 15; 2001 Utah LEXIS 148, ***
[*P2] On September 25, 1995, Mitchell purchased
a home from the Christensens that included a backyard
swimming pool. In connection with the sale of the property, the parties executed a real estate purchase contract
giving Mitchell the right to inspect the property herself
and to [***2] hire a professional home inspector to inspect the property. Accordingly, Mitchell inspected the
property herself on a number of occasions prior to closing the purchase transaction. During each inspection,
Mitchell found the backyard swimming pool full of water with no visible indications that the pool leaked or was
defective in any way.
[*P3] Moreover, in addition to personally inspecting the property, Mitchell hired a professional home inspector, AmeriSpec of Salt Lake ("AmeriSpec"), to examine the property. AmeriSpec inspected the property
and provided Mitchell with an inspection report. Like
Mitchell, AmeriSpec found the swimming pool to be in
working order with no visible indications that the pool
leaked. However, the inspection report provided by
AmeriSpec was limited in scope. Specifically, the inspection report stated:
Our review is limited to above ground
or visible items only. It is an operational
inspection of the accessible equipment
and components and is therefore limited
in scope. If concerned, client is advised to
have a licensed pool company perform an
in-depth review and/or service.
Because Mitchell's personal inspection and AmeriSpec's
subsequent [***3] professional inspection, although
limited in scope, did not uncover any problems whatsoever with the swimming pool, Mitchell did not hire a
licensed pool company to perform an "in-depth review
and/or service." However, after closing the purchase
transaction, a number of leaks in both the piping and the
body of the swimming pool were discovered.
[*P4] After discovering the leaks in the swimming
pool, Mitchell filed a complaint in the district court, asserting a claim against the Christensens for fraudulent
nondisclosure. 1 Specifically, Mitchell alleged that at the
time of the sale of the property (1) the pool was leaking,
(2) the Christensens knew of the existence of the leaks,
and (3) the Christensens had a legal duty to disclose
these defects prior to selling their property to Mitchell,
which they failed to do.
1
In addition to her fraudulent nondisclosure
claim, Mitchell also asserted a claim against the
Christensens for fraudulent concealment, which,
like her fraudulent nondisclosure claim, was dis-
missed by the trial court. On appeal, the court of
appeals upheld the trial court's dismissal of
Mitchell's fraudulent concealment claim. In this
review, Mitchell does not argue that the court of
appeals erred in upholding the trial court's dismissal of this claim, and we therefore do not address it.
[***4] [*P5] The Christensens denied Mitchell's
allegations that the pool leaked on or before the sale of
the property and that, if it did, they were aware of any
leaks. However, for the purpose of summary judgment,
the Christensens asked the trial court "to assume
[**574] that [they] did know about the existence of
leaks in the pool" at the time of the sale of the property,
arguing that even if they knew of the leaks, they had no
duty to disclose these defects and therefore, based on the
doctrine of caveat emptor (let the buyer beware),
Mitchell's complaint must be dismissed. (Emphasis in
original.)
[*P6] On March 18, 1999, the trial court granted
the Christensens' motion for summary judgment. The
trial court held: "[Mitchell] had a duty and opportunity to
conduct a thorough inspection of the pool and failed to
do so. Under these circumstances even if [the Christensens] knew of the defects, based on caveat emptor it
was not [the Christensens'] legal duty to disclose."
[*P7] Mitchell appealed the trial court's ruling, 2
arguing to the court of appeals that the trial court erred in
its determination that the Christensens had no duty, as a
matter of law, to disclose the [***5] known leaks in the
swimming pool. Mitchell argued that because her personal inspection and AmeriSpec's subsequent professional inspection did not uncover any potential defects in
the pool, she did not act unreasonably in declining to hire
a second professional inspector to conduct an in-depth
review of the pool. The court of appeals, however, affirmed the trial court's grant of summary judgment in
favor of the Christensens, holding that Mitchell "failed to
exercise reasonable care when she did not have an indepth inspection of the swimming pool completed, [and
therefore,] the trial court correctly granted summary
judgment on this issue." Mitchell v. Christensen, No.
990321, slip op. at 2 (Utah Ct. App. 2000). Mitchell argues that the court of appeals erred and seeks certiorari
review.
2 Mitchell appealed to this court, which poured
the case over to the court of appeals pursuant to
section 78-2-2 of the Utah Code. See Utah Code
Ann. ß 78-2-2(4) (1996); Utah R. App. P. 42(a).
[***6] STANDARD OF REVIEW
Page 3
2001 UT 80, *; 31 P.3d 572, **;
429 Utah Adv. Rep. 15; 2001 Utah LEXIS 148, ***
[*P8] [HN1] "When exercising our certiorari jurisdiction, 'we review the decision of the court of appeals,
not of the trial court.'" Macris & Assocs., Inc. v. Neways,
Inc., 2000 UT 93, P17, 16 P.3d 1214 (quoting Carrier v.
Pro-Tech Restoration, 944 P.2d 346, 350 (Utah 1997)).
[HN2] Moreover, because a summary judgment presents
questions of law, we accord no particular deference to
the court of appeals' ruling; we review it for correctness.
See Ron Case Roofing & Asphalt Paving, Inc. v. Blomquist, 773 P.2d 1382, 1385 (Utah 1989).
ANALYSIS
[*P9] The elements of a claim for fraudulent nondisclosure were discussed by this court in First Security
Bank of Utah v. Banberry Development Corp., 786 P.2d
1326 (Utah 1990). Specifically, this court stated:
covered by reasonable care, the doctrine of caveat emptor prevails and precludes recovery by the vendee. Indeed, in Utah State Medical Ass'n v. Utah State Employees Credit Union, this court stated:
The clear majority of the courts have
deemed it reasonable to hold the purchaser to the caveat emptor doctrine in the
purchase of used housing. The parties
know the article is not new, and the buyer
who has an opportunity to inspect the article is placed on the alert for defects which
might affect the article's quality, condition
or fitness.
655 P.2d 643, 645 (Utah 1982).
"One of the fundamental tenets of the
Anglo-American law of fraud is that fraud
may be committed by the suppression of
the truth . . . as well as the suggestion of
falsehood. . . .
Silence, in order to be an actionable
fraud, must relate to a material matter
known to the party and which it is his legal duty to communicate to the other contracting [***7] party . . . ."
Id. at 1328 (quoting Elder v. Clawson, 14 Utah 2d
379, 382, 384 P.2d 802, 804 (1963)). [HN3] Thus, to
prevail on a claim of fraudulent nondisclosure, the plaintiff must show (1) that the nondisclosed information is
material, (2) that the nondisclosed information is known
to the party failing to disclose, and (3) that there is a legal duty to communicate.
[*P10] In the instant case, it is undisputed that the
undisclosed information--leaks in the swimming pool-was material. Moreover, the parties have assumed for the
purpose of summary judgment that the Christensens
knew of the leaks in the swimming pool prior to the sale
of their property to Mitchell. Therefore, the only issue
here is whether, assuming the Christensens knew of the
leaks, they had a legal duty to disclose these defects to
Mitchell.
[*P11] [HN4] A seller of realty is not obligated to
reveal all that he or she knows about the property involved. Rather, as we explained in Banberry, the duty to
communicate or disclose in a vendor-vendee transaction
exists only where a defect is "'not discoverable by reasonable care.'" 786 P.2d [**575] at 1331 (quoting W.
Page [***8] Keeton et al., Prosser and Keeton on the
Law of Torts 739 (5th ed. 1984)). If a defect can be dis-
[*P12] Although we have not had occasion to expressly say so, courts in other jurisdictions have held that
[HN5] in determining what constitutes reasonable care in
the discovery of defects, the proper standard is whether
the defect would be apparent to ordinary prudent persons
with like experience, not to persons with specialized
knowledge in the field of construction or real estate. See,
e.g., Tipton v. Nuzum, 84 Ohio App. 3d 33, 616 N.E.2d
265, 268 (Ohio Ct. App. 1992) (holding [***9] that
"buyers should be accorded 'the benefit of comparison
with ordinarily prudent persons of their station and experience confronted by the same or similar circumstances'"
(quoting Traverse v. Long, 165 Ohio St. 249, 135 N.E.2d
256, 259 (Ohio 1956))); Quashnock v. Frost, 299 Pa.
Super. 9, 445 A.2d 121, 127 (Pa. Super. Ct. 1982) (finding duty of disclosure where defect would not have been
discoverable by an "ordinary inexperienced person"
(emphasis added)); see also, e.g., Restatement (Second)
of Torts ß 551 cmt. l, illus. 9 (1977) (stating that duty to
disclose defects exists where "A knows that B is not
aware of [the defect], that he could not discover it by an
ordinary inspection, and that he would not make the purchase if he knew it" (emphasis added)); 37 Am. Jur. 2d
Fraud and Deceit ß 158, at 217 (1968) (stating that the
buyer of property cannot charge the seller with fraud for
failure to disclose a defect if the defect "could be discovered by such an examination as a careful and prudent
man would ordinarily make"). We agree with the reasoning of the above courts because to decide otherwise
would force purchasers to hire numerous [***10] expert
home inspectors to search for hidden defects, or forfeit
any claim for fraudulent nondisclosure.
[*P13] However, although the proper standard for
the discoverability of a defect is that of an ordinary prudent person, this does not mean that inspection by an
expert will never be required. [HN6] Indeed, under certain circumstances, a reasonably prudent buyer should be
Page 4
2001 UT 80, *; 31 P.3d 572, **;
429 Utah Adv. Rep. 15; 2001 Utah LEXIS 148, ***
put on notice that a possible defect exists, necessitating
either further inquiry of the owner of the home, who is
under a duty not to engage in fraud, see Price-Orem Inv.
Co. v. Rollins, Brown & Gunnell, Inc., 713 P.2d 55, 59
(Utah 1986) (describing elements of negligent misrepresentation); Dugan v. Jones, 615 P.2d 1239, 1246 (Utah
1980) (describing elements of fraudulent misrepresentation), or inspection by someone with sufficient expertise
to appraise the defect.
[*P14] In the instant case, Mitchell inspected the
swimming pool herself on multiple occasions prior to
closing the purchase transaction. During each of those
inspections, Mitchell found the pool full of water with no
visible indications that the pool leaked. Moreover, in
accordance with the purchase contract,
[***11]
Mitchell hired a professional home inspector, AmeriSpec, to inspect the pool. AmeriSpec, like Mitchell, found
the pool to be in working order and, as stated in the inspector's affidavit, "found nothing during the course of
[the] inspection that would have indicated that the pool
was leaking." Nevertheless, because AmeriSpec limited
its inspection of the swimming pool to accessible or
"above ground" components, the court of appeals held
that Mitchell acted unreasonably in failing to hire a second professional inspector to conduct an "in-depth inspection" of the inaccessible components of the swimming pool. Mitchell v. Christensen, No. 990312, slip op.
at 2 (Utah Ct. App. 2000).
[*P15] However, there is nothing in the record to
indicate that a reasonably prudent buyer would have
been put on notice of a possible defect with the below
ground or [**576] inaccessible portions of the swimming pool, necessitating an "in-depth" inspection. Indeed, although AmeriSpec's inspection report was limited in scope, it proclaimed the pool to be in working
order and did not recommend an "in-depth review."
Rather, the inspection report merely stated: "If concerned, client is advised to have a [***12] licensed pool
company perform an in-depth review and/or service."
(Emphasis added.) Yet, as noted above, nothing in
Mitchell's multiple personal inspections or AmeriSpec's
subsequent professional inspection should have "concerned" Mitchell, as both inspections indicated that the
pool was in working order and was free from leaks. Indeed, all that can be said of the disclaimer contained in
AmeriSpec's inspection report is that it put Mitchell on
notice that inaccessible components of the swimming
pool existed and could not be inspected. Nothing in the
inspection report, however, can reasonably be construed
as stating that there were any problems whatsoever with
these inaccessible components. And as this court stated
in Elder v. Clawson, "There [is] no occasion for [purchasers] to make an independent investigation of a [problem] of which they know nothing." 14 Utah 2d 379, 382,
384 P.2d 802, 804 (1963).
[*P16] Therefore, in view of the foregoing, we
conclude that the Christensens had a legal duty to disclose the leaks in their swimming pool prior to the sale of
their property to Mitchell, assuming it is determined on
remand that the Christensens knew of the [***13] existence of the leaks. The leaks in the swimming pool could
not have been discovered through reasonable care--as
evidenced by the fact that Mitchell's multiple personal
inspections, and AmeriSpec's subsequent professional
inspection, did not uncover any indication whatsoever
that the pool was leaking. Moreover, there is nothing in
the record to indicate that an ordinary prudent buyer
would have been put on notice of a possible defect with
the inaccessible portions of the swimming pool, necessitating either further inquiry of the owner of the home or
inspection by someone with sufficient expertise to appraise the defect. Accordingly, the decision of the court
of appeals is reversed, and the case is remanded to the
trial court for further proceedings not inconsistent with
this opinion.
CHAPTER 5
FAILURE TO DISCLOSE FOR STIGMA IN UTAH
57-1-1 Definitions.
As used in this title:
(1) "Certified copy" means a copy of a document certified by its custodian to be a true
and correct copy of the document or the copy of the document maintained by the custodian,
where the document or copy is maintained under the authority of the United States, the state of
Utah or any of its political subdivisions, another state, a court of record, a foreign government, or
an Indian tribe.
(2) "Document" means every instrument in writing, including every conveyance,
affecting, purporting to affect, describing, or otherwise concerning any right, title, or interest in
real property, except wills and leases for a term not exceeding one year.
(3) "Real property" or "real estate" means any right, title, estate, or interest in land,
including all nonextracted minerals located in, on, or under the land, all buildings, fixtures and
improvements on the land, and all water rights, rights-of-way, easements, rents, issues, profits,
income, tenements, hereditaments, possessory rights, claims, including mining claims, privileges,
and appurtenances belonging to, used, or enjoyed with the land or any part of the land.
(4) "Stigmatized" means:
(a) the site or suspected site of a homicide, other felony, or suicide;
(b) the dwelling place of a person infected, or suspected of being infected, with the
Human Immunodeficiency Virus, or any other infectious disease that the Utah Department of
Health determines cannot be transferred by occupancy of a dwelling place; or
(c) property that has been found to be contaminated, and that the local health
department has subsequently found to have been decontaminated in accordance with Title 19,
Chapter 6, Part 9, Illegal Drug Operations Site Reporting and Decontamination Act.
57-1-37 Failure to disclose not a basis for liability.
(1) The failure of an owner of real property to disclose that the property being offered for
sale is stigmatized is not a material fact that must be disclosed in the transaction of real property.
(2) Neither an owner nor his agent is liable for failing to disclose that the property is
stigmatized.
Page 1
CHAPTER 5
Jeffrey M. Stambovsky, Appellant, v. Helen V. Ackley et al., Respondents
No. 42845
Supreme Court of New York, Appellate Division, First Department
169 A.D.2d 254; 572 N.Y.S.2d 672; 1991 N.Y. App. Div. LEXIS 9873
July 18, 1991
PRIOR HISTORY: [***1] Appeal from a judgment
of the Supreme Court (Edward H. Lehner, J.), entered
April 9, 1990 in New York County, which dismissed the
complaint pursuant to CPLR 3211 (a) (7).
DISPOSITION:
Judgment, Supreme Court, New
York County, entered on April 9, 1990, modified, on the
law and the facts, and in the exercise of discretion, and
the first cause of action seeking rescission of the contract
reinstated, without costs.
tiff's ignorance as to the house's reputation, but defendant
herself also had created and perpetuated that reputation.
OUTCOME: Dismissal reversed, as while caveat emptor prevented an action for damages, it did not prevent
plaintiff's desired equitable remedy of recission. Recission was appropriate since defendant took unfair advantage of plaintiff's ignorance of house's haunted reputation, which reputation defendant herself had created and
perpetuated.
CASE SUMMARY:
COUNSEL: William M. Stein of counsel (Hood & Stein,
attorneys), for appellant.
PROCEDURAL POSTURE: Plaintiff appealed dismissal of his complaint by the Supreme Court, New
York County (New York), in action seeking recission of
contract for sale of a house that plaintiff later discovered
had a reputation as being haunted.
Andrew C. Bisulca of counsel (Mann, Mann & Lewis, P.
C., attorneys), for Helen V. Ackley, respondent.
OVERVIEW: Plaintiff contracted to purchase a house
from defendant, and after the sale was complete plaintiff
learned the house had a reputation as being possessed by
poltergeists. Plaintiff filed a complaint to rescind the
contract, which was dismissed by the trial court. The
appellate court reversed. First, the court concluded that
due to defendant's reports of the alleged hauntings in
national and local publications, she was estopped to deny
the poltergeists' existence and thus, as the court stated,
"as a matter of law, the house [was] haunted." Noting
that reports of hauntings lowered the resale value of the
house, the court held that while caveat emptor prevented
an action for damages, it did not prevent the equitable
remedy of recission. Here, recission was appropriate
since defendant not only took unfair advantage of plain-
JUDGES: Rubin, J. Ross and Kassal, JJ., concur with
Rubin, J.; Milonas, J. P., and Smith, J., dissent in an
opinion by Smith, J.
Jeffrey J. Ellis of counsel (Quirk & Bakalor, P. C., attorneys), for Ellis Realty, respondent.
OPINION BY: RUBIN
OPINION
[*255] [**674] OPINION OF THE COURT
Plaintiff, to his horror, discovered that the house he
had recently contracted to purchase was widely reputed
to be [*256] possessed by poltergeists, reportedly seen
by defendant seller and members of her family on numerous occasions over the last nine years. Plaintiff
promptly commenced [***2] this action seeking rescission of the contract of sale. Supreme Court reluctantly
Page 2
169 A.D.2d 254, *; 572 N.Y.S.2d 672, **;
1991 N.Y. App. Div. LEXIS 9873, ***
dismissed the complaint, holding that plaintiff has no
remedy at law in this jurisdiction.
[1] The unusual facts of this case, as disclosed by
the record, clearly warrant a grant of equitable relief to
the buyer who, as a resident of New York City, cannot be
expected to have any familiarity with the folklore of the
Village of Nyack. Not being a "local", plaintiff could not
readily learn that the home he had contracted to purchase
is haunted. Whether the source of the spectral apparitions
seen by defendant seller are parapsychic or psychogenic,
having reported their presence in both a national publication (Readers' Digest) and the local press (in 1977 and
1982, respectively), defendant is estopped to deny their
existence and, as a matter of law, the house is haunted.
More to the point, however, no divination is required to
conclude that it is defendant's promotional efforts in publicizing her close encounters with these spirits which
fostered the home's reputation in the community. In
1989, the house was included in five-home walking tour
of Nyack and described in a November 27th newspaper
[***3] article as "a riverfront Victorian (with ghost)."
The impact of the reputation thus created goes to the
very essence of the bargain between the parties, greatly
impairing both the value of the property and its potential
for resale. The extent of this impairment may be presumed for the purpose of reviewing the disposition of
this motion to dismiss the cause of action for rescission (
Harris v City of New York, 147 AD2d 186, 188-189) and
represents merely an issue of fact for resolution at trial.
[2] While I agree with Supreme Court that the real
estate broker, as agent for the seller, is under no duty to
disclose [**675] to a potential buyer the phantasmal
reputation of the premises and that, in his pursuit of a
legal remedy for fraudulent misrepresentation against the
seller, plaintiff hasn't a ghost of a chance, I am nevertheless moved by the spirit of equity to allow the buyer to
seek rescission of the contract of sale and recovery of his
down payment. New York law fails to recognize any
remedy for damages incurred as a result of the seller's
mere silence, applying instead the strict rule of caveat
emptor. Therefore, the theoretical basis for granting relief, [***4] even under the extraordinary facts of this
case, is elusive if not ephemeral.
[*257] "Pity me not but lend thy serious hearing to
what I shall unfold" (William Shakespeare, Hamlet, Act
I, Scene V [Ghost]).
[3] From the perspective of a person in the position
of plaintiff herein, a very practical problem arises with
respect to the discovery of a paranormal phenomenon:
"Who you gonna' call?" as a title song to the movie
"Ghostbusters" asks. Applying the strict rule of caveat
emptor to a contract involving a house possessed by poltergeists conjures up visions of a psychic or medium
routinely accompanying the structural engineer and Terminix man on an inspection of every home subject to a
contract of sale. It portends that the prudent attorney will
establish an escrow account lest the subject of the transaction come back to haunt him and his client -- or pray
that his malpractice insurance coverage extends to supernatural disasters. In the interest of avoiding such untenable consequences, the notion that a haunting is a condition which can and should be ascertained upon reasonable inspection of the premises is a hobgoblin which
should be exorcised from the body of legal [***5]
precedent and laid quietly to rest.
It has been suggested by a leading authority that the
ancient rule which holds that mere nondisclosure does
not constitute actionable misrepresentation "finds proper
application in cases where the fact undisclosed is patent,
or the plaintiff has equal opportunities for obtaining information which he may be expected to utilize, or the
defendant has no reason to think that he is acting under
any misapprehension" (Prosser, Torts ß 106, at 696 [4th
ed 1971]). However, [HN1] with respect to transactions
in real estate, New York adheres to the doctrine of caveat
emptor and imposes no duty upon the vendor to disclose
any information concerning the premises ( London v
Courduff, 141 AD2d 803) unless there is a confidential or
fiduciary relationship between the parties ( Moser v
Spizzirro, 31 AD2d 537, affd 25 NY2d 941; IBM Credit
Fin. Corp. v Mazda Motor Mfg. [USA] Corp., 152 AD2d
451) or some conduct on the part of the seller which constitutes "active concealment" (see, 17 E. 80th Realty
Corp. v 68th Assocs., AD2d [1st Dept, May 9, 1991]
[dummy ventilation system constructed by seller];
Haberman v Greenspan, 82 [***6] Misc 2d 263 [foundation cracks covered by seller]). Normally, some affirmative misrepresentation (e.g., Tahini Invs. v Bobrowsky, 99 AD2d 489 [industrial waste on land allegedly used only as farm]; Jansen v Kelly, 11 AD2d 587
[land containing valuable minerals allegedly acquired for
use as campsite]) or [*258] partial disclosure ( Junius
Constr. Corp. v Cohen, 257 NY 393 [existence of third
unopened street concealed]; Noved Realty Corp. v A. A.
P. Co., 250 App Div 1 [escrow agreements securing lien
concealed]) is required to impose upon the seller a duty
to communicate undisclosed conditions affecting the
premises (contra, Young v Keith, 112 AD2d 625 [defective water and sewer systems concealed]).
Caveat emptor is not so all-encompassing a doctrine
of common law as to render every act of nondisclosure
immune from redress, whether legal or equitable. [HN2]
"In regard to the necessity of giving information which
has not been asked, the rule differs somewhat at law and
in equity, and while the law courts would permit no recovery of damages against a vendor, because of mere
concealment of facts under certain circumstances, yet if
Page 3
169 A.D.2d 254, *; 572 N.Y.S.2d 672, **;
1991 N.Y. App. Div. LEXIS 9873, ***
the vendee [***7] refused [**676] to complete the
contract because of the concealment of a material fact on
the part of the other, equity would refuse to compel him
so to do, because equity only compels the specific performance of a contract which is fair and open, and in
regard to which all material matters known to each have
been communicated to the other" ( Rothmiller v Stein,
143 NY 581, 591-592 [emphasis added]). Even as a
principle of law, long before exceptions were embodied
in statute law (see, e.g., UCC 2-312, 2-313, 2-314, 2315; 3-417 [2] [e]), the doctrine was held inapplicable to
contagion among animals, adulteration of food, and insolvency of a maker of a promissory note and of a tenant
substituted for another under a lease (see, Rothmiller v
Stein, supra, at 592-593, and cases cited therein). Common law is not moribund. Ex facto jus oritur (law arises
out of facts). [HN3] Where fairness and common sense
dictate that an exception should be created, the evolution
of the law should not be stifled by rigid application of a
legal maxim.
[HN4] The doctrine of caveat emptor requires that a
buyer act prudently to assess the fitness and value of his
purchase and operates to [***8] bar the purchaser who
fails to exercise due care from seeking the equitable remedy of rescission (see, e.g., [HN5] Rodas v Manitaras,
159 AD2d 341). For the purposes of the instant motion to
dismiss the action pursuant to CPLR 3211 (a) (7), plaintiff is entitled to every favorable inference which may
reasonably be drawn from the pleadings ( Arrington v
New York Times Co., 55 NY2d 433, 442; Rovello v Orofino Realty Co., 40 NY2d 633, 634), specifically, in this
instance, that he met his obligation to conduct an inspection of the premises and a search of available public records with respect [*259] to title. It should be apparent,
however, that the most meticulous inspection and the
search would not reveal the presence of poltergeists at
the premises or unearth the property's ghoulish reputation
in the community. Therefore, there is no sound policy
reason to deny plaintiff relief for failing to discover a
state of affairs which the most prudent purchaser would
not be expected to even contemplate (see, Da Silva v
Musso, 53 NY2d 543, 551).
The case law in this jurisdiction dealing with the
duty of a vendor of real property to disclose information
to the buyer is distinguishable [***9] from the matter
under review. The most salient distinction is that existing cases invariably deal with the physical condition of
the premises (e.g., London v Courduff, supra [use as a
landfill]; Perin v Mardine Realty Co., 5 AD2d 685, affd 6
NY2d 920 [sewer line crossing adjoining property without owner's consent]), defects in title (e.g., Sands v Kissane, 282 App Div 140 [remainderman]), liens against
the property (e.g., Noved Realty Corp. v A. A. P. Co.,
supra), expenses or income (e.g., Rodas v Manitaras,
supra [gross receipts]) and other factors affecting its operation. No case has been brought to this court's attention in which the property value was impaired as the result of the reputation created by information disseminated to the public by the seller (or, for that matter, as a
result of possession by poltergeists).
[4] [HN6] Where a condition which has been created
by the seller materially impairs the value of the contract
and is peculiarly within the knowledge of the seller or
unlikely to be discovered by a prudent purchaser exercising due care with respect to the subject transaction, nondisclosure constitutes a basis for rescission [***10] as a
matter of equity. Any other outcome places upon the
buyer not merely the obligation to exercise care in his
purchase but rather to be omniscient with respect to any
fact which may affect the bargain. No practical purpose
is served by imposing such a burden upon a purchaser.
To the contrary, it encourages predatory business practice and offends the principle that equity will suffer no
wrong to be without a remedy.
Defendant's contention that the contract of sale, particularly the merger or "as is" clause, bars recovery of the
buyer's [**677] deposit is unavailing. Even [HN7] an
express disclaimer will not be given effect where the
facts are peculiarly within the knowledge of the party
invoking it ( Danann Realty Corp. v Harris, 5 NY2d 317,
322; Tahini Invs. v Bobrowsky, supra). Moreover, a fair
reading of the merger clause reveals that it expressly
[*260] disclaims only representations made with respect
to the physical condition of the premises and merely
makes general reference to representations concerning
"any other matter or things affecting or relating to the
aforesaid premises". As broad as this language may be, a
reasonable interpretation is that its effect [***11] is limited to tangible or physical matters and does not extend
to paranormal phenomena. Finally, if the language of the
contract is to be construed as broadly as defendant urges
to encompass the presence of poltergeists in the house, it
cannot be said that she has delivered the premises "vacant" in accordance with her obligation under the provisions of the contract rider.
