The Deed: Warranties of Title Flashcards
At closing, the deed becomes the operative document
-The deed passes legal title from seller to buyer
-To do this, remember that the deed must LEAD: Lawfully Executed and Delivered
Define lawfully executed
The deed has to be lawfully executed in accordance with the given jurisdiction’s formal statutory requirements
All deeds must: (LE)
- Be in writing (Statute of Frauds);
- Identify grantor and grantee;
- Describe the property to be conveyed;
- State the grantor’s intent to convey; and
- Contain the grantor’s signature.
Define delivered
Words or conduct that evinces an intent to be immediately bound by the transfer.
–Manual delivery is common, but it is possible to establish delivery by words alone if the required intent is present
What are the three types of deeds?
*General Warranty Deed (or Warranty Deed)
*Special Warranty Deed
*Quitclaim Deed
What is general warranty deed?
Warrants against all defects in title, whether they arose before or after the grantor took title.
–Contains six promises or covenants that grantor makes not only on behalf of herself, but on behalf of her predecessors in interest.
When are the three present covenants breached, if at all? (GWD)
At the time of delivery
When are the three future covenants breached, if at all?
At some time after delivery
The Six Covenants contained in the General Warranty Deed
–A covenant of seisin
–A covenant of right to convey
–A covenant against encumbrances
–A covenant of general warranty
–A covenant of quiet enjoyment
–A covenant of further assurances
“South Carolina Exports Good Quality Fruit.”
Present Covenants (GWD)
-A covenant of seisin: Grantor promises that she owns the land she purports to convey.
-A covenant of the right to convey: Grantor promises that she has the power to make this transfer and that she is under no temporary restraints on alienation (meaning restrictions on her power to sell) or disability that would compromise her capacity to make this transfer.
(In most instances, this serves the same purposes as the covenant of seisin.)
-A covenant against encumbrances: Grantor promises that there are no encumbrances on the property.– (Encumbrances include, among other items, mortgages, liens, easements, and covenants.)
Future Covenants (GWD)
*A covenant of general warranty: Grantor promises to defend grantee against any lawful claims of title asserted by others and will compensate the grantee for any loss that the grantee may sustain by assertion of superior title.
*A covenant of quiet enjoyment: Grantor promises that grantee will not be disturbed in possession by a third party’s lawful claim of title.
(This covenant is, for all practical purposes, identical with the covenant of general warranty and is often omitted from general warranty deeds.)
*A covenant of further assurances: Grantor promises that she will execute any other documents required to perfect the title conveyed.In other words, she promises to do whatever administrative or ministerial things needed to perfect title if it later turns out to be imperfect
What does it mean that future covenants run with the land?
If A gives a general warranty deed to B, and B sells to C, A is liable to C on any of the future covenants in A’s deed
Under the common, law did present covenants run with the land? Could present covenants be assigned to a remote grantee at common law?
Under common law, present covenants did not run with the land
Traditionally, only future covenants ran with the land to remote grantees.
–Present covenants could not be assigned to a remote grantee at common law.* If A gives a general warranty deed to B, and B sells to C,A is not liable to C on any of the present covenants inA’s deed. A is only liable to B for breach of the present covenants.
What is a special warranty deed?
–Contains warranties only against the grantor’s own acts but not the acts of others.
-Also called the bargain and sale deed.
What two promises does the grantor make in a special warranty deed?
-Grantor promises that she owns, and can sell, the property.
-Grantor promises that Blackacre is free from encumbrances created by the grantor.
(An encumbrance is a right to, interest in, or legal liability on real property that does not prohibit passing title to the property but that typically diminishes its value)