To the extent New York law may be said to require
something more than "mere concealment" to apply even
the equitable remedy of rescission, the case of Junius
Constr. Corp. v Cohen (257 NY 393, supra), while not
precisely on point, provides some guidance. In that case,
the seller disclosed that an official map indicated two as
yet unopened streets which were planned for construction at the edges of the parcel. What was not disclosed
was that the same map indicated a third street which, if
opened, would divide the plot in half. The court held
that, while the seller was under no duty to mention the
planned streets at all, having undertaken to disclose two
Page 4
169 A.D.2d 254, *; 572 N.Y.S.2d 672, **;
1991 N.Y. App. Div. LEXIS 9873, ***
of them, he was obliged to reveal the third (see also,
Rosenschein v McNally, 17 AD2d 834).
In the case at bar, defendant seller deliberately fostered [***12] the public belief that her home was possessed. Having undertaken to inform the public-at-large,
to whom she has no legal relationship, about the supernatural occurrences on her property, she may be said to
owe no less a duty to her contract vendee. It has been
remarked that the occasional modern cases which permit
a seller to take unfair advantage of a buyer's ignorance so
long as he is not actively misled are "singularly unappetizing" (Prosser, Torts ß 106, at 696 [4th ed 1971]).
[HN8] Where, as here, the seller not only takes unfair
advantage of the buyer's ignorance but has created and
perpetuated a condition about which he is unlikely to
even inquire, enforcement of the contract (in whole or in
part) is offensive to the court's sense of equity. Application of the remedy of rescission, within the bounds of the
narrow exception to the doctrine of caveat emptor set
forth herein, is entirely appropriate to relieve the unwitting purchaser from the consequences of a most unnatural bargain.
Accordingly, the judgment of the Supreme Court,
New York [*261] County (Edward H. Lehner, J.), entered April 9, 1990, which dismissed the complaint pursuant to CPLR 3211 (a) (7), should be [***13] modified, on the law and the facts, and in the exercise of discretion, and the first cause of action seeking rescission of
the contract reinstated, without costs.
DISSENT BY: SMITH
DISSENT
Smith, J. (dissenting).
I would affirm the dismissal of the complaint by the
motion court.
Plaintiff seeks to rescind his contract to purchase defendant Ackley's residential property and recover his
down payment. Plaintiff alleges that Ackley and her real
estate broker, defendant Ellis Realty, made material misrepresentations of the property in that they failed to disclose that Ackley believed that the house was haunted by
poltergeists. Moreover, Ackley shared this belief with
her community and the general [**678] public through
articles published in Reader's Digest (1977) and the local
newspaper (1982). In November 1989, approximately
two months after the parties entered into the contract of
sale but subsequent to the scheduled October 2, 1989
closing, the house was included in a five-house walking
tour and again described in the local newspaper as being
haunted.
Prior to closing, plaintiff learned of this reputation
and unsuccessfully sought to rescind the $ 650,000 contract of sale and obtain [***14] return of his $ 32,500
down payment without resort to litigation. The plaintiff
then commenced this action for that relief and alleged
that he would not have entered into the contract had he
been so advised and that as a result of the alleged poltergeist activity, the market value and resaleability of the
property was greatly diminished. Defendant Ackley has
counterclaimed for specific performance.
"It is settled law in New York State that the seller of
real property is under no duty to speak when the parties
deal at arm's length. The mere silence of the seller,
without some act or conduct which deceived the purchaser, does not amount to a concealment that is actionable as a fraud (see, Perin v Mardine Realty Co., 5 AD2d
685, affd 6 NY2d 920; Moser v Spizzirro, 31 AD2d 537,
affd 25 NY2d 941). The buyer has the duty to satisfy
himself as to the quality of his bargain pursuant to the
doctrine of caveat emptor, which in New York State still
applies to real estate transactions." ( London v Courduff,
141 AD2d 803, 804 [1988], lv dismissed 73 NY2d 809
[1988].)
The parties herein were represented by counsel and
dealt at arm's length. This is evidenced [***15] by the
contract of sale which, inter alia, contained various riders and a specific provision [*262] that all prior understandings and agreements between the parties were
merged into the contract, that the contract completely
expressed their full agreement and that neither had relied
upon any statement by anyone else not set forth in the
contract. There is no allegation that defendants, by some
specific act, other than the failure to speak, deceived the
plaintiff. Nevertheless, a cause of action may be sufficiently stated where there is a confidential or fiduciary
relationship creating a duty to disclose and there was a
failure to disclose a material fact, calculated to induce a
false belief. ( County of Westchester v Becket Assocs.,
102 AD2d 34, 50-51 [1984], affd 66 NY2d 642 [1985].)
However, plaintiff herein has not alleged and there is no
basis for concluding that a confidential or fiduciary relationship existed between these parties to an arm's length
transaction such as to give rise to a duty to disclose. In
addition, there is no allegation that defendants thwarted
plaintiff's efforts to fulfill his responsibilities fixed by the
doctrine of caveat emptor. [***16] (See, London v
Courduff, supra, 141 AD2d, at 804.)
Finally, if the doctrine of caveat emptor is to be discarded, it should be for a reason more substantive than a
poltergeist. The existence of a poltergeist is no more
binding upon the defendants than it is upon this court.
Based upon the foregoing, the motion court properly
dismissed the complaint.
SELLER’S PROPERTY CONDITION DISCLOSURE
This is a legally binding document. If not understood, consult an attorney.
LISTING AGENT – COMPLETE THIS SECTION ONLY!
SELLER NAME__________________________________________________________________________(“Seller”)
PROPERTY ADDRESS_________________________________________________________________ (“Property”)
LISTING BROKERAGE________________________________________________________________(“Company”)
NOTICE FROM COMPANY
Buyer and Seller are advised that the Company and its agents are trained in the marketing of real estate. Neither the Company nor its agents
are trained or licensed to provide Buyer or Seller with professional advice regarding the physical condition of any property or regarding legal or
tax matters. The Company and its agents strongly recommend that in connection with any offer to acquire the Property, Buyer retain the
professional services of legal and/or tax advisors, property inspectors, surveyors, and other professionals to satisfy Buyer as to any and all
aspects of the physical and legal condition of the Property. BUYER IS ADVISED NOT TO RELY ON THE COMPANY, OR ON ANY AGENTS
OF THE COMPANY, FOR A DETERMINATION REGARDING THE PHYSICAL OR LEGAL CONDITION OF THE PROPERTY, including, but
not limited to, legal uses of the Property, the condition of any appliances, heating/cooling equipment and systems, plumbing and electrical
fixtures and equipment, moisture or other problems in the roof or foundation, sewer problems, the availability and location of utilities, the exact
square footage or acreage of the Property, or the location of property lines.
INSTRUCTIONS TO SELLER
SELLER IS OBLIGATED UNDER LAW TO DISCLOSE TO BUYERS DEFECTS IN THE PROPERTY AND FACTS KNOWN TO SELLER
THAT MATERIALLY AND ADVERSELY AFFECT THE USE AND VALUE OF THE PROPERTY THAT CANNOT BE DISCOVERED BY A
REASONABLE INSPECTION BY AN ORDINARY PRUDENT BUYER. This disclosure form is designed to assist Seller in complying with
these disclosure requirements. Please thoroughly disclose your actual knowledge regarding the condition of the Property. The Company,
other real estate agents, and buyers will rely on this disclosure form.
• Complete the remainder of this form.
• Please be specific when describing any past or present problems, malfunctions or defects (location, nature of problem, etc.). Use an
additional addendum if necessary.
• If a question does not apply to your Property, WRITE “N/A” NEXT TO THE QUESTION.
1. OCCUPANCY
Does Seller currently occupy the Property? If “No”, when did you last occupy the Property? _____________ (Appox. Date)
 Seller has never occupied the Property
2. USE OF PROPERTY
A.
Are you aware of any past or present non-conforming or illegal uses of the Property (such as renting the
Property in violation of local zoning laws, or renting the Property without a business license where such license
is required)? If “Yes”, please describe, to your knowledge, the nature of any such non-conforming or illegal use(s):
____________________________________________________________________________________________
B. Are you aware of any existing or threatened legal action affecting the Property? If “Yes”, please describe, to your
knowledge, the nature of any such legal action:_______________________________________________________
C. Are you aware of any past or present violations of any local, state, or federal law or regulation, or of any restrictive
covenants relating to the Property? If “Yes”, please describe, to your knowledge, the nature of any such violations:
 Yes  No
 Yes  No
 Yes  No
 Yes  No
______________________________________________________________________________
D. To your knowledge, is any portion of the Property presently assessed, for property tax purposes, as “Greenbelt”?
3. ROOF
A.
B.
Are you aware of any past or present leaks in the roof? If “Yes”, please describe, to your knowledge, the nature and
location of any past or present leaks:________________________________________________________________
Other than leaks, are you aware of any past or present problems or defects with the roof, for example, structural issues
Page 1 of 6
Seller’s Initials _________________ Date____________________
 Yes  No
 Yes  No
Buyer’s Initials _________________ Date____________________
dry rot, moisture and/or ice damage, etc? If “Yes”, please describe, to your knowledge, the nature and location of any
past or present problems or defects with the roof:_______________________________________________________
______________________________________________________________________________________________
C. Has all or any portion of the roof been repaired or replaced during your ownership? If “Yes”, please describe, to your
knowledge, the nature of any roof repairs or replacements:_______________________________________________
_____________________________________________________________________________________________
D. To your knowledge, are there any written warranties presently in place for the roof? If “Yes”, please attach copies of
any warranties in your possession.
 Yes  No
 Yes  No
 Yes  No
4. NATURAL GAS, ELECTRICITY, TELEPHONE, CABLE TV
Are you aware of any past or present problems with utility service to the Property or with any of the utility service systems,
for example, poor telephone reception, etc? If “Yes”, please describe, to your knowledge, the nature of any past or present
problems with utility service or utility systems:_____________________________________________________________
5. WATER
Culinary water service for the Property is provided by (check applicable box):  Public Water  Private Water Company 
A. (Name of Public or Private water service provider):___________________________________________. If water service
is provided by a Private Water Company, please attach a copy of any water certificates in your possession.
B. If water service is provided by a Private Water Company, to your knowledge, are water share assessments paid in full?
C. Are you aware of any past or present problems with any water service provided to the Property by the Public or Private
Water service provider, for example, water quality, inadequate or excessive water pressure, etc? If “Yes”, please
describe, to your knowledge, the nature of any such problems:_____________________________________________
D. Is a well presently located on the Property?
E. If a well is located on the Property, are you aware of any past or present problems with the well, for example, water
quality, inadequate water pressure, faulty pump, etc? If “Yes”, please describe, to your knowledge, the nature of any
such problems:__________________________________________________________________________________
F. To your knowledge, is your water right for the well represented by a contract with a special improvement or water
conservancy district? If “Yes”, what is the number of the district contract?____________________________________
G. If your water right for the well is not based on a contract with a special improvement or water conservancy district,
to your knowledge, what is the State Engineer “Index Number” for your water right? ______-____________
 Yes  No
Private Well
 Yes  No
 Yes  No
 Yes  No
 Yes  No
 Yes  No
6. SEWER/SEPTIC TANK
A. Sewer service for the Property will be provided by (check applicable box):  Public Sewer  Septic Tank
B. If Public Sewer, who is the Public Sewer provider?________________________________________________________
C. With the exception of an occasional clogged drain or toilet, are you aware of any past or present problems with the
sewer or septic service or components, for example, broken sewer lines, consistently slow or clogged drains, etc? If “Yes”,  Yes  No
please describe, to your knowledge, the nature of any such problems:_________________________________________
________________________________________________________________________________________________
D. If the Property is serviced by a septic tank, to your knowledge, has the tank been inspected and/or pumped within the
past five years?
 Yes  No
7. HEATING/COOLING
Are you aware of any past or present problems with any of the heating or air-conditioning equipment, components
or systems, for example, baseboard-heating unit doesn’t work, inadequate forced air from specific vent, etc? If “Yes”,
please describe, to your knowledge, the nature of any such problems:___________________________________________
__________________________________________________________________________________________________
 Yes  No
8. EQUIPMENT
Are you aware of any past or present problems with any of the following: air purifier, audio system, central vacuum, computer
network, fire sprinkling system, automatic garage door opener, humidifier, intercom, media system, satellite dish & components,
security system, smoke alarm, tv antenna, water heater, water purifier, water softener, range hood, attic vent fans, bathroom
vent fans, or propane tanks? If “Yes”, please describe, to your knowledge, the nature of any such problems, for example,
 Yes  No
audio system doesn’t work, central vacuum doesn’t work, etc? __________________________________________________
9. APPLIANCES
Are you aware of any past or present problems with any of the following: dishwasher, disposal, dryer, freezer, indoor grill, microwave, oven, range, refrigerator, trash compactor, washer? If “Yes”, please describe, to your knowledge, the nature of any such  Yes  No
problems, for example, disposal doesn’t work, etc? ____________________________________________________________
Page 2 of 6
Seller’s Initials _________________ Date____________________
Buyer’s Initials _________________ Date____________________
10. FIREPLACES/STOVES
Are you aware of any past or present problems with any of the following: fireplace insert, gas fireplace, gas fireplace starter,
woodburning fireplace, potbelly/wood stove, or pellet stove? If “Yes”, please describe, to your knowledge, the nature of any
 Yes  No
such problems, for example, gas fireplace starter doesn’t work, damper not working, etc?_______________________________
11. INTERIOR FEATURES
Are you aware of any past or present problems with any of the following: ceiling fans, dumb waiter, elevator, flooring (stone,
marble, hardwood, etc.), jetted bathtub(s), indoor pool, spa/hot tub, sauna, skylights, steam room/shower, or wet bar? If “Yes”,  Yes  No
please describe, to your knowledge, the nature of any such problems, for example, pump for jetted bathtub doesn’t work,
skylights leak, etc?___________________________________________________________________________
12. EXTERIOR & EXTERIOR FEATURES
A.
B.
Are you aware of any past or present problems with any of the following: gas barbeque, heated driveway or walkway,
lawn sprinkler system, pool, spa/hot tub, roof heat tape, or rain gutters? If “Yes”, please describe, to your knowledge,
the nature of any such problems, for example, spa/hot tub leaks, heated driveway only works on portion of driveway, etc?
_______________________________________________________________________________________________
With the exception of regular maintenance of the exterior surfaces of the Property (painting, staining, etc.), are you aware
of any past or present problems with any portion of the exterior, for example, moisture damage behind stucco, etc?
 Yes  No
 Yes  No
If “Yes”, please describe, to your knowledge, the nature of any such problems:_________________________________
13. TERMITES/DRY ROT/PESTS
A.
Are you aware of any past or present problems with termites, dry rot, rodents, or pests on or affecting the Property? If
“Yes”, please describe, to your knowledge, the nature and location of any such problems:_______________________
______________________________________________________________________________________________
B. Are you aware of any damage to the Property caused by termites, dry rot, rodents, or pests? If “Yes”, please describe,
to your knowledge, the nature and location of any such damage, and any efforts to mitigate such damage:__________
______________________________________________________________________________________________
C. To your knowledge, are there any written warranties or other termite or pest control coverage presently in place for the
Property? If “Yes”, please attach any copies of such warranties in your possession.
 Yes  No
 Yes  No
 Yes  No
14. ADDITIONS/REMODELS
A.
B.
With the exception of cosmetic upgrades to the Property (such as carpet, paint, wallpaper, etc.), have you remodeled,
made any room additions, made structural modifications or other alterations or improvements to the Property? If “Yes”,
please describe, to your knowledge, the nature of any such remodel/alteration work:___________________________
______________________________________________________________________________________________
To your knowledge, did any former owners make any additions, structural changes, or other alterations to the Property?
If “Yes”, please describe, to your knowledge, the nature of any such remodel/alteration work:____________________
______________________________________________________________________________________________
 Yes  No
 Yes  No
15. STRUCTURAL ITEMS & SOILS
A.
Are you aware of any settlement or heaving of soil on the Property or on any adjoining Property (collapsible or expansive
soils, poorly compacted fill)? If “Yes”, please describe, to your knowledge, the nature and location of any settlement or
heaving of soil:__________________________________________________________________________________
B. Are you aware of any sliding or earth movement on the Property or on any adjoining Property (landslides, falling rocks,
debris or mud flows)? If “Yes”, please describe, to your knowledge, the nature and location of any sliding or earth
movement:______________________________________________________________________________________
C. Are you aware of any past or present movement, shifting, deterioration, or other problems with the walls or foundation?
If “Yes”, please describe, to your knowledge, the nature and location of any such shifting, problems, etc:____________
_______________________________________________________________________________________________
D. To your knowledge, does any portion of the Property contain any subsurface, man-made debris that has been buried,
covered or abandoned, including without limitation, any discarded or abandoned construction materials, concrete footings
or foundations, trash, etc? If “Yes”, please describe the nature and location of such subsurface debris:______________
________________________________________________________________________________________________
E. Please describe, to your knowledge, any action taken to repair or mitigate any of the issues described in 15A through 15D:
________________________________________________________________________________________________
F. Are you aware of any geologic, soils or engineering reports that have been prepared for the Property? If “Yes”, please
attach a copy of any such reports in your possession.
Page 3 of 6
Seller’s Initials _________________ Date____________________
 Yes  No
 Yes  No
 Yes  No
 Yes  No
 Yes  No
Buyer’s Initials _________________ Date____________________
16. BOUNDARIES & EASEMENTS
A.
Do you know if anything on your Property (such as a fence, deck, or any other improvement) encroaches (extends)
onto any adjoining property? If “Yes”, please describe, to your knowledge, the nature and approximate location of any
such encroachment:______________________________________________________________________________
B. Do you know if anything on any adjoining property (such as a fence, deck, or any other improvements) encroaches
onto your Property? If “Yes”, please describe, to your knowledge, the nature and approximate location of any such
encroachment:__________________________________________________________________________________
C. Are you aware of any boundary disputes or conflicts involving your Property and any adjoining property or properties?
If “Yes”, please describe, to your knowledge, the nature of any such boundary disputes or conflicts: _______________
______________________________________________________________________________________________
D. Are you aware of any unrecorded easements affecting the Property? If “Yes”, please describe, to your knowledge, the
nature and approximate location of any such easements:________________________________________________
 Yes  No
 Yes  No
 Yes  No
 Yes  No
17. ELECTRICAL
Are you aware of any past or present problems with any electrical switches, outlets and/or any portion of the electrical
system? If “Yes”, please describe, to your knowledge, the nature of any such problems:___________________________
_________________________________________________________________________________________________
 Yes  No
18. MOLD
A.
B.
With the exception of any occasional accumulation of mold and mildew in bathroom shower, tub and sink areas, are
you aware of any past or present mold on walls, ceilings, floors, or any other interior portion of the Property? If “Yes”,
please describe, to your knowledge, the nature and location of any such mold:_______________________________
Have you had the Property inspected for the existence of any mold? If “Yes”, please describe, to your knowledge,
the results of the inspection, and attach copies of any inspection reports in your possession:____________________
_____________________________________________________________________________________________
 Yes  No
 Yes  No
19. OTHER MOISTURE CONDITIONS
A.
In reference to the basement and/or crawlspace, are you aware of any past or present water leakage, water accumulation
or dampness? If “Yes”, please describe, to your knowledge, the nature of any such water leakage, accumulation or
dampness:____________________________________________________________________________________
B. Are you aware of any past or present water or moisture-related damage caused by: flooding; lot drainage; moisture
seepage or condensation; sewer overflow/backup; leaking or broken pipes, pipe fittings, or plumbing fixtures; or leaking
appliances, fixtures, or equipment? If “Yes”, please describe, to your knowledge, the nature and location of any such
water or moisture-related damage:_________________________________________________________________
C. Please describe, to your knowledge, any attempts to repair any moisture-related damage and/or to prevent any
recurrence of water and moisture-related problems on the Property:________________________________________
D. Are you aware of any wetlands located on the Property? If “Yes”, please describe, to your knowledge, the nature and
location of any wetlands on the Property:____________________________________________________________
E. Are you aware of any attempts to mitigate any wetland issues through the Army Corps of Engineers? If “Yes”, please
describe:______________________________________________________________________________________
 Yes  No
 Yes  No
 Yes  No
 Yes  No
20. HAZARDOUS CONDITIONS
A.
With the exception of methamphetamines (see Section 20.C below), are you aware of any past or present hazardous
conditions, substances, or materials on the Property, such as asbestos, lead-based paint, methane gas, radon gas,
radioactive or toxic materials, or ureaformaldehyde foam insulation, buried storage tanks and lines? If “Yes”, please
describe, to your knowledge, the nature of any such hazardous conditions:___________________________________
 Yes  No
______________________________________________________________________________________________
B. Please describe, to your knowledge, any attempts to mitigate any such hazardous condition(s):___________________
______________________________________________________________________________________________
C. To your knowledge, is the Property currently contaminated from the use, storing or manufacturing of methamphetamines?  Yes  No
21. HOMEOWNERS ASSOCIATION
A. Is the Property part of a condominium or other homeowner’s association (HOA)?
 Yes  No
B. Does the HOA levy dues or assessments for maintenance of common areas and/or other common expenses?
 Yes  No
C. For questions regarding the HOA, including past, present or future dues or assessments, or regarding financial statements,
bylaws, HOA meetings and minutes, information may be obtained from the following:
(Name)____________________________________(Address)_____________________________________________
Page 4 of 6
Seller’s Initials _________________ Date____________________
Buyer’s Initials _________________ Date____________________
__________________________________________(Phone)______________________________________________
BY SIGNING THIS DISCLOSURE FORM, SELLER AUTHORIZES THE RELEASE OF HOA INFORMATION TO BUYER
AND/OR TO BUYER’S AGENT.
22. UNPAID ASSESSMENTS
A.
B.
Are you aware of any HOA, municipal, special improvement district or other assessments that are presently owing
against the Property? If “Yes”, please describe, to your knowledge, the nature and amount of any such unpaid
assessments:_____________________________________________________________________________________
Are you aware of any HOA, municipal, or special improvement district assessments that have been approved but
not yet levied against the Property? If “Yes”, please describe, to your knowledge, the nature and amount of any such
approved, but not yet levied, assessments:______________________________________________________________
23. INSURANCE
A.
B.
During your ownership of the Property, have you filed any insurance claims based on loss or damage to the Property? If
“Yes”, please describe, to your knowledge, the nature of any such claims:____________________________________
If the Property is part of a condominium or other homeowner’s association, do you know if the HOA has filed any
insurance claims for loss or damage to any portion of the development? If “Yes”, please describe, to your knowledge,
the nature of any such claims:_______________________________________________________________________
 Yes  No
 Yes  No
 Yes  No
 Yes  No
SQUARE FOOTAGE/ACREAGE
Seller represents that any figures provided by Seller in any documents regarding the square footage or acreage of the Property are not based on any
personal measurement by Seller. If the square footage or acreage of the Property is of material concern to Buyer, Buyer is advised to verify the square
footage or acreage through any independent sources or means deemed appropriate by Buyer. BUYER IS ADVISED NOT TO RELY ON SELLER, THE
COMPANY, OR ANY AGENTS OF THE COMPANY FOR A DETERMINATION REGARDING THE SQUARE FOOTAGE OR ACREAGE OF THE
PROPERTY.
VERIFICATION BY SELLER
Seller verifies that Seller has prepared this disclosure form and that the information contained herein is accurate and complete to the best of
Seller’s actual knowledge as of the date signed by Seller below. SELLER UNDERSTANDS AND AGREES THAT SELLER WILL UPDATE
THIS DISCLOSURE FORM IF ANY INFORMATION CONTAINED HEREIN BECOMES INACCURATE OR INCORRECT IN ANY WAY. Seller
authorizes the Company to provide copies of this disclosure form to prospective buyers, and to real estate brokers and agents. This disclosure
form is not a warranty of any kind. If Buyer and Seller enter into a sales contract for the Property, and such sales contract includes, excludes,
or warrants the condition of any item referenced herein, then to the extent there is a conflict between the sales contract and any
representations contained herein, the terms of the sales contract shall control.
Seller:__________________________ Date:________________
Seller:___________________________ Date:_________________
ACKNOWLEDGEMENT OF RECEIPT BY BUYER
Buyer’s signature below acknowledges Buyer’s receipt of a copy of this disclosure form.
Buyer:__________________________ Date:________________
Buyer:___________________________ Date:_________________
**********************************************************************
DISCLOSURE FORM UPDATE
The above disclosure form was reviewed and updated by Seller on the date signed by Seller below. (Check Applicable Boxes)
 There are no changes in the above disclosure form;  The above disclosure form has been changed as follows:____________________
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
and/or  The above disclosure form has been changed as noted an attached Addendum No. ____ to this disclosure form.
Seller:__________________________ Date:________________
Seller:___________________________ Date:_________________
This form is COPYRIGHTED by the UTAH ASSOCIATION OF REALTORS® for use solely by its members. Any unauthorized use, modification,
copying or distribution without written consent is prohibited. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF
Page 5 of 6
Seller’s Initials _________________ Date____________________
Buyer’s Initials _________________ Date____________________
ANY PROVISION OF THIS FORM IN ANY SPECIFIC TRANSACTION. IF YOU DESIRE SPECIFIC LEGAL OR TAX ADVICE, CONSULT AN
APPROPRIATE PROFESSIONAL.
COPYRIGHT© UTAH ASSOCIATION OF REALTORS® 1994 - REVISED – 12.01.07 – ALL RIGHTS RESERVED
Page 6 of 6
Seller’s Initials _________________ Date____________________
UAR FORM 10
Buyer’s Initials _________________ Date____________________
Section 4
Page 1
Stanley B. and Jody J. SECOR, et al., Plaintiffs and Respondents, v. Jesse KNIGHT
and Michele Knight, Defendants, Third-Party Plaintiffs and Appellants, v. Leon and
Karen F. Peterson, and Guardian Title Company, a Utah corporation, Third-Party
Defendants and Respondents
No. 18665
Supreme Court of Utah
716 P.2d 790; 29 Utah Adv. Rep. 15; 1986 Utah LEXIS 759
March 3, 1986, Filed
COUNSEL: [**1]
(Knight) for Plaintiffs.
Brandt Wall, Salt Lake City
Theodore F. Kanell, Salt Lake City (Secor),
Richard K. Hincks, Steven H. Stewart, Salt Lake City
(Petersen),
Gretta C. Spendlove, Salt Lake City (Guardian) for Defendant.
JUDGES: Durham, Justice, wrote the opinion. We concur: Gordon R. Hall, Chief Justice, I. Daniel Stewart,
Justice, Richard C. Howe, Justice, Michael D. Zimmerman, Justice.
OPINION BY: DURHAM
OPINION
[*791] Defendants Jesse and Michele Knight appeal from an order which enjoined the operation of a
basement rental apartment in the Knights' home. Plaintiffs who are residents of the subdivision, brought the
action for injunction on the ground that defendants were
violating a restrictive covenant limiting buildings in the
subdivision to single-family dwellings. Plaintiffs alleged
that defendants' lot was subject to that restriction. Defendants answered and filed third-party complaints against
the developers of the subdivision, alleging fraud, and
against the title company which handled the closing on
the sale of the lot, alleging breach of fiduciary duty. The
trial court entered judgment for plaintiffs, enjoining de-
fendants from further operation of any apartment in their
[**2] home. The court also ordered judgment in favor of
the developers on the basis of no-cause of action and
dismissed with prejudice the complaint against the title
company. We affirm.
In 1978, the Knights purchased a lot in the Manor
Estates subdivision from the Petersons, the developers of
the project. Before purchasing the lot, the Knights met
with a sales agent for the subdivision, David Goates, and
discussed their interest in purchasing a lot. In that discussion, the Knights specifically indicated their desire and
intent to build a house with a basement apartment.
Friends of the Knights, Mr. and Mrs. Erickson, were also
present at that meeting and expressed the same interest.
Both couples ultimately bought lots in the subdivision.
The evidence, which is conflicting, appears to indicate that at the meeting between the Knights, the Ericksons, and Mr. Goates on April 3, 1978, Mr. Goates stated
that the developer wanted homes with 1,500 square feet
and attached garages. Goates further stated that the developer had originally considered multiple units such as
apartments and condominiums as a possible use in the
subdivision, but that it had been decided that duplexes
would not be allowed. [**3] The evidence also indicates, however, that the exact nature of the restrictions to
be imposed was unclear and that Mr. Goates implied that
there would be no problem with having a separate apartment in the basement. Further, he told the Knights and
their friends that he was aware of situations in which
people in other [*792] subdivisions had built basement
apartments, despite restrictions prohibiting them, and
that there were no problems because the neighbors took
Page 2
716 P.2d 790, *; 29 Utah Adv. Rep. 15;
1986 Utah LEXIS 759, **
no action. At trial, Mr. Goates testified that he had specifically told defendants that if they built an apartment to
be used for nonfamily member, defendants would do so
at their own risk. The trial court ultimately determined
that as a result of this conversation the Knights were on
notice that duplexes would not be allowed, although the
court also found that the statements made by the agent
were misleading and were made in order to accomplish
the sale.
At the conclusion of the meeting with Mr. Goates,
the Knights decided to buy a lot and entered into an earnest money agreement on April 3, 1978. The earnest
money agreement made no reference to restrictive covenants, although it did contain a statement which provided
[**4] "that execution of the final contract shall abrogate
this Earnest Money Receipt and Offer to Purchase."
At the time the earnest money agreement was
signed, the area was zoned for multiple units, and neither
the subdivision plat nor the restrictive covenants had
been recorded. More than two months later, on June 10,
1978, the subdivision plat was recorded, and on June 20,
1978, the restrictive covenants were recorded whereby
land use in Manor Estates was restricted to single-family
dwellings. The Knights were not notified of these actions. On June 27, 1978, the Knights attended a closing
at the offices of third-party defendant Guardian Title
Company. There was no discussion regarding restrictive
covenants at that time. Although there was some testimony that the Knights did not see or read the deed at the
closing and that they did not receive a copy of the restrictive covenants, the trial court found, based on other testimony, that at the closing the Knights received a warranty deed which referred to "restrictions of record." The
deed was recorded on July 5, 1978.
Subsequently, the Knights obtained financing and a
building permit for a home. They later obtained a building permit for [**5] the basement apartment, apparently
after the construction of the apartment. During this period, the Knights never inquired into the existence of any
restrictions on the use of their land. The Knights began
rental of the apartment in the summer of 1980. In October 1980, plaintiffs filed this suit asking for an injunction
against further violation of the restrictive covenants by
operation of the basement apartment.
The primary issue before this Court is whether, under the circumstances of this case, the restrictive covenant limiting use to a single-family dwelling is enforceable as to the Knights. For the reasons stated below, we
hold that it is.
In their appeal, the Knights claim that based on the
earnest money agreement they had acquired a vested
equitable interest in the property and that any modification in that interest, i.e., the imposition of restrictive
covenants, required their express consent. In opposing
the Knights' claim, the Secors, plaintiffs below, and the
Petersons, third-party defendants, assert the doctrine of
merger, which this Court recognizes. See, e.g., Espinoza
v. Safeco Title Insurance Co., Utah, 598 P.2d 346
(1979). They correctly state the general [**6] rule,
which is that on delivery and acceptance of a deed the
provisions of the underlying contract for the coveyance
are deemed extinguished or superseded by the deed.
Thus, the underlying contract merges into the deed.
Stubbs v. Hemmert, Utah, 567 P.2d 168, 169 (1977); 3
Corbin, Contracts ß 604, at 627 (1960); Annot., 38
A.L.R.2d 1310, 1312-13 (1954); Annot., 84 A.L.R. 1008,
1009 (1933). The basis for imposing the doctrine of
merger is "not due to any peculiar sanctity attaching to
the deed itself, but because it is regarded as the final repository of the agreement which led to its execution." 84
A.L.R. at 1009.
The defense of so severe a rule [merger]
must rest on the ground that in conveyances of land, the parties habitually put
their full agreement in the deed, at least
with reference to title and that if it is intended that the vendor shall be responsible [*793] for defective title, a warranty
is inserted.
S. Williston, Contracts ß 926, at 783 (3d ed. 1961) (footnote omitted). There are, however, certain exceptions to
this doctrine, including fraud, mistake, and the existence
of collateral rights in the contract of sale. Annot., 38
A.L.R.2d at [**7] 1315. In cases relating to collateral
terms, courts generally find that the execution and delivery of a deed is not the intended performance of those
specific terms and that therefore the terms are not extinguished by acceptance of the deed. For example, in
Stubbs v. Hemmert, this Court found that the terms in the
underlying contract relating to the removal of air compressors from a piece of property were collateral to the
agreement to convey the property and were therefore not
extinguished by the deed. 567 P.2d at 170. See also Kelsey v. Hansen, 18 Utah 2d 226, 419 P.2d 198 (1966)
(recognizing the existence of cases in equity which result
in nonmerger, but declining to apply nonmerger under
the facts of that case). In this record, covenants relating
to title and encumbrances are not considered to be collateral because they relate to the same subject matter
does the deed. See Annot., 84 A.L.R. at 1009, 1017.
In arguing against the application of the merger doctrine in this case, the Knights claim that the intent of the
parties must be examined. The Knights further assert that
the evidence clearly indicates that merger would be inconsistent with their intent. While the [**8] latter asser-
Page 3
716 P.2d 790, *; 29 Utah Adv. Rep. 15;
1986 Utah LEXIS 759, **
tion may be correct, the Knights misconstrue the significance of intent as it generally relates to merger. Although
intent may be an issue where a specific term in the original contract of sale is omitted in the deed, see Annot., 38
A.L.R.2d at 1313, the intent issue arises primarily in
cases focusing on terms which involve a different subject
matter or are collateral to the conveyance, see id. In such
cases the question of whether a specific term is or is not
collateral, and hence whether the term will or will not
merge into the deed, is determined by the intent of the
parties. The Utah cases cited by the Knights in support of
their intent argument all involve the issue of collateral
terms. Baxter v. Stubbs, Utah, 620 P.2d 68 (1980);
Bowen v. Olsen, Utah, 576 P.2d 862 (1978); Stubbs v.
Hemmert, Utah, 567 P.2d 168 (1977). In Stubbs v.
Hemmert, this Court explained the operation of the
merger doctrine and the significance of the intent of the
parties in cases involving the collateral terms exception:
The doctrine of merger, which this
Court recognizes, is applicable when the
acts to be performed by the seller in a
contract relate only to the delivery [**9]
of title to the buyer. Execution and delivery of a deed by the seller then usually
constitute full performance on his part,
and acceptance of the deed by the buyer
manifests his acceptance of that performance even though the estate conveyed
may differ from that promised in the antecedent agreement. Therefore, in such a
case, the deed is the final agreement and
all prior terms, whether written or verbal,
are extinguished and unenforceable.
However, if the original contract calls
for performance by the seller of some act
collateral to conveyance of title, his obligations with respect thereto survive the
deed and are not extinguished by it.
Whether the terms of the contract are collateral, or are part of the obligation to
convey and therefore unenforceable after
delivery of the deed, depends to a great
extent on the intent of the parties with respect thereto.
567 P.2d at 169 (footnotes omitted). As this case involves terms relating to title, which are not collateral, the
Knights' reliance on intent is misplaced.
The Knights also seek relief based on allegations of
fraud on the part of the Petersons. In reviewing the record we note the following: (1) the Knights explicitly
communicated [**10] their desire to build a basement
apartment for rental purposes; (2) in response, the Petersons' agent made some misleading statements regarding
the building restrictions and potential problems associated with operating a rental apartment; [*794] (3) the
earnest money agreement, which culminated the discussion between the Knights and the agent, made no reference to restrictive covenants; (4) the restrictive covenants
were later drawn up and recorded by the sellers just prior
to closing; (5) at closing there was no mention of the
restrictions; and (6) there is no evidence to indicate that
the Knights received a copy of the restrictions, although
they did receive a deed which referred to "restrictions of
record." These facts present a reasonable argument for
the possible conclusion that there was fraud on the part
of the sellers, and admittedly this is not a clear cut case.
However, in order to prevail on a claim of fraud, all the
elements of fraud must be established by clear and convincing evidence. Cheever v. Schramm, Utah, 577 P.2d
951, 954 (1978). Those elements are:
(1) a representation; (2) concerning a
presently existing material fact; (3) which
was false; (4) [**11] which the representer either (a) knew to be false, or (b) made
recklessly, knowing that he had insufficient knowledge on which to base such
representation; (5) for the purpose of inducing the other party to act upon it; (6)
that the other party, acting reasonably and
in ignorance of its falsity; (7) did in fact
rely upon it; (8) and was thereby induced
to act; (9) to his injury and damage.
Dugan v. Jones, Utah, 615 P.2d 1239, 1246 (1980)
(footnote omitted). Despite conflicting evidence, the trial
court specifically found that the Knights were on notice
that duplexes would not be permitted and, further, that
the Knights failed to reasonably rely on the statements of
the real estate agent. Those findings negate the existence
of elements six and seven listed above.
In reviewing an equity case such as this, it is our
prerogative "to weigh the facts as well as to review the
law." Jensen v. Brown, Utah, 639 P.2d 150, 151 (1981).
However, "where the evidence is in conflict this Court
will not upset the findings in the trial court unless the
evidence so clearly preponderates against them that this
Court is convinced that a manifest injustice has been
done." Horton v. Horton, [**12] Utah, 695 P.2d 102,
105 (1984). The record reveals, among other things, that
the testimony as to what the real estate agent told the
Knights is uncertain and contradictory. Thus, we cannot
say that the evidence so clearly preponderates against the
trial court's findings that a manifest injustice has occurred. We must therefore uphold the court's findings
Page 4
716 P.2d 790, *; 29 Utah Adv. Rep. 15;
1986 Utah LEXIS 759, **
and conclude that the Knights failed to establish all the
requisite elements of fraud. In the absence of fraud, the
merger doctrine applies, and we hold that the restrictive
covenants are enforceable against the Knights.
In reaching this holding, however, we do not condone the manner in which this transaction was conducted
by the developers/sellers, the Petersons, and their agent,
Mr. Goates. Although the trial court found that as a result
of the conversation with Mr. Goates, the Knights were on
notice that duplexes would not be permitted, it is our
opinion that under these circumstances it would have
been proper to give the Knights explicit notice of the
imposition of the restrictive covenants. See Jones v.
Garden Park Homes Corp., Mo. 393 S.W.2d 501, 505
(1965). On execution of the earnest money agreement,
the parties entered [**13] into a binding contract, Cahoon v. Cahoon, Utah, 641 P.2d 140, 143 (1982); Bunnell v. Bills, 13 Utah 2d 83, 87, 368 P.2d 597, 600-01
(1962); see also Century 21 All Western Real Estate v.
Webb, Utah, 645 P.2d 52, 55 (1982), and pursuant to that
contract both parties acquired rights and duties. On that
basis, the developers should have notified the Knights on
or prior to delivery of the deed. The failure to so notify
the Knights cannot change the result in this case because
of the operation of the merger doctrine, an admittedly
harsh rule of law, but in our view such action on the part
of the developers would have prevented the dispute and
would therefore have averted this litigation.
Furthermore, we believe it appropriate to censure the
developers on other grounds as well, although the application of the merger doctrine in this case is likewise not
affected [*795] by the following observations. The major justification for adherence to the merger doctrine is
that upholding merger, in all but the exceptional cases
involving fraud, mistake or collateral terms, preserves
the integrity of the final document of conveyance and
encourages the diligence of the parties. That [**14] diligence involves a duty on the part of both parties to make
certain that their agreements have in fact been fully included in the final document In this regard, the Knights
may have been less than diligent in failing to protect
their rights by reading their deed and inquiring about it
provisions. Such lack of diligence on the part of the
Knights had the effect of exposing them to the harsh result we reach today. However, the lack of diligence does
not negate the fact that both Mr. Peterson, a licensed real
estate broker, and Mr. Goates, a licensed real estate sales
agent, had a duty to conduct the sales transaction honestly and fairly.
Under Utah law, the general rule is no
fiduciary obligations exist between a
buyer and seller of any property. A real
estate agent, however, does not occupy
the position of a lay vendor of property.
An agent is licensed by the state and is required to meet standards of "honesty, integrity, truthfulness, reputation, and competency." A real estate license may be revoked if the licensee is unable or unworthy to safeguard the interests of the public.
....
In this state, it is apparent that the
rule of caveat emptor does not apply to
those dealing [**15] with a licensed real
estate agent. Though not occupying a fiduciary relationship with prospective purchasers, a real estate agent hired by the
vendor is expected to be honest, ethical,
and competent and is answerable at law
for breaches of his or her statutory duty to
the public.
Dugan v. Jones, Utah, 615 P.2d 1239, 1248 (1980)
(footnotes omitted). By obfuscating the nature of the
restriction to be imposed, by unilaterally inserting the
reference in the deed to restrictions of record which had
only been recorded a few days before closing, and then
by failing in any way to point out the modification inserted in the deed, the sellers' actions were seriously deficient in relation to the duty owed to the public in general and to the Knights in particular. In our view, the
entire course of dealing in this transaction was substandard. 1
1 We further note in passing, as the issue was
not raised by the parties in this matter, that Utah
has adopted legislation which deals with sales of
subdivided lands. U.C.A., 1953, ßß 57-11-1 to -21
(1974 and Supp. 1985). Under the provisions of
that legislation, the purchaser is entitled to a
summary of all encumbrances and restrictions affecting the land in question, id. at ß 57-11-7(1)
(c) (1974), prior to signing a contract, id. at ß 5711-5(3) (Supp. 1985). The intent of the legislation
is to prevent "fraud and sharp practices in a type
of real estate transaction peculiarly open to such
abuses." Wallis v. Thomas, Utah, 632 P.2d 39, 41
(1981). Although those statutes do not determine
the outcome of this case, they indicate the public
policy of holding sellers of subdivided lands to a
high standard of fair dealing.
Similarly, other states have, on the basis of
public policy, imposed upon real estate brokers
the duty to deal fairly and honestly, despite the
fact that the broker is acting primarily as the
Page 5
716 P.2d 790, *; 29 Utah Adv. Rep. 15;
1986 Utah LEXIS 759, **
seller's agent. See Note, Real Estate Brokers' Duties to Prospective Purchasers, 1976 B.Y.U. L.
Rev. 513, 514-15. We also note with approval
cases from California which focus on the status
and responsibilities of real estate brokers, particularly in the area of disclosure of information.
Failure to communicate accurate or complete information has been grounds for relief based on
fraud, Cooper v. Jevne, 56 Cal. App. 3d 860, 128
Cal. Rptr. 724 (1976); Brady v. Carman, 179 Cal.
App. 2d 63, 3 Cal. Rptr. 612 (1960), and on negligence, Easton v. Strassburger, 152 Cal. App. 3d
90, 199 Cal. Rptr. 383 (1984). In Easton, the
court stated that the underlying purposes for imposing a duty to disclose "are to protect the buyer
from the unethical broker and seller and to insure
that the buyer is provided sufficient accurate information to make an informed decision whether
to purchase." Id. at 99, 199 Cal. Rptr. at 388.
Further, the court noted that misplaced reliance
on the broker can result in substantial injury to
the buyer. Id. at 100-01, 199 Cal. Rptr. 388-89.
Thus, in Easton, the court upheld the following
instruction:
"A real estate broker is a licensed person or entity who holds
himself out to the public as having
particular skills and knowledge in
the real estate field. He is under a
duty to disclose facts materially
affecting the value or desirability
of the property that are known to
him or which through reasonable
diligence should be known to
him."
Id. at 98, 199 Cal. Rptr. at 387.
[**16]
Notwithstanding the deficiencies in the
sellers' course of dealing, the Knights [*796] failed to
establish fraud in this case, and in the absence of fraud
the merger doctrine applies. Therefore we affirm the
judgment of no cause of action against the Petersons, and
we uphold the injunction ordered by the trial court.
Finally, the Knights have appealed from the dismissal of the breach of fiduciary duty action against
Guardian Title. The trial court found no fiduciary relationship existed between the Knights and Guardian, and
our review of the record indicate ample evidentiary support for that finding. We therefore also affirm the dismissal of the action against Guardian Title Company.
WE CONCUR: Gordon R. Hall, Chief Justice, I.
Daniel Stewart, Justice, Richard C. Howe, Justice, and
Michael D. Zimmerman, Justice.
Page 1
CHAPTER 6
Jerald E. Mason; Miriam P. Mason; Lewis A. Peterson and Betty Jo Peterson, as
trustees of the Lewis and Betty Jo Peterson Family Trust; Spencer F. Eccles; Cleone
P. Eccles; John H. Bryan; and Catherine P. Bryan, Plaintiffs and Appellees, v.
Sheldon Leroy Loveless and Janice P. Loveless, as co-trustees of the Sheldon and
Janice Loveless Trust; Tod Aleamoni; Anna King; Patrick Jenkins; Dean Verholtz;
and Joseph L. Adamson, Defendants and Appellants. Formen Corporation and
Backman Title Company, Defendants and Cross-claimants.
Case No. 990929-CA
COURT OF APPEALS OF UTAH
2001 UT App 145; 24 P.3d 997; 420 Utah Adv. Rep. 14; 2001 Utah App. LEXIS 37
May 3, 2001, Filed
PRIOR HISTORY:
[***1] Sixth District, Manti
Department. The Honorable David Mower.
DISPOSITION:
Affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Special warranty deed
defendants and tax deed defendants appealed a judgment
of the Sixth District, Manti Department (Utah), quieting
title to a parcel of land in favor of plaintiffs. Special warranty deed defendants seeking indemnification also appealed the trial court's grant of summary judgment in
favor of cross defendants.
OVERVIEW: Plaintiffs believed a fence marked the
property line of their ranch and treated it as such by grazing livestock up to, but not beyond, the fence, and posting no trespassing signs. The trial court found that plaintiffs established a boundary by acquiescence. Defendants
argued that the trial court erred in: (1) finding the establishment of boundary by acquiescence, (2) granting
summary judgment for cross defendants, and (3) quieting
title in favor of plaintiffs. The instant court concluded
that the evidence supported the trial court's finding of
acquiescence. The fence had existed since at least 1929.
Owners on both sides of the fence acquiesced in it as a
boundary for at least 20 years, and the fence was used as
a substantial enclosure or marker. Special warranty deed
defendants' claim that they were entitled to indemnification failed as a matter of law because, inter alia, their
deeds warranted only against claims arising under or due
to the actions of the grantor, and the boundary dispute
arose before one of the cross defendants purchased the
property. Tax deed defendants' claim that they took title
free and clear of the disputed boundary line also failed as
a matter of law.
OUTCOME: Judgments were affirmed.
COUNSEL: George K. Fadel, Bountiful, for Appellants.
Steven H. Gunn, Katie A. Eccles, Ronald G. Russell, and
Ralph J. Marsh, Salt Lake City, for Appellees.
JUDGES: Before Judges Greenwood, Jackson, and Billings. WE CONCUR: Norman H. Jackson, Associate Presiding Judge, Judith M. Billings, Judge.
OPINION BY: Pamela T. Greenwood
OPINION
[**999] GREENWOOD, Presiding Judge:
[*P1] Defendants appeal the trial court's ruling quieting title to a parcel of land in favor of plaintiffs. Defendants also appeal the trial court's grant of summary
judgment in favor of cross-defendants, Formen Corpora-
Page 2
2001 UT App 145, *; 24 P.3d 997, **;
420 Utah Adv. Rep. 14; 2001 Utah App. LEXIS 37, ***
tion (Formen) and Backman Title Company (Backman).
We affirm.
[**1000] BACKGROUND
[HN1] [*P2] This appeal arises from a judgment of the
trial court, sitting without a jury; thus, "we recite the
facts in the light most favorable to the court's determination." Wilkinson Family Farm, LLC v. Babcock, 1999 UT
App 366, P2 n.1, 993 P.2d 229. This case involves a parcel of land in Milburn, Sanpete County, Utah. In 1938,
L.L. Peterson (Peterson) [***2] purchased 1750 acres
in Sanpete County (the Ranch). According to Peterson's
deeds, the Ranch included the entire eastern halves of
sections 13 and 24. These two half sections comprised
640 acres.
[*P3] Before Peterson purchased the Ranch, and as
early as 1929, a fence separated the eastern and western
halves of sections 13 and 24. The northern end of the
fence is within one foot of one-half mile from where the
Bureau of Land Management (BLM) placed a United
States General Land Office (USGLO) brass cap monument, marking the northeast corner of section 13 during a
1929 survey. The southern end of the fence is within four
feet of one-half mile from where the BLM placed a USGLO brass cap monument marking the southeast corner
of section 24 during the 1929 survey.
[*P4] The fence is visible, extends for two miles,
and traverses north to south in a nearly straight line over
steep terrain containing dense underbrush that is difficult
to move through and, in some areas, impenetrable. It
deviates only slightly from true north-south over its entire length. The terrain within a few hundred feet of the
fence is distinctly more level and less overgrown, providing a much easier [***3] place to have built the fence
than the fence's actual location. Property owners on both
sides of the fence used the fence to separate ranching
activities.
[*P5] From 1989 to 1995, Peterson transferred the
Ranch to his children, who, along with their spouses, are
the plaintiffs in this case. From 1929 until 1997, when
this lawsuit was filed, Peterson and his predecessors believed the fence marked the property line of the Ranch
and treated it as such by grazing livestock up to, but not
beyond, the fence, and posting "No Trespassing" signs
thereon.
[*P6] Some time in 1980, Formen bought property
to the west of the fence. Formen conducted a survey of
the property and filed a subdivision plat with the county.
Formen's survey and subdivision plat for the Hideaway
Valley Subdivision shows that the eastern boundary of
the subdivision lies 204 feet to the east of the fence in the
north, and that the boundary runs southwesterly and intersects the fence 1-3/4 miles to the south. After record-
ing the subdivision plat, Formen sold the lots on the eastern edge of the subdivision. Backman held title to the
lots for Formen, executed the subdivision plats, and issued special warranty [***4] deeds to initial purchasers
of the lots.
[*P7] Defendants Sheldon LeRoy Loveless and
Janice P. Loveless, 1 Tod Aleamoni, and Dean Verholtz
obtained title to their lots by special warranty deed. 2 All
of these purchasers are referred to herein as the "Special
Warranty Deed Defendants." Defendants Patrick Jenkins,
Anna King, and Joseph L. Adamson obtained title to
their lots by tax deeds. These purchasers are referred to
herein as the "Tax Deed Defendants."
1 Sheldon LeRoy Loveless and Janice P. Loveless purchased Lot 315 together with Ned T.
Loveless and Gladys R. Loveless. In 1988, Ned
T. Loveless and Gladys R. Loveless transferred
ownership to Sheldon LeRoy Loveless and Janice
P. Loveless by quitclaim deed. Shortly thereafter,
Sheldon LeRoy Loveless and Janice P. Loveless
transferred ownership by quitclaim deed to
Sheldon LeRoy Loveless and Janice P. Loveless,
Co-Trustees of the Sheldon and Janice Loveless
Trust. Therefore, the Loveless's claim is really
under a quit claim deed, although their predecessors received a special warranty deed.
2 Defendants Aleamoni and Verholtz are initial
purchasers, receiving their deeds from Backman.
[***5] [*P8] In 1997, plaintiffs filed a quiet title
action against defendants, including Formen and Backman. The Special Warranty Deed and Tax Deed Defendants then cross-claimed against Formen and Backman.
Before trial, Formen and Backman moved for summary
judgment on defendants' cross-claims. The trial court
granted both Backman and Formen summary judgment
on defendants' cross-claims. A bench trial on the remaining issues between plaintiffs and the Special Warranty
Deed and Tax Deed Defendants [**1001] followed.
The trial court entered findings of fact and conclusions of
law, and entered judgment quieting title in favor of plaintiffs. The trial court's Findings of Fact state, in part:
6. Prior to 1929 someone built a continuous
north/south fence ("the Fence") on or near the middle of
Sections 13 and 24. The Fence consisted of cedar posts,
barbed wire and wire net. The northern end of the Fence
was located almost exactly one-half mile west from the
northeast corner of Section 13. The Fence was visible
and straight.
7. Witnesses at trial testified that at various times
they observed the Fence in its present location, including
1929, 1961, 1979, 1980 and on many occasions since
[***6] 1980.
Page 3
2001 UT App 145, *; 24 P.3d 997, **;
420 Utah Adv. Rep. 14; 2001 Utah App. LEXIS 37, ***
....
9. Since 1929[,] the owners of the land on both sides
have occupied and used their land up to, but not beyond,
the Fence. No evidence was presented at trial that owners
of land in the western halves of Sections 13 and 24 had
objected to the location of the Fence prior to 1980.
10. In about 1980[,] . . . Formen Corporation subdivided the western halves of Sections 13 and 24 into a
number of lots. The subdivision plat which was prepared
in 1980 by R. K. Johanson shows that the eastern edge of
those subdivision lots on the eastern edge of the Subdivision are located east of the Fence: i.e., that the Fence is
located within the boundary of the Subdivision. A 1998
survey prepared by Ryan W. Savage ("the Savage Survey") shows that the Fence is located along the western
boundary of the Ranch and that the Subdivision lots encroach onto Plaintiffs' property east of the Fence. Thus[,]
the Johanson survey shows that the Fence encroaches on
the Subdivision and the Savage Survey shows that the
Subdivision lots encroach on the Ranch property.
....
12. To the extent that Johanson and Savage Surveys
are inconsistent with one another, the Court finds [***7]
that the Savage Survey is accurate. However, the Court
makes no findings as to whether Sections 13 and 24 are
"full" or "short" sections. The Johanson survey of the
Subdivision is not accurate in that it did not correctly
identify the boundary between the east and west halves
of Sections 13 and 24.
13. The owners of property located on either side of
the Fence acquiesced in the use of the Fence as a boundary between property owners no later than 1929 until
1980. During that time the Fence was used as a substantial enclosure or monument.
Based on these findings, the trial court concluded
that plaintiffs had established a boundary by acquiescence.
[*P9] Defendants appeal both the trial court's order
quieting title in favor of plaintiffs and the trial court's
grant of summary judgment in favor of Formen and
Backman.
ISSUES & STANDARDS OF REVIEW
[*P10] Defendants challenge the trial court's grant of
summary judgment in favor of cross-defendants Formen
and Backman. "[HN2] A party is entitled to summary
judgment only when there is no genuine issue of material
fact and the moving party is entitled to judgment as a
matter of law." Robinson v. Tripco Inv., Inc., 2000 UT
App 200, P9, 398 Utah Adv. Rep. 26, [***8] cert. denied, Robinson v. Tripco, 20 P.3d 403, 2000 Utah LEXIS
179, *1 (2000); see also Utah R. Civ. P. 56(c). "'"On an
appeal from a grant of summary judgment, we review the
trial court's legal conclusions for correctness and grant
them no deference."'" Robinson, 2000 UT App 200 at P9
(quoting Holmes v. American States Ins. Co., 2000 UT
App 85, P9, 1 P.3d 552 (citation omitted)).
[*P11] Defendants also challenge the trial court's finding of boundary by acquiescence and order quieting title
in plaintiffs. [HN3] A trial court's determination that "a
given set of facts gives rise to a determination of acquiescence . . . is reviewable as a matter of law." Wilkinson
Family Farm, LLC v. Babcock, 1999 UT App 366, P6,
993 P.2d 229. However, when the "determination is
highly fact sensitive," as in this case, we grant "the trial
court some measure of discretion." Id.
[**1002] ANALYSIS
I. Summary Judgment
A. Special Warranty Deed Defendants
Special Warranty Deed vs. General Warranty Deed
[*P12] Special Warranty Deed Defendants argue
they were entitled to indemnification by Formen and
[***9] Backman by virtue of their special warranty
deeds. In making this argument, these defendants essentially argue that a special warranty deed is the same as a
general warranty deed. We disagree. [HN4] A special
warranty deed is "[a] deed in which the grantor covenants to defend the title against only those claims and
demands of the grantor and those claiming by and under
the grantor." Black's Law Dictionary 424 (7th ed. 1999).
A warranty deed, in contrast, is "[a] deed containing one
or more covenants of title; esp., a deed that expressly
guarantees the grantor's good, clear title and that contains
covenants concerning the quality of title, including warranties of seisin, quiet enjoyment, right to convey, freedom from encumbrances, and defense of title against all
claims." Id.; see also Utah Code Ann. ß 57-1-12 (2000)
(describing form and effect of warranty deed in Utah).
Stated somewhat differently,
[HN5] If the grantor covenants to warrant and defend title to the property against all claims whatsoever,
regardless of their source, the covenant is a general warranty. However, if the grantor covenants to warrant and
defend the title only against claims [***10] arising by,
through or under the grantor, it is a special warranty.
Under a special warranty, if the claim arose under, or
due to the actions of, a prior owner of the land, the covenantor has no liability. However, under a general warranty, if a claim is validly asserted against the property,
regardless of who is responsible for its existence, the
covenantor is liable.
Page 4
2001 UT App 145, *; 24 P.3d 997, **;
420 Utah Adv. Rep. 14; 2001 Utah App. LEXIS 37, ***
14 Richard R. Powell, Powell on Real Property ß
81A.06[2][d]
[iii], at 81A-122-23 (Michael Allan Wolf ed., 2000)
(emphasis added) [hereinafter Powell]. The difference is
that grantors of special warranty deeds "only promise
that no title defects have arisen or will arise due to the
acts or omissions of the grantor," 11 Thompson on Real
Property, Thomas Edition, ß 94.07(b)(2)(i), at 81-82
(David A. Thomas ed., Supp. 2000), whereas grantors of
general warranty deeds promise to defend "all claims."
Powell ß 81A.06[2][d][iii], at 81A-122-23 (emphasis
added).
[*P13] In the present case, it is undisputed that
plaintiffs' boundary by acquiescence claim arose well
before Formen purchased the property adjacent to plaintiffs' property. As such, this "claim arose under, or due to
[***11] the actions of, a prior owner of the land" and,
therefore, as a matter of law, Foreman and Backman are
not liable. Id.
Merger Doctrine
[*P14] Special Warranty Deed Defendants also argue
that their real estate purchase agreements provide that
they take title "free and clear of all . . . encumbrances,"
including the boundary dispute in this case, and therefore
Foremen and Backman are liable. However, as Foreman
and Backman point out, the doctrine of merger bars this
claim. 3 "[HN6] 'It is well settled that the merger doctrine
applies in Utah.'" Robinson v. Tripco Inv., Inc., 2000 UT
App 200, P11, 398 Utah Adv. Rep. 26 (quoting Maynard
v. Wharton, 912 P.2d 446, 449 (Utah Ct. App. 1996)).
Under the merger doctrine, the terms of the underlying
contract for the sale of land are "merged into the deed
and thereby become extinguished and unenforceable"
upon delivery and acceptance of the deed. Dobrusky v.
Isbell, 740 P.2d 1325, 1326 (Utah 1987). Recognized
exceptions to the merger doctrine are fraud, mutual mistake, ambiguity, and the existence of collateral rights in
the contract of sale. See Robinson, 2000 UT App 200 at
P11; [***12] see also Annotation, Deed as Superseding
or Merging Provisions of Antecedent Contract Imposing
Obligations Upon the Vendor, 38 A.L.R.2d 1310, 1315
(1954). [**1003] However, none of these exceptions is
asserted in this case. Thus, the merger doctrine precludes
this claim. Cf. Embassy Group, Inc. v. Hatch, 865 P.2d
1366, 1373 (Utah Ct. App. 1993) ("Because we have
found no exception that precludes application of the
merger doctrine in the instant case, we therefore conclude that the conveyance at closing represents the final
merged agreement of the parties.").
3 "[HN7] Whether the doctrine of merger applies . . . presents a question of law that we review for correctness affording no particular def-
erence to the trial court." Maynard v. Wharton,
912 P.2d 446, 449 (Utah Ct. App. 1996).
B. Tax Deed Defendants
[*P15] Tax Deed Defendants contend they took title
free and clear of the disputed boundary claim. There is
conflicting authority as to whether a sale of real [***13]
property by tax deed extinguishes an adverse claim such
as an easement or covenant. See, e.g., Holly Piehler
Rockwell, Annotation, Easement, Servitude, or Covenant
as Affected by Sale for Taxes, 7 A.L.R.5th 187, 203
(1992) (stating "there is an apparent conflict of authority
as to the effect of a sale of real property to foreclose a
lien for delinquent taxes"). The Utah Supreme Court
acknowledged this conflict in Hayes v. Gibbs, 110 Utah
54, 169 P.2d 781 (1946), stating that "although the
authorities are not uniform on the subject . . . ordinarily a
tax sale does not divest easements charged upon the
property sold." 169 P.2d at 786. The defendant in that
case averred "that she obtained title [to her property]
through a tax sale, and therefore took [title] free and
clear of all restrictions." Id. at 783. Thus, the defendant
contended that she did not have to comply with a covenant that restricted commercial buildings. See id. at 78283. In holding that easements and restrictive covenants
survive a tax sale, the court stated, "if the person assessed as owner had no title to the easement, certainly
the tax sale could not pass title thereto, [***14] " and
thus, the property assessed and the property conveyed
must be the same. Id. at 786.
[*P16] That same analysis applies to the present
case. Here, the trial court found that a boundary by acquiescence claim was established as early as 1949, and
Tax Deed Defendants' predecessors in interest became
owners of the adjoining land much later. Accordingly,
Tax Deed Defendants' tax deeds did not extinguish the
preexisting boundary by acquiescence claim. To hold
otherwise would contravene the Fifth Amendment's protection against taking of property without due process of
law. See id. ("If property rights . . . are sold or extinguished by a tax sale, there would be a taking of property
without due process of law."); see also U.S. Const.
amend. V ("No person shall . . . be deprived of life, liberty, or property, without due process of law[.]"). Accordingly, Tax Deed Defendants' deeds did not convey
title free and clear of the preexisting boundary by acquiescence, and the trial court properly granted summary
judgment to Formen and Backman on this issue. 4
4
Because we have found that Tax Deed Defendants do not prevail as a matter of law on their
appeal of summary judgment against Formen and
Backman, we need not address plaintiffs' argument that defendants are barred from bringing
Page 5
2001 UT App 145, *; 24 P.3d 997, **;
420 Utah Adv. Rep. 14; 2001 Utah App. LEXIS 37, ***
their claim because they have failed to raise it in
their pleadings and they have not tried the issue
with the consent of the court. See Utah R. Civ. P.
15(a) (requiring written consent of adverse party
to amend pleadings).
[***15] II. Boundary by Acquiescence
[HN8] [*P17] Boundary by acquiescence is a long established doctrine in Utah. See Holmes v. Judge, 31 Utah
269, 87 P. 1009, 1014 (1906) (applying boundary by
acquiescence doctrine for first time in Utah); Switzgable
v. Worseldine, 5 Utah 315, 15 P. 144, 145 (1887) (mentioning boundary by acquiescence doctrine for first time
in Utah). Its purpose is to establish "stability in boundaries, repose of titles, and the prevention of litigation."
Hales v. Frakes, 600 P.2d 556, 559 (Utah 1979). To establish boundary by acquiescence, a claimant must show
"'(i) occupation up to a visible line marked by monuments, fences, or buildings, (ii) mutual acquiescence in
the line as a boundary, (iii) for a long period of time, (iv)
by adjoining landowners.'" Orton v. Carter, 970 P.2d
1254, 1257 (Utah 1998) (quoting Jacobs v. Hafen, 917
P.2d 1078, 1080 (Utah 1996)). "Failure to meet any one
of the elements of the doctrine defeats the boundary."
Hales, 600 P.2d at 559.
[*P18] Defendants argue there was insufficient evidence for the trial court to determine [***16] [**1004]
that the doctrine of boundary by acquiescence applied
because defendants did not mutually acquiesce in the line
as a boundary. Thus, we need only address that element.
[*P19] "[HN9] Mutual acquiescence in a line as a
boundary has two requirements: that both parties recognize the specific line, and that both parties acknowledge
the line as the demarcation between the properties." Wilkinson Family Farm, LLC v. Babcock, 1999 UT App 366,
P8, 993 P.2d 229. A boundary by acquiescence, thus,
requires more than mere acquiescence in use; it requires
acquiescence to a line as a boundary. See id.; see also
Hales, 600 P.2d at 559 (holding boundary by acquiescence cannot be established when a fence is "erected as a
barrier to control livestock, not as a boundary, and [is]
purposely offset"); Wright v. Clissold, 521 P.2d 1224,
1227 (Utah 1974) (holding boundary by acquiescence
not established when landowner built fence on his own
property to contain cattle and both he and adjoining
property owner knew fence was not situated on a boundary that "was in doubt or uncertain"). Thus, as we have
previously noted, "the importance of the intended
[***17] purpose of a fence" and an adjoining property
owner's knowledge thereof "has remained consistent
through cases decided [by Utah appellate courts]." Wilkinson, 1999 UT App 366 at P10 n.2, 993 P.2d 229.
[*P20] Defendants contend that the trial court erred in
considering their predecessors' failure to object to the
fence as a boundary of their property. Defendants argue
that this court eliminated indolence as a basis for establishing a boundary by acquiescence in Wilkinson. Thus,
defendants implicitly contend that their silence does not
give rise to mutual acquiescence. Defendants misread
Wilkinson. In that case, this court considered the purpose
of the fence in determining whether the parties mutually
acquiesced in the fence as the boundary. See id. at P9. In
holding that "the parties did not acquiesce in the . . .
fence as a boundary," id. at P13, this court stated in a
footnote that acquiescence in use is not the same as acquiescence in a boundary line. See id. at P13 n.3. Our
footnote is merely dicta, and it does not, as defendants
assert, eliminate indolence as a basis for establishing
mutual acquiescence. As previously indicated, [***18]
our footnote merely stands for the proposition that
"[HN10] acquiescence in use is not equivalent to acquiescence in a boundary." Id. Furthermore, our supreme
court has acknowledged that "'acquiescence' is more
nearly synonymous with 'indolence,' or 'consent by silence.'" Lane v. Walker, 29 Utah 2d 119, 505 P.2d 1199,
1200 (1973). Thus, our settled case law is contrary to
defendants' argument and clearly provides that acquiescence may be established by silence.
[*P21] Here, the evidence adduced at trial supports
the trial court's finding of acquiescence. 5 That evidence
includes that (i) the fence has existed since at least 1929;
(ii) the owners on both sides of the fence acquiesced in it
as a boundary for at least twenty years; (iii) the fence
was used as a substantial enclosure or monument; and,
(iv) the fence begins and ends near the north and south
brass cap markers, which the USGLO placed there in
1929. Additionally, the fence is straight, although it
would have been easier to construct it to better fit the
terrain, the fence was difficult to maintain because of its
location, there were "No Trespassing" signs on the fence,
and herds were run on both sides [***19] of the fence
over the years. This evidence is sufficient to support the
trial court's finding of acquiescence.
5 In addition, the trial court found that the Savage Survey was accurate. At oral argument, plaintiffs declined to rely on this finding as there was
no survey done or presented as evidence of the
actual acreage of the parcels as divided by the
fence. Accordingly, the trial court declined to say
if the lots were square.
CONCLUSION
[*P22] Special Warranty Deed Defendants' claim
that they are entitled to indemnification [**1005] fails
as a matter of law because their deeds only warranted
against those claims arising under, or due to the actions
Page 6
2001 UT App 145, *; 24 P.3d 997, **;
420 Utah Adv. Rep. 14; 2001 Utah App. LEXIS 37, ***
of the grantor, and the boundary dispute arose well before Formen purchased the property. Likewise, Special
Warranty Deed Defendants' claim that they took title free
and clear under their real estate purchase agreements
fails as a matter of law because, under the doctrine of
merger, defendants' real estate contracts merged into
their deeds and thereby were extinguished [***20] and
unenforceable.
[*P23] Tax Deed Defendants' claim that they took
title free and clear of the disputed boundary line also
fails as a matter of law because defendants cannot receive greater title than their predecessors in interest
owned, and the boundary claim arose well before defendants' predecessors owned the land that was conveyed by
the tax deeds.
[*P24] Finally, defendants' claim that the trial
court's finding of acquiescence is unsupported by the
evidence also fails. The evidence supports the trial
court's finding and there is no error in its conclusion that
a boundary by acquiescence was established.
[*P25] Therefore, we affirm.
Pamela T. Greenwood,
Presiding Judge
[*P26] WE CONCUR:
Norman H. Jackson,
Associate Presiding Judge
Judith M. Billings, Judge
Section 5
CHAPTER 8
DEEDS IN UTAH
Utah statutory law authorizes three types of deeds: General Warranty Deed, Special
Warranty Deed, and Quitclaim Deed. A review of the Utah Statute regarding the form of a deed
reveals a brief form of deed, followed by a lengthy description of the legal language that is
implied when the statutory form or its equivalent is used. In essence, by using the statutory form
or its equivalent, it becomes unnecessary to recite the extensive legal language in each deed. For
a general warranty deed, conveyances of land in Utah may be completed if substantially in the
following form:
________ (here insert name), grantor, of _________ (insert place
of residence), hereby conveys and warrant to ________ (insert
name), grantee, of ________ (insert place of residence), for the
sum of ______ dollars, the following described tract _______ of
land in ________ County, Utah, to wit: (here describe the
premises).
Witness the hand of said grantor this ______ (month/day/year).
This statutory form thus generally consists of the following elements:
1.
The name and place of residence of grantor;
2.
The name and place of residence of grantee;
3.
Statement that the grantor conveys and warrants the land to the grantee;
4.
Statement of consideration;
5.
Description of land, including county location; and,
6.
Signature of the grantor.
In the statutory warranty deed, the operative language consists of the phrase signifying
that the grantor “conveys and warrants” the property. In using this language, the grantor not only
conveys fee simple title, but it does so under statute with the five following warranties (subject to
any exceptions inserted in the deed):
1.
Grantor lawfully owns fee simple title to and has the right to immediate
possession of the premises (covenant of seisin);
2.
Grantor has good right to convey the premises (covenant of right to convey);
Deeds in Utah.doc
3.
Grantor guarantees that the grantee, the grantee’s heirs and assigns in the quiet
possession of the premises (covenant of quiet enjoyment);
4.
The premises are free from all encumbrances (covenant against encumbrances);
and,
5.
Grantor, the grantor’s heirs and personal representatives will forever warrant and
defend the title of the premises and the grantee, the grantee’s heirs and assigns
against all lawful claims whatsoever (covenant and warranty).
In a special warranty deed, the student will notice a limitation on the warranty. A special
warranty deed, by statutory language, “conveys and warrants against all who claim by, through,
or under the grantor.” Thus, limiting the warranty to actions relating solely to incidents
occurring by or after ownership of an existing grantor.
________ (here insert name), grantor, of _________ (insert place
of residence), hereby conveys and warrants against all who claim
by, through, or under the grantor to ________ (insert name),
grantee, of ________ (insert place of residence), for the sum of
______ dollars, the following described tract _______ of land in
________ County, Utah, to wit: (here describe the property).
Witness the hand of said grantor this ______ (month/day/year).
The special warranty deed using this language includes these warranties:
1.
The property is free and clear from all encumbrances made by the Grantor;
2.
Grantor, heirs and personal representative will warrant and defend the title against
claims by, through, or under the grantor.
The statutory quitclaim deed must be drafted substantially in the following form:
________ (here insert name), grantor, of _________ (insert place
of residence), hereby quitclaims to ________ (insert name),
grantee, of ________ (insert place of residence), for the sum of
______ dollars, the following described tract _______ of land in
________ County, Utah, to wit: (here describe the premises).
Witness the hand of said grantor this ______ (month/day/year).
Thus, the quitclaim deed consists of the following elements:
1.
Name and place of residence of grantor;
2.
Name and place of residence of grantee;
3.
Statement that grantee quitclaims the property to grantor;
4.
Statement of consideration;
5.
Description of the land, including the county of location; and,
6.
Signature of grantor.
Please note that the use of this deed carries no warranties and conveys to the grantee only
that title and interest held by the grantor of the title conveyance. Without recourse, by the
grantee, unless there are other enforceable commitments made in some manner by the grantor.
Section 6
Page 1
CHAPTER 9
Coulter & Smith, Ltd., a Nevada corporation, Plaintiff and Appellant, v. Roger Russell, Roger Richards, and Kristen Russell, Defendants and Appellees.
Case No. 951726-CA
COURT OF APPEALS OF UTAH
1999 UT App 55; 976 P.2d 1218; 363 Utah Adv. Rep. 20; 1999 Utah App. LEXIS 18
February 25, 1999, Filed
PRIOR HISTORY: [***1] Third District, Salt Lake
Department. The Honorable Homer F. Wilkinson.
DISPOSITION:
Reversed in part and remanded.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff buyer appealed
from a judgment of the Third District Court, Salt Lake
Department (Utah), that granted summary judgment in
favor of defendant sellers in an action for specific performance of an option to purchase property contract.
OVERVIEW: The parties owned adjacent parcels of
land. Plaintiff buyer was interested in purchasing defendant sellers' land so they entered into an agreement
which provided that plaintiff was to develop the land and
that plaintiff would have an option to purchase the lots
located on defendants' property. A year later, defendants
notified plaintiff that they intended to sell the property to
a third party. Plaintiff brought suit for specific performance, and the trial court granted defendants' motion for
summary judgment. The court reversed in part and remanded. The court disagreed with the trial court's ruling
that the option contract was void under the statute of
frauds. Because an option to purchase an interest in land
was within the statute of frauds, the option agreement
had to satisfy the statute of frauds by including all the
essential terms and provisions of the contract. The essential terms here were the property description and price,
both of which were adequately described in the contract.
The court also reversed the trial court's ruling on whether
defendants rescinded their offer to sell.
OUTCOME: Summary judgment in favor of defendants
in suit for specific performance of an option contract was
reversed in part and remanded because the contract at
issue was not void under the statute of frauds. The option
included all the essential terms and provisions of the
contract.
COUNSEL: Richard A. Rappaport and Leslie Van
Frank, Salt Lake City, for Appellant.
Michael N. Zundel, John N. Brems, and Adam S. Affleck, Salt Lake City, for Appellees.
JUDGES: Michael J. Wilkins, Presiding Judge. WE
CONCUR: James Z. Davis, Judge, Norman H. Jackson,
Judge.
OPINION BY: Michael J. Wilkins
OPINION
[**1219] OPINION
WILKINS, Presiding Judge:
[*P1] Coulter & Smith, Ltd. (Coulter) appeals the
trial court's summary judgment in favor of Roger Russell, Roger Richards and Kristen Russell (Russell). We
reverse in part and remand for further proceedings.
[**1220] BACKGROUND
[*P2] This matter comes before us pursuant to a
remand from the Utah Supreme Court. A more complete
statement of the facts giving rise to this dispute is contained in Coulter & Smith, Ltd. v. Russell, 966 P.2d 852
(Utah 1998) (Coulter II).
Page 2
1999 UT App 55, *; 976 P.2d 1218, **;
363 Utah Adv. Rep. 20; 1999 Utah App. LEXIS 18, ***
[*P3] The relevant facts are as follows: Coulter and
Russell owned adjacent parcels of property in Salt Lake
County. Discovering their similar development plans,
Coulter and Russell discussed [***2] the possibility of
Coulter buying the Russell property, a 3.67 acre parcel.
In 1991, Coulter and Russell entered into a written
agreement which provided that Coulter was to develop
Russell's property. In addition, the agreement gave Coulter the option to purchase the lots located on Russell's
property (after Coulter completed the initial stages of
development and subdivision). On April 27, 1991, the
agreement was memorialized in the following letter
signed by both parties:
Dear Dr. Russell:
In response to your request for a written proposal to
purchase your lots west of 1700 East at 10800 South, I
submit the following offer which you may accept by
signing below:
Price: $ 26,500 per lot during the 1st month following completion of the lots; price of each lot to increase $
100 per lot each month thereafter until each lot is closed.
Upon completion of the subdivision development we
offer to pay you $ 1,500 per lot; the balance of the purchase price ($ 25,000 at the outset) to be paid upon closing of each lot. We understand that the cost of the land
and lot improvements will be paid upon closing of each
lot.
The enclosed Work Exchange Agreement will initiate our cooperative efforts. [***3] We will proceed
posthaste to annex and develop our tracts jointly. I believe that working in concert will greatly facilitate zoning and all other development concerns.
Respectfully,
/s/Nathan Coulter
Nathan Coulter pmp
Coulter & Smith Ltd. is hereby granted an option to
purchase lots as per terms detailed above: This option
terminates 2 years from the date of completion of the
subdivision.
/s/Roger Russell 4-27-91 1991
Dr. Roger Russell Date
[*P4] When Russell signed the agreement, no lots
existed on the Russell property. Also, the parties were
unaware of the exact number of lots that could eventually
be developed because they had not yet attempted to annex the property to Sandy City and obtain appropriate
zoning.
[*P5] In November 1992, Russell informed Coulter
he intended to sell the property to a third party. In late
1994, Sandy City approved the annexation of the property and zoned it for 20,000 square foot residential lots.
As a result of the zoning, Russell could divide his property into six lots.
[*P6] Thereafter, Russell refused to honor the
agreement and Coulter brought suit for specific performance. Russell moved for summary judgment which
[***4] the district court granted. The district court held
that the agreement was unenforceable because (1) the
agreement violated the statute of frauds because it did
not contain an adequate description of the subdivision
lots; (2) the agreement violated the rule against perpetuities; (3) Coulter did not exercise the option within a reasonable time; (4) the option was not supported by consideration; and (5) Russell rescinded any offer or option
to purchase the property created by the agreement. Coulter appealed the trial court's grant of summary judgment.
[*P7] On appeal to this court the first time, Coulter
asserted that the trial court erred as a matter of law in
ruling: (1) the agreement was unenforceable under the
statute of frauds; (2) the agreement violated the rule
against perpetuities; (3) a reasonable time for the exercise of the option had passed; and (4) Coulter furnished
no consideration for the agreement. We reversed the trial
court's ruling that no consideration existed. See Coulter
& Smith, Ltd. v. Russell, 925 P.2d 1258, 1262 (Utah Ct.
App. 1996) (Coulter I). We also ruled that the option was
invalid [**1221] as it violated the rule against perpetuities. See id. at 1263.
[*P8] [***5] The supreme court granted Coulter's petition for a writ of certiorari to determine whether the option was supported by consideration and whether the
option violated the rule against perpetuities. The supreme
court also concluded that adequate consideration existed,
see Coulter II, 966 P.2d at 859-60, and further held that
the rule against perpetuities did not invalidate the option.
See id. at 858-60. The supreme court remanded the case
to this court to address whether the trial court correctly
ruled on the remaining issues: First, whether Coulter
failed to exercise the option within a reasonable time;
second, whether the agreement violated the statute of
frauds; and third, whether Russell rescinded any offer or
option to purchase the property created by the agreement.
We address these issues in turn.
STANDARD OF REVIEW
[*P9] "[HN1] In reviewing a case disposed of in the
district court by summary judgment, we consider the
evidence in the light most favorable to the losing party,
and affirm only where it appears that there is no genuine
Page 3
1999 UT App 55, *; 976 P.2d 1218, **;
363 Utah Adv. Rep. 20; 1999 Utah App. LEXIS 18, ***
dispute as to any material issues of fact" and where the
moving party is entitled to judgment as a matter of law.
Themy v. Seagull Enter., [***6] Inc., 595 P.2d 526,
528-29 (Utah 1979). [HN2] We examine a trial court's
award of summary judgment for correctness, according
no deference to the trial court's legal conclusions. See
A.C. Fin., Inc. v. Salt Lake County, 948 P.2d 771, 773
(Utah 1997).
ANALYSIS
I. Reasonable Passage of Time
[*P10] Coulter argues that the trial court improperly ruled that a reasonable time period had passed for
the exercise of the option. Coulter and Russell have presented conflicting evidence as to when they contemplated the transfer of the property. Russell submitted an
affidavit indicating that the option was exercisable until
spring of 1992. By contrast, Coulter's affidavit stated that
the parties intended the subdivision development to be
accomplished with due diligence, and while Coulter
hoped the option could be exercised by the spring of
1992, he never committed to that date. Inasmuch as
Coulter and Russell have presented conflicting evidence
as to when the parties contemplated the transfer of the
property, a genuine issue of material fact exists. As such,
summary judgment on this point is improper, and we
therefore reverse and remand this issue to the district
court for trial to determine, [***7] if possible, when the
parties contemplated the conveyance would occur. See
Kunz & Co. v. State, 913 P.2d 765, 769 (Utah Ct. App.
1996) (subsequent history omitted) (when conflicting
evidence on material issue of fact exists, remand for trial
is proper). In so doing, the trial court may also consider,
among other issues, what constitutes a "reasonable time"
under the circumstances of this case, in light of the supreme court's ruling that the option will be valid under
the rule against perpetuities so long as the fact-finder
determines that a "reasonable time" for the exercise of
the option is less than twenty-one years. See Coulter II,
966 P.2d at 858-59 (holding reasonable time under the
circumstances and whether that period is less than
twenty-one years must be determined by fact-finder).
II. Statute of Frauds
[*P11] Next, we discuss Coulter's assertion that the
option agreement meets the requirements of the statute of
frauds. The trial court concluded that "although the legal
description of the overall parcel owned by Russell is
sufficient, the purported option is deficient as to the
number of lots and as to the price to be paid, and therefore, the purported option [***8] is unenforceable." 1
We disagree that the option is voided by the statute of
frauds.
1 Although the trial court does not specify in its
findings of fact and conclusions of law that the
statute of frauds is what rendered the option
agreement unenforceable, it did refer to the statute of frauds in its oral ruling and the parties argue the appeal on that basis.
[*P12] The statute of frauds states: "[HN3] Every
contract . . . for the sale, of . . . any interest in lands, shall
be void unless the contract, or some note or memorandum thereof, is in writing subscribed by the party
[**1222] by whom the . . . sale is to be made . . . . "
Utah Code Ann. ß 25-5-3 (1995). [HN4] An option to
purchase is an interest in land within the statute of
frauds. See Coombs v. Ouzounian, 24 Utah 2d 39, 465
P.2d 356, 358 (Utah 1970); 2 Arthur L. Corbin, Corbin
on Contracts ß 418 (1950). Thus, [HN5] an option
agreement must satisfy the statute of frauds by including
"all the essential terms and provisions of the contract."
Birdzell v. Utah Oil [***9] Refining Co., 121 Utah
412, 242 P.2d 578, 580 (Utah 1952). The two essential
terms at issue here are property description and price.
See 2 Corbin, supra, ß 499 (stating description and price
terms are essential).
A. Land Description
[*P13] Regarding the land description, the parties do
not dispute that the land in question is the Russell property. However, Russell argues that because the land is
described in the option agreement as "your lots west of
1700 East at 10800 South" (emphasis added), when the
land had not actually been divided into lots at that point,
the agreement "describes nothing" and is fatally flawed.
We are unpersuaded both by Russell's logic and his attempt to distinguish Calder v. Third Judicial Dist. Court,
2 Utah 2d 309, 273 P.2d 168 (1954), from the case at
bar.
[*P14] Calder involved a contract to sell an unspecified
two hundred acre parcel to be selected by the buyer from
a specified larger tract of land. See 273 P.2d at 169. The
buyer sought to evade the contract, arguing it was voided
by the statute of frauds because the description "was so
vague and uncertain." Id. However, because the contract
supplied a definite way to [***10] determine the land
description--by buyer selection--with no further agreement between the parties needed, the court held it to be a
valid enforceable contract. See id. at 170-71.
[*P15] Likewise, the option agreement here supplies a definite method to determine the land description
without further agreement by the parties: Coulter was to
develop the lots according to Sandy City's annexation
and zoning requirements, 2 then Coulter was to have the
exclusive right to choose to buy or not to buy whatever
Page 4
1999 UT App 55, *; 976 P.2d 1218, **;
363 Utah Adv. Rep. 20; 1999 Utah App. LEXIS 18, ***
lots it wanted of whatever description that arose out of
the annexation and zoning process. Concerning the land
description, Coulter and Russell had no haggling left to
do after signing the option agreement. Thus, we conclude
the land description does not violate the statute of frauds.
2 In his brief, Russell concedes the involvement
of Sandy City and the dependency on "administrative contingencies" to determine "the total
number and size of the lots." He does not claim
the right to further negotiate anything regarding
the land description. "There is no need for evidence on points not in dispute." Restatement
(Second) Contracts ß 131 cmt. c (1979).
Nevertheless, Russell argues time and again
that we should ignore anything outside the option
agreement--even facts he acknowledges--to aid us
in understanding the full meaning of the description and price terms. However, the policy underlying the statute of frauds is the prevention of
successful fraud by inducing the enforcement of
contracts that were never in fact made . . . . It is
not to create a loophole of escape for dishonest
repudiators. Therefore, we should always be satisfied with 'some note or memorandum' that is
adequate, when considered with the admitted
facts, the surrounding circumstances, and all explanatory and corroborative and rebutting evidence, to convince the court that there is no serious possibility of consummating a fraud by enforcement. When the mind of the court has
reached such a conviction as that, it neither promotes justice nor lends respect to the statute to refuse enforcement because of informality in the
memorandum or its incompleteness in detail.
With ample explanation and corroboration to
be found in undoubted surrounding circumstances
or even in accompanying oral testimony, a writing may be sufficient even though it is cryptic,
abbreviated, and incomplete.
2 Arthur L. Corbin, Corbin on Contracts ß
498 (1950); see Jacobson v. Cox, 115 Utah 102,
116, 202 P.2d 714, 722 (1949); Restatement
(Second) Contracts ß 131 cmt. c (1979).
Because we see no danger of fraud in enforcing this contract, we reject Russell's attempt to
avoid on a technicality the bargain he made, regardless of how unwise or risky it may be. He
seems concerned that he bore the risk that Sandy
City would zone the property for fewer rather
than more lots, leaving him entitled to less
money. However, the statute of frauds is not de-
signed to rescue a party from a voluntary risky
deal; it is to prevent fraud.
[***11] B. Price Term
[*P16] Russell further argues that, although the option
agreement shows a firm price per lot, the agreement violates the statute [**1223] of frauds because it is impossible to determine the total price for the Russell property
in that the parties did not yet know how many lots would
be approved for the property. This argument fails for the
same reason the above argument failed: The option
agreement leaves no room for further negotiations. See
Birdzell, 242 P.2d at 580 (implying agreement valid as to
price term if no further negotiations needed); 71 Am. Jur.
2d Specific Performance ß 32 (1973) (stating fact that
some terms are left to future determination does not preclude specific performance when contract provides
means by which uncertain terms are to be made certain,
e.g., "where price is to be fixed or determined by third
parties").
[*P17] Russell has already admitted that the number of
lots to be developed on the Russell property was to be
determined by the Sandy City annexation and zoning
process--a third party. Thus, the price term may be made
certain upon completion of that process, when the total
number of lots should be multiplied by $ 26,500. Again,
the [***12] option agreement leaves no room for further
bargaining by the parties. Accordingly, the agreement is
not voided by the statute of frauds for lack of a price
term.
III. Rescission of Offer
[*P18] Finally, we review whether the trial court correctly ruled that Russell rescinded the offer to sell the
lots to Coulter when Russell informed Coulter of his
intent to sell the property to the LDS Church in November 1992.
[HN6] [*P19] An option contract is a continuing offer,
supported by sufficient consideration, "which, for the
time agreed upon cannot be unilaterally withdrawn, revoked, or rescinded by the offeror and may only be
modified, released, or rescinded by agreement of the
parties." 17A Am. Jur. 2d Contracts ß 49 (1991); see
Coulter II, 966 P.2d at 859; Jensen v. Anderson, 24 Utah
2d 191, 468 P.2d 366, 367 (Utah 1970).
[*P20] In this case, the supreme court ruled that adequate consideration supported the option contract. See
Coulter II, 966 P.2d at 859-60. As such, Russell's offer
constituted a binding option which Russell could not
rescind prior to the option's agreed upon termination-two years from the date of completion of the subdivision.
Page 5
1999 UT App 55, *; 976 P.2d 1218, **;
363 Utah Adv. Rep. 20; 1999 Utah App. LEXIS 18, ***
Because the option [***13] had not expired in 1992,
when Russell informed Coulter of his intent to sell the
property to the LDS church, Russell's attempted withdrawal of the offer had no legal effect. Alternatively, if
the trial court determines that a "reasonable time" had
passed as of November 1992, then the option had already
expired and no offer then existed for Russell to withdraw, revoke, or rescind. Therefore, we hold that Russell
did not rescind his offer to sell to Coulter and reverse the
trial court's ruling on this issue.
CONCLUSION
[*P21] We conclude that a genuine issue of material fact exists with regard to when Coulter and Russell
contemplated the transfer of the Russell property. As
such, we reverse and remand this issue to the district
court to determine when the parties contemplated the
conveyance would occur and, if necessary, to determine
what constitutes a reasonable passage of time under the
circumstances of this case. In addition, we reverse the
trial court's rulings that the agreement violated the statute
of frauds and that Russell rescinded the offer to sell the
lots to Coulter.
[*P22] Reversed in part and remanded for further
proceedings consistent with this opinion.
Michael [***14] J. Wilkins,
Presiding Judge
WE CONCUR:
James Z. Davis, Judge
Norman H. Jackson, Judge
Chapter 9
Land Survey Systems
Search billions of records on Ancestry.com
LAND SURVEY SYSTEMS
by Gary Lee Phillips
The following description applies to public domain lands that were surveyed by the United States
after the Act of 18 May 1796, which set standard methods for all such surveys. These methods were
followed in almost all the public land states, with the notable exception of Ohio where various other
methods had already been used in various parts of the state.
For Michigan, the only lands not included in this system are those that were allocated by prior
claims recognized by the US at the time it took jurisdiction. Most of those were instituted under
French or British authority, and were laid out according to the prevailing methods of those
nations, using either the old "metes and bounds" survey and land description or the French
custom of making "long lots" (narrow plots of land along the banks of rivers or lakes, each of
which had access to the water.) These older claims are primarily found along the Detroit and St.
Clair Rivers and the shores of Lake St. Clair, and near other French settlements such as Sault Ste.
Marie and Marquette.
SURVEY TOWNSHIPS
Also known as Congressional townships, these were the basic units that government surveyors used
to lay out land descriptions in the public domain states. Each township is, in theory, a square six
miles on a side, containing 23,040 acres of land. In many cases, these survey townships eventually
were organized as units of local government. County boundaries were often determined by
constituting a county to include a certain group of townships.
Townships were identified on the survey by the range system, a cartesian coordinate grid. For each
survey area (whether part of a state, a whole state, or multiple states) a set of axes had to be
chosen. The east/west axis, or base line, followed a parallel of latitude, and townships were
numbered north and south of this line: township 1 north, township 2 north, township 3 north, etc.
The north/south axis, or principal meridian, was a meridian of longitude, and townships were
numbered in ranges (columns) east or west of that line: range 1 west, range 2 west, range 3 west,
etc.
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Chapter 9
Land Survey Systems
The following diagram shows schematically the arrangement of townships around the origin, or
intersection, of a base line and principal meridian.
TOWNSHIP RANGES
In this figure, the entire diagram is 36 miles on a side. Each smaller square represents one
township. The shaded township is used in the remaining examples in this explanation, and would
be designated as Township one south range two east of the principal meridian or, more briefly, as
T1SR2E.
Since actual meridians of longitude are not truly parallel (they converge at the earth's poles) some
adjustments had to be made at intervals so not all townships are perfectly square. In some areas,
errors in the early survey work have resulted in even more significant deviations. In places where
surveys based on different axes met each other, the deviation can be quite large. You can see a
good example of this if you look at township boundaries where Michigan's upper penninsula meets
Wisconsin.
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Page 2 of 6
Chapter 9
Land Survey Systems
MICHIGAN COORDINATES
In spite of its imperfections, however, this system is still used to survey and describe units of land
in most states west of the Appalachian mountains, and prevails throughout Michigan. The base line
for Michigan forms the boundary between Oakland and Wayne Counties. The principal meridian
runs east of Lansing, and forms the boundary between Clinton and Shiawassee Counties. Sections
Each township was further subdivided into 36 sections, each of which is a square of land one mile
on a side and equivalent to 640 acres. Sections were numbered within the township starting at the
northeast corner and working first from east to west, then west to east in alternating rows, as
shown in the next diagram. This diagram represents T1SR2E, the township selected in the previous
map. The area shown is one mile on a side, and the shaded section (section nine) is used in the
examples that follow later.
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Page 3 of 6
Chapter 9
Land Survey Systems
SECTIONS WITHIN A TOWNSHIP
Townships that did not contain a complete complement of 36 sections (whether due to
irregularities caused by bodies of water or other obstacles, or because they stood at the meeting
points between two different surveys) were divided in the same manner, and whatever sections did
exist were numbered as they would have been numbered had the township been complete. For
example, if the northeast corner of a township were cut off by a lake so that section 1 would lie
entirely in the lake, then that section does not exist, but numbering for the remaining sections
begins with 2 in the next section to the west. There could also be partial sections, containing less
than a full 640 acres, for the same reasons. Land Descriptions and Allocations
In most cases, actual land units were created by dividing sections into quarters, and quartering
those units again (and sometimes a third time.) The equivalent land area in acres is given by the
following table:
Survey Unit
Full section
1/2 section
1/4 section
1/8 section
1/16 section
1/32 section
1/64 section
Land Description
Section
1/2 section
1/4 section
1/2 of 1/4 section
1/4 of 1/4 section
1/2 of 1/4 of 1/4 section
1/4 of 1/4 of 1/4 section
Acreage
640 acres
320 acres
160 acres
80 acres
40 acres
20 acres
10 acres
Example
Plot A
Plot B
Plot C
Plot D
Plot E
Plot F
One example of the way in which such units might have been arranged is shown in the diagram
below. This represents section nine of T1SR2E, and is one mile on a side.
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Page 4 of 6
Chapter 9
Land Survey Systems
SECTION SUBDIVISIONS
It is sometimes helpful to read a land description "backwards" to identify the larger units first.
Locate the township, then the section within the township, and then work out the subdivisions of
the section. Equivalent land descriptions for each of these units would be:
Plot A: South half of section nine, township one south range two east of the Michigan meridian.
Plot B: Northwest quarter of section nine, township one south range two east of the Michigan
meridian.
Plot C: North half of the northeast quarter of section nine, township one south range two east of
the Michigan meridian.
Plot D: Southwest quarter of the northeast quarter of section nine, township one south range two
east of the Michigan meridian.
Plot E: South half of the southeast quarter of the northeast quarter of section nine, township one
south range two east of the Michigan meridian.
Plot F: Northeast quarter of the southeast quarter of the northeast quarter of section nine,
township one south range two east of the Michigan meridian.
FOR MORE INFORMATION
If you have a land description in hand (usually from a land patent document or title deed) and
want to locate the place on a map, one resource that can help is the Rand McNally Commercial
Atlas which can be found in most libraries. The maps in this atlas show the survey meridians and
base lines for public land states, and have the township ranges marked. You may have to look
closely to find them, though in recent years these elements have been made more clear and the
township names are even indicated in many states.
You may also wish to consult the following for more detailed explanations of land surveys and land
descriptions in the United States:
Hone, E. Wade. Land & Property Research in the United States. (Salt Lake City, Utah: Ancestry
Incorporated, 1997. ISBN 0-916489-68-X.)
Johnson, H. B. Order Upon the Land: The U.S. Rectangular Land Survey and the Upper
Mississippi Country. (London: Oxford University Press, 1976.)
Muehrcke, Phillip C. Map Use: Reading, Analysis, and Interpretation. (Madison, Wisc.: JP
Publications, 1978. ISBN 0-9602978-1-2.)
Stewart, L. O. Public Land Surveys: History, Instructions, Methods. (Ames, Iowa: Collegiate
Press, 1935.)
The text and diagrams on this page are ©1997 by Gary Lee Phillips. Used by permission.
Permission is hereby granted for maintainers of other web pages and servers to create links to this
page. Educators and non-profit groups are also permitted to print copies of this material for use in
seminars and instructional sessions. However, any other rights and privileges, including but not
http://www.rootsweb.ancestry.com/~mnwabash/survey.htm
Page 5 of 6
Chapter 9
Land Survey Systems
limited to copying, republication, or redistribution for a fee, are reserved by the author and
require his explicit permission in writing. Thank you for observing these limitations.
HOME
Wabasha County MNGenWeb Project
Thanks to Rootsweb for hosting this site
County Coordinator:
Barbara Timm
Site Map on Home Page
Minnesota State Coordinator:
Terri Shipp
The graphics on this site come from the following providers:
©Copyright ~ Barbara Koska Timm
http://www.rootsweb.ancestry.com/~mnwabash/survey.htm
Page 6 of 6
Section 7
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Order No.:
Page 1
CHAPTER 9
LEXSEE 89 P.3D 155
Salt Lake County, Plaintiff and Petitioner, v. Metro West Ready Mix, Inc., a Utah corporation, and Monterra Rock Products, Inc., a Utah corporation, Defendants and Respondents.
No. 20020701
SUPREME COURT OF UTAH
2004 UT 23; 89 P.3d 155; 496 Utah Adv. Rep. 6; 2004 Utah LEXIS 55
March 23, 2004, Filed
SUBSEQUENT HISTORY:
Publication May 6, 2004.
[***1] Released for
PRIOR HISTORY: Th ird District, Sal t Lak e City.
On Certiorari to the Utah Court of Appeals. The Honorable Sandra Peuler.
Salt Lake County v. Metro W. Ready Mix, Inc., 53 P.3d
499, 2002 UT App 257, 2002 Utah App. LEXIS 75
(2002).
DISPOSITION: Decision of C ourt of A ppeals reversed; case remanded for further proceedings.
COUNSEL: David E. Yocom, Don H. Hansen, Salt Lake
City, for plaintiff.
Mark R. Clements, Mark H. Richards, Salt Lake City, for
defendants.
JUDGES: Chief Justice Durham , Justice W ilkins, J ustice Parris h, a nd Justice Ne hring co ncur i n Associate
Chief Justice Durrant's opinion.
OPINION BY: DURRANT
OPINION
[**156] DURRANT, Associate Chief Justice:
[*P1] In this case we address whether a purchaser
who obtains title to property through a wild deed can be
a bona fide purchaser under Utah's Recording Statute.
[*P2] The dispute at issu e is between Salt Lak e
County (the "County") and Metr o West Ready Mix, Inc.
("Metro West") over th e own ership of Parcel G , a f if-
teen-acre piece of prope rty located in Utah County near
the bord er between Utah and Salt Lak e Counties (t he
"Property"). The County received legal title to the Property on December 4, 1878; however, it failed to record its
deed in the Utah County Recorder's Office until June 17,
1998.
[*P3] Nine years before the C ounty [***2] recorded i ts deed i n Ut ah C ounty, M etro West pu rchased
the P roperty from t he Pr operty's pu rported owners. M etro West did so even though a record title search revealed
that the owners had no record title to the Property. Metro
West sub sequently reco rded its q uitclaim d eed i n th e
Utah County Recorder's Office on April 14, 1989.
[*P4] After learning of Metro West' s claimed
ownership, the County filed suit in 1999 to q uiet title to
the Property. The trial court found that Metro West was a
bona fide purchaser under Utah's Recording Statute and
granted summary judgment in favor of Metro West. The
County appealed, and the court of appeals affirmed based
on its newly-enunciated "apparent title rule." We reverse.
FACTUAL BACKGROUND 1
1 Many of t he facts reci ted herei n are t aken
from the court of a ppeals' opinion. See Salt Lake
County v. Metro West Ready Mix, Inc., 2002 UT
App 257, PP 2-4, 53 P.3d 499.
[*P5] The United States Gove rnment conveyed
the Property by land patent to [***3] William Turner in
1878. The Prop erty is l ocated in Utah C ounty, with its
northern border abu tting the Utah Coun ty/Salt Lak e
County lin e. In 187 8, Turn er con veyed the Prop erty to
the Coun ty b y warran ty d eed, which t he County immediately r ecorded in Salt Lak e Cou nty. In 1998, appr ox-
2004 UT 23, *; 89 P.3d 155, **;
496 Utah Adv. Rep. 6; 2004 Utah LEXIS 55, ***
imately 120 years [**157] later, th e C ounty reco rded
its warranty deed in Utah County.
[*P6] Nine years be fore t he C ounty rec orded its
warranty deed in Utah Cou nty, Metro West's p redecessor-in-interest, Lamona Farms, approached the purported
owners of th e P roperty, D arhl an d Ro ena Tingey ( "the
Tingeys"), and inq uired as t o t he purchase pr ice. The
Tingeys represented to Lamona Farms's owners that the
Tingey fam ily had been in pos session of and had use d
the Prope rty since the turn of the cent ury. The Tingeys
would only ag ree t o c onvey the P roperty, however, by
quitclaim deed. T he Ti ngeys ex plained t hat t hey we re
unable to convey the Property by warranty deed due to a
1,000-foot discrepancy i n the Pr operty des cription. T his
discrepancy, the Tingeys clai med, was created when the
state of Utah began st aking its sect ion m arkers at both
the north a nd south e nds o f the state. The Utah County
Recorder's Office confirmed [***4] this discrepancy.
[*P7] Before purchasing the Property, one of Lamona Farms's owners and a title co mpany both reviewed
the records at the Uta h C ounty Rec order's Office and
determined that nothing in the records conflicted with the
Tingeys' owner ship representations. It is und isputed,
however, that the Utah C ounty Recorde r's Office ne ver
listed the Tingeys as owners of the Property, and that the
Tingeys were strangers to the record title.
[*P8] The T ingeys c onveyed t he P roperty t o La mona Farms by qu itclaim deed on April 14, 1989, for $
25,000. Lam ona Farm s p romptly reco rded its q uitclaim
deed in Utah County. In 1991, Lamona Farms transferred
the P roperty t o M onterra R ock P roducts, I nc., which
merged two years later into Metro West. 2
2 To a void confusion, we he reinafter re fer t o
Metro West's predecessors-in-interest simply as
Metro West.
PROCEDURAL HISTORY
[*P9] In Feb ruary 1999, t he C ounty f iled an action to quiet title to the Property. Metro West filed a motion for summary judgment, [***5] arguing that it p ossessed legal ownership of the Property because (1) it was
a bona fi de p urchaser under Utah's Recording Statute,
see Utah Code Ann. § 57-3-103 (20 00); (2 ) it h ad ad versely p ossessed t he Property un der Utah's Ad verse
Possession Sta tute, see Utah Code Ann. §§ 78-12-7 to
-13 (1996); and (3) principles of equity and public policy
supported its own ership en titlement. The trial cou rt
granted Metro W est's motion b ased upon Utah Code
section 57-3-103 a nd the " undisputed fact s that [Metro
West] p urchased [t he P roperty] for valuable co nsideration and in good fait h, and record ed its d eed i n Utah
County pri or to any recording there by [t he County]."
The County appealed.
Page 2
[*P10] T he court of a ppeals affi rmed the trial
court's decision. Salt Lake County v. Metro West Ready
Mix, Inc., 2002 UT App 257, 53 P.3d 499. In so do ing,
the co urt of ap peals an nounced an "ap parent title ru le,"
under which a purchaser is entitled to bona fide purchaser protection where the records are silen t with respect to
ownership "if the grantor had apparent legal title, even if
he or she di d not have perfect legal [***6] title." Id. at
P 11. Apparent title, according t o the court of appeals, is
determined by co nsidering " (1) whether t he purported
owner claimed to own the property; (2) whether the purported owner pos sessed t he property; and (3) w hether
there was an y activity o r indication on the property th at
would raise questions as to who owned the property." Id.
at P 13. Und er th is app arent title d octrine, th e co urt of
appeals reasoned that t he tr ial co urt was co rrect in ex tending bona fide p urchaser pr otection t o M etro West
because t he records we re silent as to the T ingeys' ownership; the Tingeys had asserted that they had owned the
Property since the turn of the cen tury; the Tingeys were
in p ossession of t he P roperty; and t he C ounty did not
have any signs or carry out any activity on the Property
that wou ld lead Metro West to believe that th e Tingeys
were not the l egal ow ners of the Property. Id. at PP
15-16. The County petitioned for certiorari rev iew of the
court of appeals' decision, which we g ranted pursuant to
Utah Code section 78-2-2(5) (2002).
[**158] STANDARD OF REVIEW
[*P11] " When e xercising our ce rtiorari jurisdiction, w e review t he deci sion of t he co urt o f a ppeals,
[***7] not of th e trial cou rt." Mitchell v. Christensen,
2001 UT 80, P 8, 31 P.3d 572 (internal quotations omitted). Summary judgment is appropriate when there is no
genuine i ssue of m aterial fact and t he m oving party i s
entitled to judgment as a matter of law. Utah R. Civ. P.
56(c). "Because a summ ary judgment presents questions
of law, we accord no particular deference to the court of
appeals' ruling" and re view i t for correct ness. Mitchell,
2001 UT 80 at P 8 (citing Ron Case Roofing & Asphalt
Paving, Inc. v. Blomquist, 773 P.2d 1382, 1385 (Utah
1989)).
ANALYSIS
I. UTAH'S RECORDING STATUTE
[*P12] T he County argues that t he court of appeals erred in holding that a purchaser is protected under
Utah's Recordi ng Statute when he is on no tice th at his
grantor has no record title to the property conveyed. We
agree.
lows:
[*P13] Utah's Recordi ng Statute provides as fol-
Each document not recorded as provided in this title
is void as against any subsequent purchaser of t he same
real property, or any portion of it, if:
2004 UT 23, *; 89 P.3d 155, **;
496 Utah Adv. Rep. 6; 2004 Utah LEXIS 55, ***
(1) the subsequent purchaser purchased the property
in goo d faith and fo r a valuable con sideration; [***8]
and
(2) the subsequent purchaser's document is first duly
recorded.
Utah Code Ann. § 57-3-103 (2000). 3 To be in good faith,
a s ubsequent purchaser m ust t ake t he property without
notice of a prior, unrecorded interest in th e property. See
Ault v. Holden, 2002 UT 33, P 31, 44 P.3d 781. In addition, to be in good faith a subsequent purchaser must also
take the property "without notice of any infirmity in his
grantor's title. " Pender v. Bird, 119 Utah 91, 96, 224
P.2d 1057, 1059 (1950); see also Paldevco Ltd. P'ship v.
City of Auburn Hills, No. 202134, 1998 Mich. App.
LEXIS 626, at *5 (Mich. Ct. App. Dec. 18, 1998) (unpublished pe r c uriam deci sion) (noting "[a] g ood-faith purchaser is one who purchases without notice of a defect in
the vendor's title" an d th at "n otice need only b e of th e
possibility o f th e righ ts of an other, no t positiv e k nowledge of tho se rig hts"). Th is n otice is no t co nfined to
situations i n which a su bsequent p urchaser has act ual
notice of an un recorded interest or infirmity in the grantor's title. Rath er, it in cludes circumstances where a purchaser has constructive notice of [***9] such information, in cluding bo th (1) reco rd no tice "'wh ich results
from a rec ord or which is imputed by the recording statutes,'" an d (2) in quiry notice "'wh ich is presu med b ecause of t he fact that a person has knowledge of certain
facts which should impart to him, or l ead him to, knowledge of t he ulti mate fact.'" First Am. Title Ins. Co. v.
J.B. Ranch, Inc., 966 P.2d 834, 837 (Utah 1998) (qu oting 66 C.J.S. Notice § 6 (1950)).
3 Because this current section is identical to the
code sect ion a pplicable at t he t ime the C ounty
filed its quiet title action, we cite the current code
provision. Compare Utah Code Ann. § 57-3-3
(1994), with Utah Code Ann. § 57-3-103 (2000).
[*P14] T he County argues that because a search
of the Utah County records revealed that the Tingeys had
no record title to the Property, Metro West was necessarily on inquiry notice of a defect in the Tingeys' title. According to the County, under this inquiry [***10] notice
analysis the lack of record title wou ld have led a reason able pe rson t o ha ve di scovered t he C ounty's recorde d
title to th e Prop erty i n t he Salt Lak e County Reco rder's
Office. Con sequently, th e County assert s th at Metro
West cannot be a go od fai th p urchaser w ithout notice
under the recording statute.
[*P15] We agree that the Tingeys' lack of rec ord
title put Metro West on notice of a defect in the Tingeys'
title. However, we do so not because Metro West was on
inquiry notice of the defect, but because Metro West had
both actual and constructive record notice of the defect,
which precluded it fr om tak ing th e Proper ty in goo d
faith.
Page 3
[*P16] Because the Tingeys had no record title to
the Property when they transferred it [**159] to Metro
West, the c onveyance was c arried out throu gh wh at is
commonly referred to as a " wild deed." See Poladian v.
Johnson, 85 So. 2d 140, 140 (Fla. 1955) ( en banc) (" A
'wild deed' is one executed by a stra nger to the record
title . . . ."); 11 Thompson on Real Property, Thomas
Edition, § 92.11(c) (Davi d A. T homas ed., 1994) ("[A]
'wild deed' [is one] executed by a grantor with no record
ownership of the interest . . . [***11] ."). Few courts
have addressed wh ether a pu rchaser who acq uires title
through a w ild deed takes free of an un recorded interest
in the same property under the recording statutes. However, at least one commentator has expressly noted that a
purchaser who tak es title thro ugh a wild deed is not th e
type of purchaser that recording st atutes protect. See
Joyce Palomar, Patton and Palomar on Land Titles, § 10
(3d ed. 2003) ("The term 'bona fide purchaser' as used in
recording a cts doe s n ot i nclude one w ho buys from a
stranger to the record."). And the majority of courts that
have addressed the issue have held that a purchaser who
receives prope rty th rough a wild deed is not entitled t o
take f ree of a n unrecorded i nterest si mply by vi rtue of
having recorded a purported conveyance of title executed
by a stranger to the record title. See Holland v. Hattaway,
438 So. 2d 456, 470 (Fla. Dist. Ct. App. 1983) (no ting
that beca use " recording statut es do not supp ort or v alidate a wild deed or any conveyance of an interest that the
grantor does not have," an appellant whose chain of title
traced back to the sovereign had superior interest over an
appellee w ho could o nly t race [***12] ti tle to a wild
deed e xecuted by a stranger to the rec ord); Zimmer v.
Sundell, 237 Wis. 270, 296 N.W. 589, 591 (Wis. 1941)
("If one who has no title u nder the laws gov erning conveyances i s t o ha ve a s uperior one under t he r ecording
acts, it should be because he has relied upon the record,
and when he purchases from one who is a stranger to the
record title h e h as no grounds for su ch relian ce."). But
see Hyland v. Kirkman, 204 N.J. Super. 345, 498 A.2d
1278, 1284, 1289, 1295-96 (N.J. Super. Ct. Ch. Div.
1985).
[*P17] We conclude that a purchaser whose chain
of title is founded on a wild deed cannot be a bon a fide
purchaser under Utah's Recording Statute. As previously
noted, to be in good faith a purchaser must purchase the
property without notice of any d efect or in firmity in the
grantor's title. Pender, 119 Utah at 96, 224 P.2d at 1059.
Because "one who deals with real prope rty is charge d
with notice of what is shown by the records of the county
recorder of the county in wh ich the property is situated,"
Crompton v. Jenson, 78 Utah 55, 70, 1 P.2d 242, 247
(1931), an d by im plication char ged wi th n otice o f w hat
[***13] the records should show but do not, i.e., a lack
of record title in a g rantor, we ho ld t hat by d efinition a
purchaser whose title is fo unded on a wild d eed is on
notice that his grantor had no reco rd title to the property
purportedly being conv eyed. Th is is t rue in in stances
where, as i n this case, t he subsequent purchaser has ob-
2004 UT 23, *; 89 P.3d 155, **;
496 Utah Adv. Rep. 6; 2004 Utah LEXIS 55, ***
tained actu al notice of th is abse nce by searching t he
records. Moreover, it is also true even when the purchaser has no actual n otice of the title d efect, since all g rantees of wild deeds are necessarily charged with constructive record notice by virtue
of t he rec ording st atutes.
Accordingly, a pu rchaser who acquires property through
a wild deed will be held to have been on notice of a defect in his grantor's title an d will not qualify as a su bsequent purchaser in good faith for purposes of Utah's Recording Statute.
[*P18] Th is is n ot to say th at a pu rchaser who
acquires property through a wild deed can never acquire
good title. We merely hold that the recording statutes do
not p rotect su ch a purchaser as a gainst a n unrecorded
interest in th e same. See Huntington City v. Peterson, 30
Utah 2d 408, 410, 518 P.2d 1246, 1248 (1974) (explaining [***14] that record ing a deed d oes no t p ass title);
Horman v. Clark, 744 P.2d 1014, 1016 (Utah Ct. App.
1987) ("The recording st atute's pur pose i s not t o m ake
the transfer of property effective as between the pa rties .
. . ."). If a purchaser can est ablish t hat his gra ntor possessed and conv eyed valid title to th e property in dependent of the recording statutes, a conveyance through wild
deed will be effective as against any competing claims.
[*P19] Applied in th is case, b ecause th e Tin geys
had n o record title to the Property, Metro West was on
notice of a defect in the [**160] Ting eys' record title
and therefore did not purchase the Property in good faith
for purposes of Utah's Rec ording Statute. As suc h, it is
not a bona fide purchaser and is not entitled to quiet title
to the Property as ag ainst the County's unrecorded interest simply because it rec orded its purported title first. If,
however, the Tingeys acquired valid title to the Property
through a m eans not re flected by t he record, suc h a s
through adverse possession, the Tingeys conveyed valid
title and Metro West would be entitled to quiet title to the
Property as against the C ounty. Beca use the rec ord is
insufficient [***15] fo r us to d etermine wh ether th e
Tingeys h ad valid title to t he Prop erty, we rem and fo r
further proceedings consistent with this opinion.
II. ADVERSE POSSESSION
[*P20] Although not an issu e reached by the trial
court below, Metro West argues in the alternative that it
is entitled to summary j udgment because it established
ownership of the Property through its own adverse possession. The C ounty c ontends t hat not only d o disputed
material facts exist that pr eclude s ummary ju dgment i n
Metro West's favo r, bu t th at ev en if Metro West established all the necessary ele ments of adverse possession,
Metro West is barred from acq uiring title throug h ad verse possession under Utah Code section 78-12-13 because the C ounty designated th e Pro perty for a pub lic
use. See Utah Code Ann. § 78-12-13 (2000).
[*P21] "An app ellate cou rt m ay affirm a trial
court's ru ling on an y proper gro unds, ev en t hough t he
Page 4
trial court relied on some other ground." DeBry v. Noble,
889 P.2d 428, 444 (Utah 1995). To do so, however, the
facts established in the record must be sufficient to support th e alternativ e groun d. See Renn v. Utah Bd. of
Pardons, 904 P.2d 677, 685 (Utah 1995). [***16]
[*P22] In Utah, a person withou t legal tit le is
deemed "to have been under and in subordination to" the
owner with leg al title u nless th at person has adv ersely
possessed t he prope rty. Utah Code Ann. § 78-12-7
(2000). When an occupant has entered into possession of
property un der a clai m o f titl e, th e o ccupant may estab lish ad verse possession by demonstrating t hat (1 ) t he
property was "occupied a nd claimed for t he pe riod of
seven years continuously," id. § 78-12-12; (2) "the party,
his predeces sors and gra ntors have paid all taxes which
have been levied and assessed [on the property]," id.; and
(3) the property was, in pertinent part, "usually cultivated
or improved," "protected by a substantial inclosure[,]" or
"used . . . for the or dinary use of the occ upant," id. §
78-12-9.
[*P23] To be en titled to summary j udgment o n
the basis of adverse possession, M etro West m ust affirmatively show all the statutory elements of adverse possession. See English v. Openshaw, 28 Utah 241, 247, 78
P. 476, 477 (1904) ("To o verthrow [t he] presumption
[that the ad verse p arty is not und er subo rdination to th e
legal own er's title], [***17] t he party claiming a dversely has the burde n to establish the fact[] by c ompetent evidence . . . ."); see also Martin v. Kearl, 917 P.2d
91, 93 n.5 (Utah Ct. App. 1996) ("Because of the gravity
of adv erse possession claims--wresting title fro m o therwise rightful owners--claimants m ust st rictly com ply
with all req uirements."); 3 Am. Jur. 2d Adverse Possession § 311 (1986). In t his case, we find at l east two key
areas of dis pute sufficient to r ender summary j udgment
inappropriate. 4
4 Metro West asserts t hat the Coun ty's failu re
to set f orth i n its o pposing m emorandum "a
statement of facts it claim s are in dispute as [required by] rule 4-501(2)(B) of the Utah Code of
Judicial Administration" s hould result i n o ur
finding t hat M etro West's fa cts "be deem ed a dmitted fo r purposes o f s ummary ju dgment and
this appeal." It is tru e that the Co unty's opposing
memorandum did not set fo rth di sputed facts
listed in numbered sentences in a separate section
as required by the Utah Rules of Judicial Administration. See Utah R. Jud. Admin. 4-501(2)(B).
However, gi ven t hat t he disputed facts were
clearly provided in the body of the memorandum
with applicabl e record references, we fi nd the
failure to comply with the technical requirements
of rule 4-501(2)(B) to b e harmless in th is case.
See Hall v. NACM Intermountain, Inc., 1999 UT
97, PP 19-21, 988 P.2d 942 (noting the failure to
specifically set forth a legal basis for the award of
2004 UT 23, *; 89 P.3d 155, **;
496 Utah Adv. Rep. 6; 2004 Utah LEXIS 55, ***
attorney fees in compliance with rule 4-505 of the
Utah Code of Judicial Administration was a
harmless error because the court and both counsel
always knew the purpose behind and the basis for
the proposed award of f ees). Accordingly, we
examine whether the Count y's disputed fa cts are
sufficient to preclude summary judgment in favor
of Metro West.
[***18] [*P24] [**161] First, t here are disputed facts as to whether Metro West's use of t he Property w as co ntinuous during th e r equired sev en-year period. M etro West arg ued before both t his c ourt an d t he
trial court t hat "begi nning i n 19 90 an d co ntinuing t hereafter, Metro West improved [the Property] by bulldozing num erous access roads a cross t he property[,] e xcavating and drilling numerous holes on [the Property,] and
conducting regular sam ple testing o f t he un derground
materials." Howev er, as th e County argu ed to th e trial
court, whether th e n ature of th is u se was su fficiently
continuous is in dispute.
[*P25] For exam ple, prior to tran sferring the
Property to M etro West, Dr. Rich ards, Lamona Farm s's
owner, could not specify d uring w hat peri od he o r hi s
employees oc cupied t he P roperty. Dr. R ichards al so
could not recall how many days his employees spent on
the Property conducting testing. And, though he claimed
that r oads were bei ng m ade on al l o f Lam ona Fa rms's
property con tinuously, Dr . Richards co uld not i dentify
any t imes whe n s uch r oads were m ade on t he P roperty
specifically be cause he di d not kn ow where th e Prop erty's boundaries were. Metro West also had no record of
how [***19] many day s i ts em ployees spent on t he
Property. Ro y McNeil, one of Metro West's p rincipals,
testified th at he kn ew Metro West had begun ex ploring
dirt on the Property in 1998; however, he could not say
when exploration had occurred between 1990 and 1995.
[*P26] Second, a dispute exists regarding whether
Metro West paid p roperty taxes on the Property for the
seven-year pe riod. As the County correctl y asserts, the
tax recei pts s ubmitted to the trial court do not indicate
that th e tax es being paid were sp ecifically for t he Pro perty. In fact , not onl y do d escriptions pr ovided in the
Page 5
"property description" portion of the receipts differ from
year to year, but the total acreage of land identified in the
tax receipts change s as well. Based on t he tax recei pts
provided in the record, it is i mpossible fo r u s to determine whether the varied des criptions on the tax receipts
were, in fact, attributable to the Property.
[*P27] Because there is a genuine issue of material f act as t o wh ether Metro West co ntinously u sed and
paid taxes on the Property, Metro West is not entitled to
summary judgment and we need not address whet her
disputed facts exist as t o the rem aining ele ments of a dverse [***20] pos session un der Utah Code section
78-12-9. M oreover, ha ving d etermined t hat M etro West
is not entitled to summary judgment on t he basis of adverse possession, we need not reach the County's alternative ar gument th at su mmary judgment w ould b e barred
by the "designated for public use" exception under Utah
Code section 78-12-13.
CONCLUSION
[*P28] T o take free of a n unrecorded interest i n
property un der Utah's Recording St atute, a subsequent
purchaser m ust p urchase t he property i n good faith
without notice of any defect in his grantor's title. Because
a p urchaser whose ch ain of title is fo unded on a wild
deed necessarily has construc tive record notice th at h is
grantor's record title is d efective by virtue of tak ing title
from a strange r to the record, a p urchaser who ac quires
property t hrough a wild d eed cannot be a goo d faith
purchaser. Ac cordingly, M etro West i s n ot a bo na fi de
purchaser under Ut ah's R ecording St atute and ca nnot
take free of th e County's unrecorded interest in the Property unless it estab lishes that the Tingeys obtained valid
title to th e Pro perty throug h a m eans other t han a recorded c onveyance. M oreover, si nce genuine i ssues of
material fact [***21] ex ist as to wh ether Metro West
adversely p ossessed t he P roperty, sum mary j udgment i s
inappropriate. We therefore reverse and remand for further proceedings consistent with this opinion.
[*P29] Ch ief Justice Durh am, Ju stice Wilkins,
Justice Parrish, and Justice Nehring concur in Associate
Chief Justice Durrant's opinion.
At this point, let's briefly consider a situation in which the type of index makes a big difference
in what a searcher wil find. There is something called a wild deed, which means an instrument
that is literally recorded but cannot be found by use of the name indexes. For Searchwell s
search for Lot 7 in Shaky Heights, imagine the following state of affairs since Brown inherited in
1950. We have added two deeds to the picture. Brown, a double-dealer, conveyed the land
twice, first in 1967 to Grant before his 1970 deed to Cramer. In 1968 Grant conveyed to Hardy.
Notice that the Brown-Grant deed was never recorded, but Hardy promptly recorded the deed to
him. The Grant-Hardy deed is a wild deed, not because it contains bizarre provisions or the
parties are "party animals," but because Searchwell cannot possibly find this deed. She searched
title starting in the grantee indexes with the name "Doubtful" and worked backward. After she
constructed a chain of title, she checked for adverse transfers in the grantor indexes, and she did
check for transfers by Brown. However, she didn't find the Brown-Grant deed because it's not
recorded. The Grant-Hardy deed is recorded and is properly indexed under both those names,
but these two names appear nowhere in Searchwells chain of title. If Goodtitle buys the
property from Doubtful and Hardy shows up, who should own it? Hardy will argue that he
recorded and is entitled to the protection of the recording statute, but the courts that have
wrestled with this problem have ruled in favor of Goodtitle. Hardy did record his deed, but
legally it's deemed to be unrecorded. This deed is "out in the wild" because it's not retrievable
in the recording act's information system. Is it fair that Hardy loses title, even though he did
record? While Brown may be the real culprit, the grantee under a wild deed bears some
responsibility for the mix-up. Had Hardy done a competent title search when he accepted the
deed in 1968, he would have noticed that his grantor, Grant, did not have record title. If he was a
purchaser, he should have objected to title, with the consequence that he would not have gone
forward unless Grant produced and recorded his deed from Brown.
Section 8
C HAPTER 1 1
R ISKY B USINESS AND THE B USINESS OF R ISK :
W HY W E NEED T ITLE I NSURANCE
P ROFESSOR K EVIN R. M URRAY ©
A Brief History of American Real Estate...
The Origins
In medieval England, the system of land ownership was simple--it all belonged to the king.
Ownership and control over land was a symbol of power and wealth. The king reserved large areas for
his personal use, and granted stewardship over the remainder to the highest nobles, in return for services
necessary to support the kingdom. This feudal system, in which nearly everybody leased and almost
nobody owned, began to change as trade increased and wealthy merchants and craftsmen obtained greater
political influence over the monarch. Trade was facilitated by the development of towns, and to foster
their growth, the monarch granted townspeople greater rights. Eventually, individuals were able to obtain
land ownership rights, which came to be viewed as an assortment of interests or rights that applied to
different aspects of the land. These rights became part of the system of trade; they were bought, sold, and
passed from generation to generation.
The American System: Cool, but Confusing
The American land ownership system, having inherited its basic traits from the English system,
relies on the same conceptual framework--viewing land ownership as an assortment of various rights and
interests that can be distinguished from one another. These rights and interests are often analogized to a
bundle of sticks. A landowner's bundle, for example, may include the right to harvest timber or mine
minerals found on the land, the right to build and use a road across the land, and the right to hold title to
the land as collateral for a loan. Each of these "sticks" can be bought and sold independently of one
another. This concept gives land owners great flexibility in the way they choose to use their land; they
can retain as many or as few of the rights to the land as they want.
Although this concept creates a very robust and dynamic real estate market, it also creates some
serious problems. Parsing land ownership rights in this way results in real estate with very complex and
frequently changing ownership arrangements that are difficult to keep track of. In an attempt to deal with
this, a system of recording transfers of ownership rights in land was developed. This system consists of
large centralized collections of records reflecting deeds, liens, easements, mortgages, and other
documents necessary to understand how ownership rights in a specific property are distributed. In the
United States, these collections are usually housed in the clerk's office of the county in which the land is
located.
Unfortunately, recorded documents aren't the only things that can establish legally binding
ownership rights. Many documents, such as deeds, liens, and wills, which can be recorded, but
sometimes aren't, can alter the distribution of rights and interests. Common law doctrines, such as
1
adverse possession and prescription, allow individuals to informally establish rights in land which are not
reflected in any legal documents whatsoever. On top of it all, duly recorded documents that contain
mistakes or are fraudulent can make the county clerk's files themselves unreliable.
America's first 100 years was a period of geographical expansion, and finding land with a crystal
clear title (often directly owned by the United States) was not difficult. Perhaps that explains why the
problems associated with the "bundle of sticks" concept of property rights and the imperfect recordation
system didn't reach a crisis earlier than it did. In the mid to late 1800's, the crisis came, as landowners
began to crowd together in cities and the first generations of people buying and selling real property
rights began to pass.
For the first century or so of the American system, transferring title to real estate had been
handled by conveyancers, who oversaw the entire transaction and attempted to navigate the murky waters
of real estate law. The conveyancer (who was not necessarily an attorney) conducted a title search,
checking the ownership records of the property in question to determine the ownership rights of the seller
and any other rights, interests, liens or encumbrances that might affect the property. Based on this search,
the conveyancer provided a signed abstract which described of the status of the title.
Buyer Beware!
Conveyancers sometimes made mistakes, however, and such mistakes were made at the expense
of the buyer. It wasn't until 1868 that this situation came to the attention of the public, when the
Pennsylvania Supreme Court decided Watson v. Muirhead,1 a case involving a man named Watson who
purchased what he thought was free and clear title to land in Philadelphia, and then lost his entire
investment when the property was auctioned to satisfy a lien on the property. Watson, in purchasing the
property, had relied on an abstract produced by Muirhead, the conveyancer, which showed the property
free of any encumbrances. Muirhead had actually uncovered an unexecuted judgment against the
previous owner, and suspected that a judgment lien against the property might exist, but after consulting
an attorney, mistakenly concluded there was no lien. Watson sued the conveyancer, claiming that he was
liable for the damages caused by his mistake. The Pennsylvania Supreme Court held that Muirhead had
performed his services in accordance with professional standards, and was thus not liable for Watson's
financial injury. The official rule was that Watson, an innocent purchaser, had no legal recourse--buyer
beware.
Enter, Title Insurance.
The landmark Watson v. Muirhead case made it clear that something needed to be done to make
real estate investment less risky for purchasers and thus encourage land development. In response, the
Pennsylvania legislature passed an act providing for the incorporation and regulation of title insurance
companies. In 1876, a group of Philadelphia conveyancers joined together and established the first title
insurance company, the Real Estate Title Insurance Company of Philadelphia. The company pledged to
"insure the purchasers of real estate and mortgages against losses from defective titles, liens and
encumbrances," and guaranteed that "through these facilities, transfer of real estate and real estate
securities can be made more speedily and with greater security than heretofore."2
1
2
2
57 Pa. 161 (Pa. 1868).
http://www.nationaltitleduluth.com/tradition.htm
In the intervening years since the establishment of the first title insurance company, such
companies have proliferated, and title insurance now plays a vital role in the real estate industry. The
effectiveness of title insurance in accomplishing its purpose is demonstrated by the fact that the process
used to determine the status of title to real property hasn't changed much since title insurance became an
option. What has changed is who checks the records. Watson hired Muirhead, a conveyancer, to conduct
the title search. Today, a title insurance company or an attorney usually conducts the search.
What Everyone Should Know About Title Insurance...
What is Covered?
Title insurance is different from other types of insurance in that it protects against what might
have happened in the past, rather than what might happen in the future. Because the risk of title defects
is both substantially reduced once a title search has been conducted, and fairly constant thereafter, title
insurance premiums are paid up front, all at once. This contrasts with insurance premiums for most other
activities, which are paid in continual installments because the insured risks are higher and subject to
continuous fluctuation.
Generally speaking, title insurance protects against losses arising from unknown or undisclosed
defects in the past chain of title. It should be noted, however, that title insurance is, at its core, a
contractual agreement, and therefore what it insures can vary from policy to policy--not all coverage is
created equal. Title insurance is not available at all when title is found to be defective. When title is
deemed to be clouded (evincing possible, but not certain, defectiveness), the insurer will often exclude
the possible defects from coverage. In its most basic form, title insurance might cover only defects
associated with recorded documents. Most standard title insurance policies, however, cover more than
just that--they usually cover several of the hidden defects that can arise independent of the recordation
system. Title insurance companies also provide additional coverage (for an extra charge, of course) that
can go far beyond basic coverage; each type of additional coverage is called an "endorsement." All title
insurance covers the relevant costs associated with resolving defects covered under the policy, including
legal costs.
Who is Covered?
There are three main types of policies. The first is an owner's policy, which protects real estate
purchasers (like Watson) from losing their investment because someone else has a stronger claim to
ownership of the property. The second is a loan policy, which protects secured creditors who finance
real estate transactions by insuring that their collateral isn't lost due to defects in the chain of title. The
third is a leasehold policy, which protects a tenant from losses in the event that the landlord does not
own the leased property.
What You Don't Know Can Hurt You.
Several important facts about title insurance are often overlooked or misunderstood by people
involved in real estate transactions. First, loan policies and owner's policies are mutually exclusive-loan
policies don't cover owners, and owner's policies don't cover lenders. Sophisticated lenders usually
refuse to make a loan without requiring the protection of a loan policy. Unfortunately, the less
3
sophisticated loan recipients sometimes think their purchase of the loan policy is also the purchase of a
policy protecting themselves. This is understandable because in some ways a loan policy often does
protect the owner. The lender's policy is basically an attempt to insure against the same problem as an
owner's policy--a loss of clear title to the property. Thus, battles over title are frequently fought by the
lender's insurer, which often amounts to free protection for the uninsured owner. Such protection,
however, is incidental and often short-lived. This is because the lender's insurer is defending the lender's
interests, which aren't the same as the interests of owner. A loan policy is meant to protect the lender's
interest in collecting on its loan, so it typically insures a lender only up to the amount of the loan. This
means that as the loan balance decreases, so does the coverage amount. There is a point at which it is
cheaper for the insurer to pay off the loan than to wage a legal battle to clear the title, and at that point,
the owner's interest in the property loses its free protection. Additionally, insurance companies
sometimes lose their legal battles, and when that happens, the lender gets paid, but an owner who is
relying on the lender's insurance policy for protection receives no compensation for his or her resulting
financial loss.
Second, even if an owner or tenant is on the ball enough to purchase a policy, it is important to
remember that the policy is merely a contract, and the terms of the contract set the coverage. Owner's
policies usually have a defined coverage amount determined by the purchase price of the property being
covered. If an owner purchases a policy covering an undeveloped parcel purchased for 1 million dollars,
the policy's maximum payout will probably be limited to 1 million dollars, even if the cost of replacing
the property has increased and the owner has built 30 million dollars worth of improvements into the
property. In such a situation, losing title can be devastating, and owner's title insurance policy relatively
ineffective. Similar circumstances can befall a leaseholder when the landlord loses title.
Fortunately, as discussed above, title insurance policies are contracts that can be negotiated and
renegotiated to accommodate a variety of circumstances. For example, endorsements that incorporate
inflation riders into the policy can be purchased to help account for the increased monetary value of the
property over time, and coverage can be increased to account for improvements. Similarly, lenders can
purchase endorsements that track all manner of loan structures in order to achieve coverage that reflects
the value of the loan over time as well.
In Conclusion...
The advent of title insurance has made the United States a remarkably safe place in which to
invest in real estate by compensating for the many uncertainties and complications created by our
concept of land ownership as a variable set of separable rights and interests. Although a title insurance
policy can be fine-tuned to cover the most relevant financial risks associated with a real estate
transaction, the utility of the policy in a particular case depends largely on how well the risks faced by
the insured, and the coverage provided by the policy, are understood.
4
Ower's Policy of Tite Insurance
_IV
First Amrican Title Insurance Company
I'IU
Policy
Owner's
5011400- 2424
AI II of di ii qol no or II Ia wr lll' to be gi II il CoJl ui II po RIl be gi to
the Co Illlll ili In SI '1 alib Cc
CO RIKS
SUBJCT TO TH EXCLUSlH FR CO, TH EXON FR CO COAINED IN SC B, AND THE
~~Ui~~~oc .
CONDITINS, FI AMERAN TI INRAE COPAN, a Ca ar (th ~ in, as of 0a of P* ii, to
th ex sI in Co Ri 9 iI 10,
af Da d Po, _ ki fi da, id ex th Mw d in, su fi
1. Til be 'I oU II assl in Sc A.
2. My de in flii or øn on Ui Tit. Th Co Ri inud iu is no Ii to I& ag IoIi
(s) A de in Ih Til ca bY
0) ia, fr, ui in, dur, inpe, Iniødty, or Impe;
(i) fa d il pe or Ent to have lU a l1 or am;
(it) a do ai Til no .y ae, ex, wì, se ac, oo, fi de;
(iv) I. to pe ki ac ne to cr . do br el me do by la
(v) a do ex ii a fä, exre, fi ot in po of at;
(vi) a cb no pn ti, oo fi iixa i1 Ui Piic Re ~ fi lo pe II ii by eleá
mea au by laW; or .
(vii) a deve juda or adve pi. .
(b) Th ri 01 ie es ta fi as In on II Tile by a go ai di fi ~e, W 1I.
(e) An ll en, öt, va, or ad i: af th TdI ih wc li ii by an
8C and ea ii iu oIl1 lB. Th ie 'eii iWs en of eä ii
lo on Ui La on ~ ii, an en onlo th La 01 eid inpi io on ia ii.
3. Ui Tit.
i (CClre Ri Co on 1'2)
4. No rY of ac io in li h La.
In Wil 'M, Fi Ai Tit in Cc i. ca Is lXle n. lo be ii af by It au ol as rI
Dale of Pocy sh in Sc. A.
First Amecan Tlfle Insurance Company
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COVER RIS (Conued)
5. The vä or ønment of any la, orin, pe or go ~ (in II re ~ ~ arl zo)
re, Æg pr, II re to
(a) li 0C, us, or enj of
th Ii;
(b) hl chni, hns, or ki of an imer on ih La;
la; or
(d)
en pr
ø a no, de an pe of hl La, is re inlh Pu Re æt lo di vi or iinl to en, bu on to
(el ih su of
no. .
hl ex ofli vD or en re to in thi no.
6. An ennl8C ba on hl exe of a llmela pdiæ po no co by Co Ri 5 if a no oIlh anme
ad, de an pa of it La, is re in ii Pu Rea, bi on to ti eæt oflh en i1rr lo inli
no 01 li ex, de an pa of li La, is I8 ilth Ni Re.
8. My ia by a QOnt bo thi ha oa an is bi on ii rils of a pi fo vi Yi Kn.
9. ril be Yesl ot Ul as si in Sc A flii de
7. Th em of li ri of ei do ~ a
(a) as a re de aw il wf or in pa or Ira a IX or pr an aI re, of a lr of al OIiy pa of
ii ti ki or any in_I in th la 0C pr to ti ti ws rit as sh in Sc A be tht ¡rr
ir cole a li or ¡i ti llrle ba, sl in, or si cr' ri la; or
(b) be Ih int of lrr ve Ti& as sh il Sehediæ A co a ¡ifent trnser ii fe bal.,
slle in, fl5i ae' ri la by re of th la of m; re in 11 PI Re
01 to be ii, or
(ü) to ii no of it eW to a pi lo va or to a ji or ie cr.
10. My de in or lin 01 en on Ui TI fi olr ma ii ii Ci Ri 11l 91h ha be ae or atch
or ha be Oe or re ilth PiIC Re sit 10 ii 01 Po aO pr.to1l re il 1I de or oth in
. il ti il!h Pu Ri Ui ve TdI as st in Sc A.
Th ~ wi als IØ th co, atys' le, an exp iw in delø 01 an mall inn agns by lt Pd, bu on to th
ext pr ii th Cc.
EXCLUSONS FROM COVERAGE .
Th lo ni are ex~ exck m le co of
1M po, nllh Co wi no pa lo fi da, co,
aI'le, fi exp ii ar ~ re of .
1.(a) My la, or, pei!, or go~ ~.
. (rd ti re lo bullii an zo) reng,
ieli,
pr fi_ to .
(i ih oa, us, fi ei ollh La
(H) he ch, di or bc rJ any
in ei on th la;
RR) ii su of Ia; fi
(iv) øn pi:
or Ih el of any viiö ci th la, on, or
go re Th Ex l!al do no roif or
im th ai pr II ~ Ri ~.
(b) My gMrita po pir. Th Exus 1
(b) ~ 00
moil 01 &m th Cl pr IJ Co Ri 6. . .
2. . Qf eni do. TI ~ do 00 io fi Ut
!h co ¡i ii CO Ri 7 or 8.
3 De li øn, ad cl, or. maei
Cl
(bl 00 Ko In th Co, no ie In th Pu
. (a) ~,si, ØS, or ap 10 by di in
Rea at Da of Po, bu Kn 10 th Ins
Cl an no di in wr to th Coy by th
Inm Cia pr 10 th dale th in CI.
bi an in ..ii ¡x. .
(e) re*- in 00 lo or da 10
!h Nu Clt
(ll at or cr Slue to Date of Po (hove,
th do 00 in fi mt Ui oo pr lR
Co Ri 9 an 10); or
(e) re ii lo or dl it WI .001 ha be
su ¡ th lis CI ha pa vW lo th
4. An æ:~ ie ol~ ~ illed ba, ~te
insc, or sin ae rn ~, !hl th ir
'I te nu as sO ii SC A, IS
(a) a Jrij oo or lril tr; ~
(b) a prerlr lo an reas no st 10 Co
Ri 9 o11h pd. .
5 My li on Ui TiI lo rel es ta ~ ~
. by gont
au and cr fi ....'l ""~.
th date ci rerd ollh de or ol int .
of Po an
of ti il th Pu Re lhl vest fiie as sh II
SdlÈA.
AlTA Qws Po 01 ni Ii (6-11.()
. I Fei 5O1lO (&'110) Pag.2 0/61
---. ._- - - _... - - -_.. . - .
. CONDINS
Da of Po fo Ii pi cl il cowl oo
of ma re ti re ii 10 pu lo . ¡n
1. DEFON OF TER
Th lo n wh us i1 ti po me:
.wi Kr. \W reli Co Ri 5ld),
la) 'Ai tl in': Th an si ii Sch A, as
'N Reca' sh al ii enl ¡m
ma li ii or de br eO li ti
pd,in by Se B(), CJ de by Se
li fi in ti ~ rI th de rI Ui Ik Slle
Di Co b: ii di_1i La is ki~
10 al 11 of ti Cc. .
(b) 'D d Po: Th da dele as 'D ri Pa in
OJ idl': Th es Ii ii de in Sc A.
SdA.
(e) 'Enli: A ax ~, Ml rm ia
lk) ~ TiI': Til af by an ai 01 ap
ma hi wo perm a ~ pir flie of
00, 01 oI si le en.
(dl '1: Th in me ii Sc A.
ti TdI 0I1e on ii Til II be '* lr ai
ob to pi, le, flie f ti is a to
(Q Th te 'n al iI
(A) IU li Ui Tit 01 li ln br opti of 2.
la as di fr pu, Pi ~is,
de'/, mvo, pe ieve, or
neofki;
ai iea li dery of mmiali.
CONTATIO OF INURAE
Th aw oflh pd sh co II fo as of Dale of
Po in fa'l ii an Insed, bu on so kl as II Ins
re an es or in ii !h La, or OO an oligli
(B) su 10 an ki by ci, me,
se I7 a ¡u I1 Mi gi I7 a ¡.
(C) 8u ki an in by iI colS to
inkR of En
TN pá sh no co inlo in Ia of any pi
lX diti, or re;
(D) a gi of an In ii a ~ dere
wi pa of ac Y8 cokl
co 1h T$
(1) if li st, sh ~. or ol
eqli i1 d li gi 1f Vr"
Il by li ia in .
lr Ii In, 01 or so kl as ai in sh l9ve ií
by Il of wa in Bl li or cove of th TiU.
fr II W1 of ei (~an es fi ii ii ih La, fi (i)
an ol se by a ¡u ro ii giv ti ih
in.
L NOTICE Of CLA TO BE GI BY IN CLA
Th In si no th ~ ri in wi (i ii ca
01 aI ~ as se kr i1 Se SIal oIlIse Co. rri)
(2) K 1h pi Ih l1 \h na
in ca Kr sh co 10 an In hereun of an
(3) I ih Ja is wl by an
il ni ca lo or da lo wt li Co iæ be
¡r fi ai En an ll rn
li Ii 0I1I In QaID pr pi no, It
Cos ia 10 It Ii Cl uO Ih pi sh
RI,
cI 0I1i or inlh is ad ki tt Til, as in, an
alile EnI of !h I' Inm,
Ii by vib of Ui po, or (i) ¡ ii TiI, as iire, is
re as ~ TiG. K th Co is pi by
in in bo wl-o by th sa
pe 01 En, fi .
(4) llh 1* is a .. or be of a
Ml ae by a wi ii
. be re ki th eæ of th pnæ.
.. PROO OF ioss
es by. ii in nm ii
In II emll Cø is ii to de th ~ Df
SC A b: es ii pi.
ai of palhllh lis C1 fu a sq
M Wi re 10 (A, (8), (C), an (0) ~ ~':
lo or da, ih Ca ma, aI iI op, ~ . as a
in. .
pn of øs Th po of ki IJ de II de le,
(ij 'lle' fi 'K': N; ma, id i:
5, DE AN PRQSECUT OF ACTnd ...N ki \h ..
kr 01 ii lh ii be im 10 an \i by
(al Upo wr reti by ih Ins, a.. ""--
ii in des as to wr S\
Co wo ha ta ag en pr
(e)'1ns C\ hi In da k: or dage. .
reas tl \h Pö Re ci an ol re ti mp
CO- of ni aI h TiI. .
(0) 'L: Th In desa n SC A, WI ii
inpi ti by la oo re pi. Th ie
'L 00 id in Øl pr be th ii of \h
ai de ii Sc A, no any r; ,., ii
ei or oi ma i1 agl7 1t pc Ih
ai h ba of k: fi lØe an shsi, ~ ai
ex pæ, ui ba of cang ih ai 0i1h k: 01
da.
co it Se7 ollh Co, llsl~' ~
iI lM ai and Yi im de, l"~'''
il defens of an In ii iI ii wh aI UV ¡i
as a cä aw by ti po ad 10 1h ~.
Tl Db is im to rr 1t. ~ ca Df ad
aliY ma\l ir ag by th po. :n ~
estate 01 eæ i1 ab st, ro, ~s,
sI ha ih i9t 10 se co of il cI (su to
al: 1I, wa II wa, 1M \t do I' ii ~
1i1h exl il a nc ri ac 10 an tr 1h l6 IS
lhri of ai ni 10 ci ~ re ca~) ID
re li mi as to tr _ caus It ad. n
in by IN ¡d.
sh no be la to an wi no ¡øy 1h le of an oi
(hl 't': i., de of \i. In de, 01 ~
ai. Th Cony wi I' pa any le, ai fi
se in in 0I ev by eI
ex in by ti Inur in ih de of. 1t
me ~ by la. .
(Q 'Pub Re': Re es lI sla 5I al
ca of ¡Ø II al ma no inwe agil by
. tip*.
AI TA Qws Pi 01 Til II (6-17-l)
r for 501140 (81110) Pag 3af6l.
COHIl (Co
coin in Se 7 01 ti Co, at it CI co~ to TERMI 11 OF UA. '
in an ix an acn or pr or Ð do an In ca at a cl im Ìh po, th Coy sh ha th
oI ac Ih in it op ma li nery or de kl lo adíl op: .
~) Tl Co sh have ti f9 in adtion lo th opns 7. OPNS TO PAYOR OTHE SE CL'
est ih Til, as in, or Ð pr or re lo or (a) To Pa
or
Ten Paymi oflh Arof lii.
da lo ih 11l. Th Co rr la any . . To pa or ler paym olll Am oflnsii un
ap ac II Ui Ie of
li po, vi or . Vi po Io wi an co, al' le, an
IV it sh be ia Ð li in. Th exe 01 Di ~ ß: by Ih In CI Ih we
~ls sI no be an ad ofla or wa of an aiM by tI Coy 14 to tI li.of pat ~
pr of IN po. If li ~ exe it ~ht te of pat an th th Coy is ob ii pa.
in 1h si, h ro do so di. Upo !h ex by ih Co d ti op, aI ia
(c) Whne Ih Co bi an acl or as a dens an otli of 8i Co to th In lØer 1I
as ie or pe by ii ¡x, th Co may po, oi li Ð ma ti pant rii. in II
pw li Ii ki a fr dell by a au of si, sh Øn, ii at ia or olli
conl ju am l ex re th ri in 10 defe, pr, f1 ai an \lga.
í1sodisli,loapanyadjlgnoroir. (b) To Pay f1 oi SeUl Wil Par OIr Thn ih
6. DUT OF INRE CLA TO COOPETE in or Wi th Ins Clim
(a) In ai ca Yi IN po pe f1 re th 0) To pa f1 oI sø wi . pi lo or in Ih
Co ki pr or pm ø ih defe d an na of an hi Climt any c: Lr ag
ae 11 pr an any ep, th II ~ lIr Uls ¡d. In ad, th Copa wi pa ai
se kllh Co ih ~ lo so ¡r or pre co, at' le, an ex ro ~ Ih
de in b act or pr, ii Ih ri kl us, Ins C1ai th we au by öi Co
at it op. ii na of Ih Ins lo Ih Jl. . up to It li of pant and Ull th Copa is
Vhve reasl by th Co, ih In, at li olat kl pa ci
Cas ex, sh ~ VI Co ai re (i) To pa or ot/ sø wi th Ins ClI1l
ai (i in se ev, oi wi, ¡ing lo or da pm lo un Ih på, to
or il 1I aá 01 pr, or eI sell~ . wilh an co, aIys' le, an exs ii
ari (ì i1 an oi IM ad Øl II II op of Ui I1 Ui In CI Ih we au by th
Co ma be ne or de lo es th Til Co . up ~ th li of pat ai li ih
or any olr ma as il. K ti Co is piio Cay IS 00 10 pa.. .
by ih lam of ih 1r kl hr th l8ir ~ ih e~ by ~ Co of ~ ol1h opO
coti 1h Cots ob ki Ui in unr pr lo Ul si (bXI) or (i), th ~s
lh po si te Ii an II f1 ot ob to ih In ui 1h po lo ~ cl
, . .. _... lo or da ol !h th pø reui 10 be
to defe, po, or ~ an 1i~ wI '''" lo ma sha_, in any ia or ob II
ih ma li ma ie su ~rali. ' li
(b) Th Co ~ ie ieuì ih In ~ .. ~ ~:li
to _ ki ex ii oa by il øuted Tl po is a co 01 ii agin ac ii lo
re . of . ~ Co. ii ki ¡wuc fo . or da su f1 in by th Ins Cl wh ha
exli, ii, an ~, at su :: . Sl lo or da by re 01 mal\ il eg by
ti ar pa as ma be de by ~ . IN po. . .
repc of tt Co, aU re. II whtever (a) Th ede dlabi of ih Coy lo lo or da li
me mata, ii bo, le, ch. !h ~ sh no ex th le of
in. eo, re e-, li, \a, (i) ih Ant d in: f1 .
an 'i vith be a dø beor or aft Da ci (ii) \h dilnc ben th vaue of li l1. as ~
Po, 1h1 rebl pert ~ ii lo f1 . da. an th val of it Tit su ID \h ri ins
Fur, L re by an au ~.of ~ aglbyll~. .
Co, k in CI sh ~ it pe, II (b) K th Co puue il ~ ii ~ 5 of Ih
wi lo wr ;ied ie of th Ccy to Co aii is oo 11 es ih T1, as
e~ .'
ofin
a ih
th in
Ðs or
anpacotIaiieofpelD
I! ie
th (iaiy..inAmnt ofins shli ro by 10%, iI
~. M ii de as oo ~ ~ . (~) ti in ~ s/ ha li iJlo ha Ih ~
Ir Clnt ¡i lo li Co lIt ~ lhis f1 da de eilt as of ih da th ~
Se sh no be di ki ~ un, ~ !h Y/ ma by th Ins Clt or as oIlt dat illS
th co, illS ne in th se an pa. . ..
re limel 01
admitili 01
\h dø Fal 0I1h In Clim kl (c) In ad 10 ih exlnl of fi un (a) ~ (b), li
silo ex II aa ¡i any rebl Co wi als pa ir co, ai .le, and
re ~, 01 gr pelh.'ro ~~as ex in in ac wi Se 5 an 7 of
re nery inform tr 1". -- ti Coil .
re in \his si, iW pn by la or
\h
go'lla ie, sh ~ an ia~ 01
Co ir \his po as ki ih cl. AlTA Qw(s P* of
Foi 501104 (8110) Pag 4 016
TI ins (617.Q) .
I
9. UMATIOf~ CONOITS(Conue) .
(i1)-:.,.'1
'I/ -IQ
Cnm/l
l'ul...,
ti ni,..
or re
Ui ~ ~ ,_. Ex iI pr in ti Ri .
de li, or 8I or cu ~ -i jo or aisoli" ' Ui sl li no
ac ki ri ~om li Lind Ii of a ~ of . ii. Ai wi ~ or co of Dl
. Unm TI, al iI ~,~ ~ ~ ~. CO or ei= ~ ir no Hi to,
:: =": ~ II an L' ~tK :: ~ of or relb ki ii po, any se ~ =
wi
' thItmaUy
penoës
oI tris
or~ or
I/dabi
01ofaL'po
~ 10
an si
be IØ
an ki
ai ou
I1 '.¡m
~ 10 ~ oI
or _''' ea to li in. po. N art ma 9M ns to Ih
(b) In li ev of Ir It iioi lf.i. $2,lX.lXorle sI be .~.~ Ani of In is
Co or wi Ui ' "-'4 "" by th Co __lI at Ui op of eI Ui
ha no ia b' Jo ~ co th Co sh of ri ~:- N ar ma wh II Mi
dermna by or unlh ha be a fi Yt ag IS ex of $2,IX;O slli -le on
di of al a a CO of Cl ji, aM ptto ~ by bo Ii Co an Ui in. MiOO
(e) Th Co Wj we1l kllh Til, as ir. Ii pa Vi pi an im ii Ru si be ii up
hu fo' . no be li fo Jo or da io ti 6i1..... Jii up ii aw ra by ii
th Cony. COH' ~ lilY
selllI ~clI'lJ
;~;;:~JmaYbeenilanYi:olcor~
01 siaswibyit li
pOindeinai15.
of ...
i UlD. TO Tl po, POl rn"
10, REN Of 1lRA RfN OR TETION (a) TI po kihr wM ai ents W .N...
OF Ll
by Il Cop;
il en an
iW ,an,
M
paym
lf' .isin..'
ailr....""
betotitt
, II po, ex ¡i ma b' oo ih an.1I Co. In ~ an pris of
al fe, ~ ex si reii !h Ai ~ po, lh po sh be CO as a wf
In by 1h 8I of Ii ~ym. (b) hiy cl of lo or da ih ar oi 01"; sl of
11,
LI NOIlTI ii Tdi ri by an ac as so da sl be
Th Mw Ii hi si be iW by 8I1I re to If po.
Co pa in ai po ii. a ~ to Yiid (e) An~ ami Ii ~ enme 10 !t PO II be ii
exc is \a in Sc 8 or to ri ii in ha wiin ai aiiri by i1n aued pe. or
a¡, as, or la sa ri wt is ex by il ~es in ~ ~ A oflt po.
~~~=~anWl-:~~~~=
(0) pi~~~~~~~~~~
In in li po vi. '- as il ei ex si, it
12. PAYII
Of lO
~ nopr(Qennt
~ ~ oIli
anui
pr ofll
. po, (i)
mo. an
(ii)Ieex
Dal
~ Ii .ai Ui ex. of kl or da have be of Pok, or (iv) ii li Am ofln.
de fi II aa wi Il Co, Ih pa II. SE
sh be _ wt 30 da. . . In ui ewan pr of it po, ii wi a in pM is l*
13. RIHTS OF RECOV UP PAYM OR SETEN ii or in in app la, il po st be
(a) WI ii Co sI ha se iI pa a cl de no to ii lhl ¡x or si pa he 10 be
in th po, ft &h be su ai ent to It Inli ld aI ol prns si re in fUlo an ele
ri (till in Cl ii ih Ttl ai al oI iG. 17, CHO OF LAW;FOUII
an ie In ie to Ih da lh hi in (a) Ch of La li Inui ån\h Ca ha
Cl ha ag FI _ ri pr, 10 Ui ex ii lI ii ri co by th po an dete
\h an of ar LO, co aI' fe, an 9j il prdi ll ii ie ui th la
pa by li Co. ~ II by ti ~, !h alei in in ie ¡irt in aw II Vi
ki CI sh exe do 10 eW il ir, ri, re 01 en 01 po of
Ii lo II ~ of th ri an re. Th ii innc of Vi ji whre ti La is lote.
ki Cl sh pe hi ~ to su, 1l, il co 01 an da sh af ti la of Vi
i:, or se Ì1 hi MI of ui In CI ji .. h La is ki to de 1I va
an to us II na of li In CI ii iny 01 cl agli TÖl th ar ii to ii in an
ms or Ii Ii Ii it al reies. 10 in an en ii 1e of ti po. In ne
If pa 00 lI of a cJ do no fi co th ca si th ai or ai1o aR it co 01
la
lo of tl ki aa Ih Co sh de li pr to delerm !h ap la.
ex olli rl to rer in af th We CI (b) CI ci Fo Ñr Ii or ot ~ ØO by
shii re li kl ii in agll Co mu be fi on in a slte
. (h) Th ca's r; of si ir Ii ~ of h or le co wi ui Ur ~ of Ai or It
. In to 1n, gi, oI pc of ii te ha aw li.
or bo no iile or ax colaie 18. NOTIES, WH SEN
Ìl th il lhl iØ SI ri. Mf ri of cl aO ar oi . or stie II rd
14. ARTI reqi 10 be giv to IE Co unlh po mu be
Ei th Cæ or II in ma de it Ui cl or . gi. lo Ih . Co al fi Ai TI nu
ci sh be üm ki wt pi to ii Tit Co,. Ai Cla Na Ii ce, 1 FI
ki Ar Ru oIli Am Li TI As Ai Way; Sa An CA 8207. Ph: 88.164
. I Foi5011~(81Øi. PaoSof61 ALTAOwsPoolT..tn(6-17-Ði
:,
.. M E
Firt American 7itle
ISSUED THROUGH THE OFFICE OF:
FIRST AMERICAN
. TITLE INSURANCE
COMPANY
Corprale Of
1 First Amrln Way
(BO) 854-3643
Santa An., CA 92707
Form No. 1402.06 (6-17-06)
ALTA Ower's Policy
SC A
Order No.
Policy No,
Amunt of Insurance $000,000,00
Date of Policy:
PM
@
1. Nam of Insured:
TB
2 , The estate or interest in the land which is covered by this policy
is:
FE SIM
3, Title to the estate or interest in the lan is vested in:
'l
4. The land referred to in this policy is situated in the State of utah,
County of Salt Lae an is describ as follow:
LE DESPTION
Form No, 1402,06 (6-17-06)
ALTA ower i s Policy
Policy No.
SC B
PAR I
This policy doe not insure agaist loss or damge (and the ccay will
not pay costs, attorneys i fees or expses) which arise by reason of:
Section One:
1. Taxes or assessments which are not shown as existing liens
by the records of any taxing authority that levies taxes or
assessments on real property or by the public records.
2. Any facts, rights, interest or claims which are not shown by
the public records but which could be ascertained by an
inspection of said land or by making inquiry of persons in
possession thereof,
3. Easements, claims of easements or encumbrances which are not
shown by the public records.
4. Discrepancies, conflicts in boundary lines, shortage in
area, encroachments and any other facts which a correct
survey would disclose, and which are not shown by public
records.
5, Unpatented mining claims; reservations or exceptions in
patents or in Acts authorizing the issuance thereof, water
rights, claims or title to water,
6. Any lien, or right to a lien, for services, labor or
material heretofore or hereafter furnished, imposed by law
and not shown by the public records,
7. Defects, liens, encumbrances, adverse claims or other
matters, if any, created, first appearing in the public
records or attaching subsequent to the effective date hereof
but prior to the date the proposed insured acquires of
record for value the estate or interest or mortgage thereon
covered by this commitment,
8.
Taxes for the year 2010 now a lien, not yet due,
the year 2011 were paid in the amount of $
Parcel No,
Taxes for
. Tax
9. The land is included within the boundaries of Salt Lake City
and is subject to charges and assessments made thereby.
10, Any covenants, conditions, restrictions, easements,
assessments, liens, charges, terms and provisions contained
within those certain declarations recorded December 23, 2005
as Entry No. 9592157 in Book 9234 at Page 5793 of Official
Records, and any amendments thereto, but deleting any
covenant, condition or restriction indicating a preference,
limitation or discrimination based on race, color, religion,
sex, handicap, familial status, or national origin to the
extent such covenant, condition or restriction violates 42
USC 3604(c),
11. A Sewer Easement recorded November 17, 2005 as Entry No.
9556278 in Book 9218 at Page 4299 of Official Records,
Loan Policy of Title Insurance
IUIY
First America nt Insurance Compay
PaII
'Loan Policy
501130 11385
My . of da IiIØ ol no Gf Il ii wi re to be ;v to Ui Co un ii po ..be gilA to
Ui Co II Ui Id II II SI 17 of II Co.
CO RI
SlT TO lH EXUSS FR COVE; TH EXCe FRai CO CCAÆ IN SC B, At TH
COlQ, F~T AlRK Tm. IN CflN, i Ca a: (il 'C ii as Ii Da d Po an, kl ti
ex sI ii Cc Ri 11, 13,.. 14, al DI d Po, agiilo or da, no ex II Am 0I1n, su N
ii by ti In by re It .
1. Ti bi ve ol hr as st II Sc A.
2. Ñ' de in or il or lI en ti Til. Th Co Ri il il is no Ii klln aglo fr
(i) A di II th TI ca by
(ij bg, tu, ii ii, Ue iiIB,Ii, or ~
(ij Ia Ii il pe or EnI klhave luO i ni or co;
(i) a do al TI no pm ae, ex, wi, se, ac, no, or de;
(iv) fa kl pe th ac Il kl CI a ib by ~ me au by la
(v) a ct UI lI iia, n, or ch Ii ii Ii aI
(vi) i do no pm li, 1I, or ii Íl hi Pi Rø ii la kl pe th ad by eI
_ ai by la or
(vi i de;d or adli po. .
(b) TI ie Ii re es ia Of as in on lt Til by i go au du 01 pa.1l un.
(e) Nr en en, öt, va, or adve ci al Ih Til Ulll be di b' lM
ac an ~ la SI Ii li la. Th l8 'eiiar Ii er ci ex ~ ki cn
li l. Ql ~ la, an lI on ti la 01 ex ~ kill OI ad la
3. lk Tiie.
4. No ~ ii aa kl an fr th Lr
(Cov RI Co on Pii21
.. wn Yl, Fr Ai Ti In ~ ha ca it co rø kl be li aI by it IU ot IS of
Di ii Pi sI ii Sc A. . ,
First Amercan TItle Insuranc Company
~ ~~~;~!'~~~" Pr. J ¡( £
.I:..:'$..
,iUll"'~ (II .
'.:-~·':'0i; !lPrJ. Gh
..:~ WIIU24..: ~ J ~
~', 111 "~1 . d.~
*gi
""', .,'~. '/,¿
Se
Tm Ke
(T Po Is '/ ~ I' SdiJ A rd B .. ii)
c.___LMTI_....--1l_dlì..II_IOoITA_onIoTA_i1.....d....d_
,..._..~'..__...._LoTl_
I For 501130 (l/llD) . Pa 1 0/6\
AI TA Li Po 0/ TiIt (l-17-)6)
. ,
. ,. .
COV RI (Coue)
5. Th vi or en 01 æ¡ la, oo, pe or go ~ (in II re to ii an ia)
rest, ~, pn, or relo
(a) th~, ir, or ~ 01 th La;
(b) h ch,ii, or ki d ai ~ tr on th La;
th lD a/ i.: or
.(e)(d)
ei JW . .
th ex d h 'I or enfo iu kl il tI no. .
6. M en ad ba on il exe 01 a go po po no oove by Co Ri 5 i i oo of th enki
Wa no, de an pa of th La, is ie il li. Pu Re se Io Ih Wi or in to er. buor kl
no. ,.
ad de an pa of th La. is nm in th Ni Res, IU only to th ex ci th en refe kl il tht
7. Th eie iithriol eido it oo!k lith exàs, de at pa of
th LR,is re il Ìh Pu Re.
8. kr ii by igoli II ha oc an is bi on li ii of a pu ii va wi ~.
9. Th ii or tI d th li Ii th ki Mi up ti Tit. TI Co Ri i1 Il is nd im kl
in ag la io an iiti kb iJ il le or lt in Ib
(i) fo, fr. _ il, cb, ii, ii, or in
(b) fai of at p8 or En kl ha do a ms or oo;
(el il in Ii no be piy ae, ex, iM. se, ac, 1), or de;
(d) fa kl pe hi ad ne to ci a do by lI me di by la
(e) a do exle lI i faie e~ or ob inva po of at;
(f a do no ii li, re, or ni in th PI Re ii Ja to pe ~ ac by el me
ai by la or
(g). a de ju 01 ~~.
10. Th li of pi of Ih le of li lned Mo i. th Titl ov an itr li or ei.
11. Th la of pi of Ih le 0I1h Ii li up ti 1l
(a) as se ti ea an ev adva 01 pr 0I1h lo se by th In t. ov any sI li b' se,
ia, or ma ar fr am of an iq or m rela 10 th La vi th iime or wo is _ .
li oo ti or co on or be Da 01 Po or
~) am ti, ax, or CO af ll of Pd i th oo is hi. in wh or il pa by pi 01
th kl sø by li ni tl ti th Ins ha ii or is dn cn DØ 01 Po 10 ad an
(b) ov th le of an as b' she! ~1s un co or oo at 0a Ii Po. .
12. Th iiit or lI ii an as 01 th in Mo, ~ th lI is sh il Sd A. or th
li. .
fa 01 ti ~ sh ii Sdle A to ve We kl th Inin Mo ii th na ii as fr ancl of II
13. Th in, lI,la ci pr, orl\ oI1hlin of th In ~ up th Til
(a) re fr li av ii .. or il pa or Ii i lX oo pi an aI l8y, 01 an ba d aI or an pa
Ii ti ii kl or an ii ii ti la 0l p1 kllh tr ae ti li 01 th In Ii be Öl ¡i
lr oo a frul or ¡Ø1r tI fe.ba, st ii, or si ad' rG 1I; or
(b) be II Nl Mo co a iieili i. fera 1l, sl ii, or si ae' Øj
Ia by re d th Ia of it re ii th Pu Res
V) to be ti, or
(i) to ~ no 01 iI ex kl i pidi lo vØ or kl a jil or le aeto. .
14. My def in or le or einc cn ti Tit or oll nm id il CO Ri 11i l31ht ha be crle or aI
or ha be fi or rm illl Pi Re sW kl Dal of Pol an pi kllh ie iill ii Lt II th
Ni Re.
Th ~ w111 pey ti 00, alk' fe,an ex ii ii defe 01
lI mail in ag by Di Fo, bu
on kllh ext pr II Ih CQ.
EXCLSI FRO COVEGE
Th fo ma ar ex ex ka
co d
(iv) en pr;
. th
(i)
Ih~olla;or
ti ~, ir di Co wil no pa klotor da co, or 1I .... 01 _ ..... 01 .. la, .._, or
aI fe.orexpslh8rbylU . Il.. _.1 '..,... .......
1. (a) Ni la, oi, pe or go ~ go ie. Th Ex 1(1) do no Il or
(ii thorre rs
to buri
zo)Nr
re. go
re lipo
th aiix.
pr iiTh
COEx
Ri l(b)
5.
~,
to an
(b)
do
~l Ih oa, us, or en oIlI Ln; no mo or ii th ~ pr un Cov Ri 6.
(ii ih ct, di, or. Io of ar 2. Rils of enn dc. Th Ex do no mc or
inO¥ er at ti La; im ti CO ¡i II Co Ri 7 or 8.
I Fon 501130 (81110) Pa 2 oi 61
AI TA i. Po oi Til in (6-17.Q)
I
i
Cl "
EXCLUS fROM COGE (Con
¡
3. DeIi, en ad da, or. ma.
(a) cr, si, as or a, kl by lt II1
(b) 00 Ki klli Co, no re ii ih Ni
Rm II Da ii Pi, Il Kr kllh ni CI ni
00 di ii iw klli Ca by DI In CI pr
ki ti da lt 1n C1 be. an.1i un ii
po
bu la 01 li si vi Ih La is si. .
5. Inkl~ or ii Íl Yl or ii pa ci te li ci li
In li Ih lI lU iilh Ir I' by tI
In ~ ar is ba ~ ii or an Cl cr
pr
or~ la.
6. Ñr ci, by re r1 te op olleli,
stte in, or si cr' rits la, thlh b'
ae&i ih il 01 ti Ru ~, is
(a) a Ii co N ii An, or
.IC)
d) a1l'
re iior
IIIo
lHEd
or da
sul."
kl tiDaE
in of
Cl Po
(i, th do no mo or írli co pr in
te Rš 11, 13,.or 14); or
.sutel. re
ii ki Of da ih _ I1 Ii be
ii "b CI hI pa VU kr li In
Ii.~ ci \h ie 01 DI In li be of
4.
DI ii or fa Ii 8l1i kl iø vi ap cI
(b) a pnlent ms lo an ie no sI II Co
Ri 13() 01 th id. -
7. hr le cn li Til br ie as ta or as
im by goll aM ae or aI be
Da 0/ Po n li da of II 0/ li Inre ti II
th Pu Rø, Th Ei dO no ro or ir tI
co pr li Cc Ris 11 lbl.
CONDIONS
t. DEFlllTDUlF T8
n.1c _ _ us ii ti po 1U:
(a) 'Ai oIln'; Th ai sI ii Sd A,
as ma bI "' or de by ei kllh ro,
ii by Si 8() or de by Se 10 of me
Cm
su wO is ob in tI pr ci SI
12(e) ii li Cc:
(Bl Ui pe or En wh ha 'co Ii li _
'I re,' i lI Ir is.ev by a
'l re,' as Ih te ar de by
ap el Ir la
(b) 'D 01 PI: Th da ~ as 'Dte 01 Pá' II
SCA. "
Ie) 'E: A ca pn, b' ni rd
(d) 'I'; Th ob se by ti ii.
co, or ot sI Ie en.
lO ii on lW l1 eli me au by
Po .
la, an llh 00 is ii paym rA a de ii ii
l:li, dä, or re;
(C) suss kl an in by ci, ri.
an ki 01 Enl
(Elsu
a gra
d an
a de de
L (0)
II an
in kl
byinr
li lmve
~
wi paymnt 01 wi va i: coyi
IlTII
(1)1 th sk si meps or ot
is ih Sl of
. (i li ii ci h pr di as 01 DaE 01
lij li an 01 Vi ii dI sulo
(2) 11h gr wl ow ih na ii,
Dale rA Po "
or
Da ii Po lo .. tQ 01 fN ki wt or ii pah
Er 01 h na in, IJ th di
~ij li cotl io ad ma _llni kl
co alan ÌßIo th I. or ie kl1h
la th li mi wa an an 10 be ob to
ad a1ll of Po an 1111 di 01 tI adv;
(3) i Ih ~ is wh-o by 81 ii
En an li na In ar bo Vi-a
. by bl sa pe or En
(F) any go ag or ii lhl is
(I) in 01 ti kl
an in 01 gu in lM il ei or
(v) th pi pi, .eiie, an oi si
gu ii "Or gu li In
Il or pe aI by la
ei
sw by th lned ~, or an pa of it wh
(vi Ii ll of fo an il ot co 01
na as an hs or no
(ü) W' re 10 (A), (81, (C), (0), an (E) ie,
(vi) Ih ai ad il as aipl wi la
ho, aI ri an de as to an su Ih th
or kl pilh le or li pr of th ie clih Inue
li bn li ac 01 ai ll or ii ii li
Co wo ha ha ni an ¡n In,
in .. SI ac ih li as a Pl
Til;
lo va dw Kn 01 th as de li
(vi) Ui lm il pa Ia an ii; an
(ix) ti II WUIs up Ð ~
de.oi ~ni;
by ~ an Io by II ki.
(e) inu: Th Ir na in Sc A.
Q) Th tø in al ii
(A) DI CMr of tI Ir 800 ea
si Íl owl ii 1M 1r, l\ ih
Il or SU ow ti Ii lo ¡Is ow
ae or as 8 In or DI fi, ei a
SOll30(8lJ) " Pag
er, or ol ma ii ag by th po.
(~ . '1 CI: M Ins c: ki or da
(9) 'i ii'; Th Mor1 de in paW
~ ih In Is reuc by li io d. aD paymts an
I Fo
eq ii 01 ti gi ar w1ly by .
Ui na ki,
3016
\
4 0/ SC A.
. (h) "i' or 'K': Ai kn, no
c:ve ki or no Ih may be ~ kl an in
by re ii th P\ Re or an ot re lI ii
co ii 01 mail ai ih Ule.
(i 'l: Th larv døs In Sc A, an aI
do no I' an pr be tt li of ih ar des
. Inni ti by la co iu pr, Th ie 'L'
Ai TA Lo Po 0/ ria In (6-17.Q)
COND lCo
in Sc A, rø an ii ti, in es, or ea ii
abu slL', ros, av, al, la, wa, or warways,
bu Ui ~ no in (l ~rn th ex Ui i ri of ac to
ag by ii pc. Th Co sh have ih rv kl se
001 ci it ch (si kllh r9 Ii th InsUl to ca fo .
reble aius) lo re1h In as kl th sta ca
do
an m ih I. is ii by Ui 1J.
01
ül \b': Mo,de of tnsl in de, or òt
se ii I' on ev by eI me
col. Th Cony wi not pa liy ie. ools. or ex
ai by la.
lk) 'P Re': Re es lI II st
al Dale of Pd lo th pi 01 Mn co no of
mall re II re prrt to ¡x fo va an wV
Kn. Wi re kl Co Ri SId), th 'N Re'
sh al Ii ei ir li li in ti re 01
th de of th LQ St Di Co b ti di wt th
La is ki.
U sh rd be li tr an li no pa 1h fe ii an ol
in by ih In ii li de ii.. ca Ii ac lht
3I ma no in ag by 1h pc.
(b) Th Co sh ha ti.ri ii ad kl th ~
cola in Se 7 01 hi Cos, at ii ai co to inlu
an pi an ad or pi ci to do æt ., ac 1h1i
it op ma be ne or de ki es th nie or th
lin 01th
in ii, as in ci 10 ¡rvent or re lo
01 da to th In. Th Co may la Ily apro
(I -ril': TI es Of in de il ScIe A.
ac ii Il l8 Ii II pc, v. Of no a si be"
le
01 th 'R or Ie 01 th TiI or a ii pw of th
of ia or wa of an pr d it po. K th Co
ex it ri lI 1h sO ft Il do so dllt.
(m) 'Unm TdI': TiI ai by ., al or
app mai Uill pe a pm pu 01
In Ii ki be re fr th oI kl ¡m,
le, or le W ti is a. oo Cl reir th de
01 ma ti.
2. COATI OF IN
Th oove 0I1i po st oo illo as of Da of
to 1h Insu. Th ex 01 th r9 sh no be II ad
(e) Wh li Coy im .. ae or as a
pi tI it to a Ma de by a oo of ~i
de as reui or pe by II po, lI Co ma
jl, an ft exp rerv th rG in it so illi,
to aw an ad ~ or or.
Pr in fa 01., Im ill aa 01 th TiIe by 1I
6. DU OF INSRE CLA TO COERTE
Ir re 11 8S1e or il II lÆ La or ho 1I
Ca to pr or pi tr ii de 01 ii acl or
II or af ooan by an In, il 00 so lo as ih
Ii) ~ aI ca wh 1h po ii or re lt
ob se by i pi mo Mo gW by a
~ an an a¡, th in sh se kl ih
pu fr th ki, or ll so lo as hi III sh ha
Co th riht kl so pi or iiWl defe ii 1h ac or
~by~ii~iianmmor~oIth
nle. TI po sI no oo II ba in fa 01 æt iu
fr ih In 01 ei (i an es or in in lhe La, cr r~
an ob se by i pi ro Mo ~ve to ih
Ins.
3. NOTIE OF CW TO BE GIV BY INSURE CL
Th In sh no Ih Cc pr ii Yt (II ii
ca 01 an Ii as se bt In Se 5(1) 0I1h Co,
pr, ii ii rt io lI, aI it op li na of 1h
In b th pi, 'M II by 1h ~, ti
Inre, at th Ccpanys ex, st gM 1h Co al
re ai (i. il se, eW ob wh,
JI or de 1h ac or JI, or eff
se ir IiI in an oi ia act th
in th op of 1h
Co ma be ne 01 dele " IS 1h Til, th
li of lÆ Ins Mo, or ai ol ma as ii. U ti
(i) in ca Kn sI co to ., In of any da 01 ti or
Comp is pr. by h fa 01 ti in kl fi ih
in Ih is ad ki th' Til cr ti ie ii th Inm
req oo th Cas ~ to tI Ins inr
Mc, as in, anlh ii ca lo ci da fo whrJ
li-p sh lete. ii an iSly or obga to
de, pi, or co My Ii wi re to lt mar
th Co may be ia by \n Ii It po, or (i if lt Tit or
th li of li 1n Mo, as ii, is rè as
Unm TiI. If th Co is prli by th Ia d th
cr ma re su oo,
(b) Th Co m¡ reso reii ih in
In CI kl pi ii no, hi Cos lia ki
Cl to suio ex un oa by any au
th In aa LJ th po sh be re klth ex
re 01 th Cc an to im b' ex,
4. PROO OF ios
be denale by ih au reti oI1h ~, aU
ofth~,
In.ih ev li Co is IJ il de th aiin of
ki or da th ~ ma, at it op, reii IS a
CO of pa ht I1 Inre CI fi a si pr
in lM coing, at su real ti and plces as ma
re, il v. me manta, Ii bo, lers,
ct, memo, eorespondeiice. fI e- di Iape,
an vi wh be a da bekn or af Date of Po, 1h
01 LO. Th pr 01 lo ro de th defe li,
re pe to th lo cr da. Fi, L re by
en, or ol ma in ag by hs po 1h
ii do re d ih Co, lt in Cl
co th ba rJ ki or da am sh sl, lo 1h ex
po,lh basi of cikUti th ai of ti lo or da.
5, DEFENE Al PR OF ACS
(a) Up wr ie by ti in, an ujd to ih
op co in Se 7 of th Co, ti Coy, at
st gwlll pe,.il wr, lo any au repres
of th Co to ex, ii an co al Ii 1h re in
Ii aJ or co of a äd pa lh re _ lo lh
lo or dl. AI inat dnle as. coli by ih
in Cama pr to th Cq pir 10 1h Se
ils ow co am wi im dela, si pn lo th .
sI no be dis to oI i., in ii re judmenl of
de of an in ii It in wl an tI pa as a
the Cony, " is ne in th admi of ih dain.
cl cx by ti po ad kl th ln. Th ob is
Ii lo on th sI ca of ac aI ma in
I Fon 501130 (8/110) Pa 4 0161
Falii Ii tlJnsre CI 10 SIIo eJ inr oa,
pruc any ~ reue ri, or gr pe
AlTA Lo Po 01 Ti Ins (6-11.()
CON (CoI
kl se ie ne ii fr th p; as
ie in li su, lß pi by la or go
re_ si iø an ia 01 .. Co un lI
¡d áS klll cI
.7. OPON TO PAY OR OTl SETLE ClS;
TETI OF UA
In ca d a ci _li ix, .. ~ sh ha th
lo ad op
(a) To Pa ri Ten Pa iill Ai oIln or
inii an th va 0I1h TIM si kl it ri in
agt by ih po, or
fiv) . i go ag or in is th
Tit or ii In Mo in sa d il Ìl
Ins Cl \b ar it pa Íl th ~ 01 li
oo 01 gura.
(b) Uie Co iu il ri lI Se 5 01_
Co an is ur in es II Tl or hle of
\h in ib, as in
(i) li Ai of In ii be in by 10%,
10 ii .. kiibledl18S.
(Q . To pa or ii pe d ti Ai d In
lI li po klr Yd ;n lx, iirn' le, an
exp ii by li In CI Ii WI ai
by li Cc "" 10 th ti 01 pa or le 01 pat
an öill Co is oI kl pa or .
(ïl To pi th kl lo ti ailR 1I
ii 0i11 da ii pu, tllh wö an co,
1l' li, an .. na by ti in CI
Ii Wl au by lh Co "" kl hi ti 01 pu
. . an öi1l Co is 001o pay,
Wh h Co pi Ih ln, Ih mu
shlr, .. an ai 10 ii eo ti ki
anlh In Mo, klwi an aili se,
Up II ØJ by li Ca of ei 01 hi iø
pr lo in iU (a)() or (il, ai ia an ob of
an
(ñ) th Il CI 5i ha 1t rn kl ha Ih
lo or da de eh as of li da h da wa
ma by Ih in aa 01 as ofll dal is se an
pa.
(e) In ih ev \h In ha qid th Ti1 in li
ma de ii Se 2 of Ui Coró or ha co
th Til, ih ii ei oIli of h Co sh co as
58lo in Se 8(a) 01 th Co
(d) In adn ID lt ex ot ia li (a), (b), an (c),
lt ~ wi al pa Ih lX, ai' _, ai
.. ir II ae wi Se 5 an 7 0I1h
~.
9. LI A TIN OF LI
(a) W li Co ess ii Tit, or re th
th Co to Ih In in li po, inlh kl ma 1I
al dele ie, or en, or ci th la Ii a rv of
paym re in ii su, shli, ii any
Ii or ob kl de pr, or co ;n li
or øs II li d th in li, aD as in, in a
(b) To Pa ri Ot Se Wi Pr OIr 1I h
In 01 Wdhlh in Cl
(i to pa or ~ se wi oi p; ø 01 in
ti nø 01 II in CI rr i: in ag
II li po. In ad, ih ~ wi pa an co,
aa kl or fr 1I La, or ci th da of Unni Tiie,
ie di ma by ir me, ii Il an
th eo of al ap, it sh ha fi pe it
oI wö ie ti 1h1l1I an sh 00 be Ia fo an
kl 01 da ca to II In
(b) In ih øv of an ii,. ir it by th
mn' li, WI up in by hi Insure Clat
Ui we au by ih Co "" kl1t li of pant
Co or wi th Cos ai ti Co sh ha
ro Ia fo lo or da un lh ha be a hi
an tilh Co is ot kl pa ri
d8 by a au ot conl ji an li Ii
(i) kl pa or .. se wö ti.1n Cia
ai ap ad kl il ni or kl ti li ot tiln
ti ki or da ¡m ø _ii po,lo wi
tl, as ii.
;n co; al le an ex ii by th
In fo Ia YO il by ii in. in se II
Ins. Cl ti WI au by Ih C~ "" ki
Ih &n 01 pi an IIIi Co is ob to pa.
Up lt ex by Ii Co of ei of lh op
¡r b ii sd (bKQ or ~), th ~s ot ki
tI In ir li po b ti da lo or da, oU'
1h th pame re kl be ni, sh te, ii
Ii
il ia ri oI to de, JI. or c: an
(c) The Co si no be Ii ø lo ri da ID 1I
ci or si will pr wi co of ti Co.
10. REOUCTOF INURAE; REN OR
T'TI OF LI
(a) AI P8 lI Ih pc, e~ pa ma fo
tl, aIys' fe an ex, si re ih Am of
In by il ao of II pa Ha, il pa
Ir
ma pr ID II ac 01 fil as pr ii 5e 2 á li
L DERITI AN EX Of LI
TI po Is a ai of ii ag acl nø
kl or da su or ii by Ih In Ca wh
ha si ki or da by re 01 ma ii ag by
Co sh no re ti Ai 0I1i ii in
IN po ex kl lt exnt hi ti payme re \h
(b) Th vo sa ii re 01 th In
Ih po.
Mo sh tete al Ia of th Co ex IS
Ii) Th ex of id of Ui ~ fo ki or da
lA f1 po ii no ex ti le of
11. PAYI OF LOS
. (i ti An olln,
(ñ) th 1i,
rii) th dl bø ih Yl of ih Ti as
. I Far 501130 (81110) PI 5016\
pi ii Se 2 oflh Co
MI iI ai th ex ot lo or _ ha be
de fi ii ac wi li Co, th pa
sI be ma wiÌ130 da
AlTA Lo Pol 01 TiI IN (6-17-0)
CON (Conue
12.. RI OF RECOVY UPO PAYI OR SEME
(al Th Cos ~ kl Re
ma wh ih Ani 0I1n is S2LX,OO or le sh be
Vt Ih Co. si ha se ai pi a _ un
ai a1lh op of el th Coy or Ih In. AI
!h
$2,00,00 sI be ii or wh ag kl by bo th
ti i*. H sh be si an en to Ih ri 01
in Cla in I1 TiI Of In t. an ai ot ~h~
an re in re ti li da Ii li ln CI ha
ag an pe or pr, 10 ih ei ii li ai 01 an
lo ai, aI'le, nl ex pa by ih~. If
I8 by Ih ~, II In CI sh ex
do 10 ev .. bi 10 ih Co of Ih ri
nl rw. . Th In Qa si pe lh eony to
ai ma whn th Ar d In is in ei of
Cony an th In. Ar pu kllhs po iId
ii th Ri sh be ~ up lI pa. Ju ~
ti aw rire by li Aitikls) ma be er ii an oo
01 cx ji.
14. UA UI TO TH PO; PO EN
CO
(a) TI po ti wi all en, Wan, Il
sue, CX, or sø In !h na d ti Ins CI and
to k by Ui Co~y is ii de poli nl co betw !h
II ir ti r9 nll8
th po sh be co as a wh,
kl us th na 01 II In Cl ri an 1r or
Ins an ih Co. In ii any pr of th po,
K i pa or III ii a clim do no Uy co ih lo of Ui
ii CI th Cony sh defe th ex 01 il ri to
I8 LI af th In CI sh hl1l it LO.
(b) An da 01
su da sh be re to ti po.
(e) An amme of or enme kllh po lI be in
lb) Th In's Rihl ån üi .
0) Th ow of lI 1nd ma re or
st th pe ia 01 an de lJ gu,
lo lJ dage ih cI ou ci1l stbi Ii
Ih Til 01 li ii th Inm Mo or by an adi as
. Mi and au~te by an au pe, or ø¡
ex or ol mo VI tø Ii pa ie a
il by Sd A Ii th r*.
po 0I1h TiI fr Ol. il 01 ti in 1i, or
re 8f colara S8 fo ih 1n, K it do oo
a pa 01 th pacy an is Sl kl aI ci it ie an JI
~.
(dJ EJ eiid kl ti po is 1\ an li is ma
Ex as ih end ex st, ¡do no (i mo
al lt ri or pr 01 1h &e 0I1h In
an of li te an pr cill po, Oij mo an in .
rAl ii ih In ex a ii pr in (b)(, bu
en (il eæ ih Da 01 Po, or (iv) ii ti
Anld Inra.
ha Kn d íi ci ad kllh Til or ih ie 01
th In ~ ii ag by fI po, th
15. SE
In th ev an pr d ti po, in wl or in J* is
~. sh be II 10 pa tf Oll pa ci an kl
li in or ii lI ~ la, II po WI be
ii ag by tI po Ii sI ex Ih am il
de no ID ii lI pr N su pa he to be in,
íi, lo to ti Cæ by ie 01 ti in by ih
mu CI iib Ccs ri ii si
(e) Th ~s Ri Ag NoLr 0t
bu aI ot ixns sh re in fi fo an eI
16, CH OF LAW; FOM .
(a) Ch cilJ Th in ac th Co
Th Cos rJ 01 su in ih Inn's rG1s
has unei li ri co by th i* an de Il
in, . gu, olr po 01 in, or bo,
Ii ii re pr ai ap to ti in rG,
ag no iü ii ih ri 0I1h Ir to
IJ ch thfo ii rørø lK li la aI
ri an te or anti ai Íl th
re, or en ii po Ii ti ii 01 !h
in öi ad suti rils
ju wh th La is lo.
Th Cos ~ of su AI no be av by
8Q of th In I. by 1I 00 (ex an .
de in Se l(e)(F) oIlh Cos) wh ac ih
Th, ih ai or lf lI sh aw it la of!h .
ju wh th La is io ID de 1Iva of
cl agnslh Til or it li of lt Ins Ma ih iM
1n Mo as i re of an ii, gu, ot po
ad to il in an kl ii an en lI te d Ii
d ii, lJ bo, inlh oI wilK be li In lI
po, In ner cu shlI lX.lJ ar ap it c.
ttis JK,
of
13. ARRA TI .
Ei th Co or Ui in ma de tllI cI
or aiy sh be SI kl ai pilo ih TdI
Inir Aiti Ri of Ui Ar La Til As
rRil Exce IS pr in th Rd, it sh be no jor
lJ ai wi da or co of ol pe.
Ai ma ma ii, iu ai no Ii ii, an aN
or clim betw ih ec an li In ar ou 01 or
_ kl ti po, ar se Íl am wi Is is or
II ln 011 po pr, lJ to an . airs lJ cl
la pr lo derr ii Ip la.
(b) Chc 01 For: An Ii or *r pr
br by ti In ag II ~ in be ti o. it a
st or fede .lX Vi Ui Un St of Ai or iI
te
ha ap ju, .
17. NOTIES, WH SE
Nr no of ci an an ot no lJ st ii wr
reui kl be gi ii th eo lI th po mu be ;n
to Ih Co at Fi Am Ti Iasura Compa, AI:
C1 Na Ii CI, 1 FI Am Way sa An
CA 1207, PI: 88.1M2
ar ou olll tr gi ri ID th po. AI ~
. I Fo501130 (8I1Æl) PaSofSI
ALTA Lo Po ofTil in (6-17.()
Form No. 1056.06 (6-17-06)
ALTA !D Policy - Form 1
SC A
ORDER NO.
Policy No.
Amnt of Insurance: $000,000.00
Date of Policy:
at
PM
1. Nam of Insured:
wells Far Ba, N.A.
it.s succsors an/or assign, as defin in
Pargrpb i (a) of th COit.ion an St.ipulat.on
of this policy
2 . The estate or interest in the land which is encured by the inured
rortgage is:
FE SIM
3. Title to the estate or interest in the land is vested in:
TB
4 . The insured rortgage and assigrnts thereof, if any, are describ
as follow:
A Deed of Trst given to secure the arunt of $000,000.00 and any
oter aiunts payable under the tenn thereof, dated and
recorded as Entry No. in Bok at
Page of Official Reords.
TRUSTOR
TRUSTE
BENFICIAY:
5. The land referred to in this policy is situate in the County of Salt
La, State of Utah, and is describ as follow:
LEGAL DESCRIPTION
Page 1
Form No. 1056.06 (6-17-06)
ALTA Loan Policy - Form 1
Policy No.
SC B
EXION FR CO
This policy does not insure against loss or damge (and the Cany will
not pay costs, attorneys' fees or expnses) which arise by reason of:
PAR I
1. Taxes for the year 2008 now a lien, not yet due. Taxes for
the year 2007 were paid in the amount of $ . Tax
Parcel No.
2. Any charge upon the land by reason of its inclusion in West
Valley City and the Granger-Hunter Improvement District.
3. Easements as shown on the Official Plat recorded December 6,
1962 in Book Z at Page 30.
4. Protective Covenants recorded December 28, 1962 as Entry No.
1890564 in Book 2001 at Page 436.
Page 2
Form No. 1056.06 (6-17-06)
ALTA Lo Policy - Form 1
Policy No. 0135611
SC B
PAR II
In addition to the matters set fort in Par I of this SChedule, the title
to the estate or interest in the land describ or referred to in Schedule
(A) is subject to the following matters, if any be show, but the Comany
insures that these matters are subrdinate to the lien or coverage of the
insured iortgage upon the estate or interest:
NONE
* * *
Page 3
ENDORSEMENT
Attached to Policy No.
Issued By
FIRST AMERICAN TITLE INSURANCE
COMPANY
The Company insures against loss or damage sustained by the insured if, at
Policy: (i) the land does not abut and have both actual vehicular and
pedestrian access to and from
(ii) the Street is not physically open and publicly maintained, or (iii) the
insured has no right to use existing curb cuts or entries along that portion of
Date of
the Street abutting the land.
the policy. Except as it expressly
This endorsement is issued as part of
the terms and provisions of
states, it does not (i) modify any of
(ii) modify any prior endorsements, (iii) extend the Date of
increase the Amount of
Insurance. To the extent a provision of
the policy,
Policy, or (iv)
the policy or
a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is
the policy and of any prior
endorsements.
subject to all of
the terms and provisions of
Dated:
First American Title Insurance Company
By:
Authorized Signatory
ALTA 17-06: Access and Entry
ENDORSEMENT
Attached to Policy No.
Issued By
FIRST AMERICAN TITLE INSURACE
COMPANY
The Company hereby insures the owner of the indebtedness secured by the
mortgage referred to in Paragraph 4 of Schedule A against loss which the
insured shall sustain as a result of any exercise of the right of use or
maintenance of
the easement referred to in Exception _ of Schedule B
Part lover or through the land.
This endorsement is made a part of
the policy and is subject to all of
the
terms and provisions thereof and of any prior endorsements thereto. Except
to the extent expressly stated, it neither modifies any of the terms and
the policy and any prior endorsements, nor does it extend the
of the policy and any prior endorsements, nor does it increase
provisions of
effective date
the face amount thereof.
Dated:
First American Title Insurance Company
By:
Authorized Signatory
CLTA 103.1: Easement
ENDORSEMENT
Attached to Policy No.
Issued By
FIRST AMERICAN TITLE INSURANCE
COMPAN
The Company hereby insures the owner of the indebtedness secured by the
mortgage referred to in Paragraph 4 of Schedule A against loss which the
insured shall sustain in the event that the owner of the easement referred to
in Exception _ of Schedule B shall, for the purpose of exercising the
right of use or maintenance of the easement to compel the removal of any
portion of the improvements on the land which encroach upon said
easement.
This endorsement is made a par of
the policy and is subject to all of
the
terms and provisions thereof and of any prior endorsements thereto. Except
to the extent expressly stated, it neither modifies any of the terms and
the policy and any prior endorsements, nor does it extend the
effective date of the policy and any prior endorsements, nor does it increase
provisions of
the face amount thereof.
Dated:
First American Title Ins urance Company
By:
Authorized Signatory
CLTA 103.3: Easement - Loan
ENDORSEMENT
Attached to Policy No.
Issued By
FIRST AMERICAN TITLE INSURACE
COMPAN
The Company hereby insures the insured against loss or damage which the
the land to be the same as the
insured shall sustain by reason of
the failure of
delineated on the plat of a surey made by
on , designated Job No.
which is attched hereto and made a part hereof.
a copy of
This endorsement is made a part of
the policy and is subject to all of
the
terms and provisions thereof and of any prior endorsements thereto. Except
to the extent expressly stated, it neither modifies any of the terms and
provisions of the policy and any prior endorsements, nor does it extend the
effective date of the policy and any prior endorsements, nor does it increase
the face amount thereof.
Dated:
First American Title Insurance Company
By:
Authorized Signatory
CLTA 116.1: Survey