Deeds

Question 1

What are the three main types of deeds?

Answer 1

1. General Warranty Deed
2. Special Warranty Deed
3. Quitclaim Deed

Question 2

The purpose of the Implied Warranty of Quality is to allow buyers to sue contractors with whom they have no privity of contract.
A. True
B. False

Answer 2

A. True

Question 3

When we talk about Implied Warranty of Quality or any of the deed covenants that come from the warranty deed we are only talking about it in a _______ _________ context.

Answer 3

post closing

Question 4

Suits on the warranty can arise only after the closing has taken place and the plaintiff has accepted the _______.

Answer 4

deed

Question 5

Lempke v. Dagenais:
_________ _______ ___________ is not necessary for a subsequent purchaser to sue a builder or contractor under an implied warranty theory for latent defects which manifest themselves within a reasonable time after purchase and which cause economic harm.

Answer 5

privity of contract

Question 6

Privity of contract is not necessary for a ___________ __________ to sue a builder or contractor under an ______ ________ ________ for latent defects which manifest themselves within a reasonable time after purchase and which cause economic harm.

Answer 6

subsequent purchaser

implied warranty theory

Question 7

Privity of contract is not necessary for a subsequent purchaser to sue a builder or contractor under an implied warranty theory for _______ ________ which manifest themselves within a reasonable time after purchase and which cause economic harm.

Answer 7

latent defects

Question 8

Somebody hires a contractor to build a garage and the contractor does and after the garage is built the owner of the home has to sell and move. The buyer has a home inspection, and it looks okay so they buy it and shortly later stuff goes wrong with the garage. They reach out to the people that made the garage and the builder is like yes, I can help you but then they don’t show. This is a lawsuit where we call them the subsequent purchaser is trying to sue the contractor because the SP is upset about the fact that the property is up because construction was poor quality and things have gone wrong quickly.

Construction said you can’t sue me because we have no privity of contract. There is no contract between the builder and the new homeowner. The contractor promised the prior owner.

This is a question of whether or not subsequent purchaser can sue the contractor and get recovery?

Answer 8

The court finds that they can, but they limit it to latent defects which manifest themselves within a reasonable time after purchase and which cause economic harm.

Question 9

This is an important decision for public policy. If it had gone the other way contractors could have arguably defrauded their customers in a way. You can image a contract builds a house new contraction and they sell to their best friend who has no desire to move in but they are doing it so that it is sold to one person and now they sell to the person that is moving in.

If we limit liability to the first person who has privity of contract with the builder, then the builder could convey to the strawman to get out of doing a good job and that is not what we want. We want them to adhere to an implied warranty of workman like quality. They should build stuff that is safe. We don’t want them to do bad work and not have the opportunity to have someone call them on it because their ability to be sued to the person with whom they have privity of contract.

The court is providing an opportunity to the _________ _______________ to be made whole when they have bought land with an improvement and the improvement is not up to par.

Answer 9

subsequent purchaser

Question 10

Sellers prefer to sell with warranty deeds.
A. True
B. False

Answer 10

Answer: B False.

Warranty deeds come with 6 warranties and provide 6 ways for the buyer to sue the seller.

The seller does not want to be sued 6 possible ways.

Question 11

There are three types of deeds generally used in the US today:
1.
2.
3.

Answer 11

1. General Warranty Deed
2. Special Warranty Deed
3. Quitclaim Deed

Question 12

Rockefeller v. Gray - Sherriff’s deed falls within what category?

Answer 12

Quitclaim Deed

Question 13

What type of deed is the industry standard?

Answer 13

General warranty

Question 14

If you tell me you bought a house, I am going to assume you got a ______ _________ _________ when you bought it. You want as the buyer. Standard.

Answer 14

General Warranty Deed

Question 15

_________ _________ and ___________ _______ are the same thing. This has the 6 different covenants.

Answer 15

General Warranty and Warranty Deed

Question 16

________ ________ kind of good for the buyer and seller. It is kind of good for seller because it limits their liability to things that they may have done that impacted the title to the property. Within the seller’s own control. If the seller messes up the title, then they are going to be liable for it . If the problem happened before the seller got the property, they are not going to be responsible for it. So, it limits liability.

Answer 16

Special Warranty

Question 17

Why is special warranty good for the seller?

Answer 17

If the seller messes up the title, then they are going to be liable for it. If the problem happened before the seller got the property, they are not going to be responsible for it. So, it limits liability.

Question 18

_________ ________ kind of good for the buyer and seller. For the buyer a _____ ________ _______ is better than a Quit Claim Deed because it gives you some opportunity to sue the seller. If the seller did something wrong that impacted the title negatively then the buyer can sue them and get recovery.

Answer 18

Special Warranty

Special Warranty Deed

Question 19

_________ _________ is the seller’s favorite because they cannot be sued. You can transfer property via _______ _______ all day long. If you have that it doesn’t mean that you have less rights to the property, but you do have less people to sue.

Answer 19

Quitclaim Deed

Quitclaim Deed

Question 20

The seller is transferring all of the rights they have in the property if any to the buyer. What type of deed?

Answer 20

Quitclaim Deed

Question 21

Buyers prefer to purchase with a quitclaim deed.
A. True
B. False

Answer 21

B.False
Buyer’s don’t want that because they want to be able to sue the seller.

Question 22

How many warranties of title in warranty deeds?

Answer 22

6

Question 23

_________ ________ are broken if ever at the time of conveyance (when the deed is delivered). Statute of Limitations begins to run at the date of delivery of the deed.

Answer 23

Present covenants

Question 24

Present Covenants: are ______ if ever at the time of __________ (when the deed is delivered). ______ _____ ___________ begins to run at the date of delivery of the deed.

Answer 24

broken
conveyance
statute of limitations

Question 25

What are the three present covenants?

Answer 25

1. Covenant of Seisin
2. Covenant of Right to Convey
3. Covenant Against Encumbrances

Question 26

Seller says to the buyer I own this. It is mine. That is what seisin means.

Answer 26

Covenant of Seisin

Question 27

Builds upon covenant of seisin. Not only do I own it, but I have the right to convey it to you. Sometimes people are like well if you own it, don’t you always have the right to convey it? The concern is that sometimes people are a trustee they might have legal title, but they might not have the authority to transfer. That is why we have two separate covenants to address this. Often if the problem is that your grantor O is a bad guy and O sells to A and then turns around and sells the same exact same thing to B you are going to sue O if you’ve gotten a warranty deed under seisin and right to convey. Both because when he sold it to you he didn’t own it and he didn’t have the right to convey it to you so it is fine to do both.

Answer 27

Covenant of right to convey

Question 28

no encumbrances on the property at the time that the deed was delivered. Some examples are financial - unpaid taxes, unpaid assessments, or liens. Others might be easements, or estates that are less than a fee simple absolute.

Answer 28

Covenant Against Encumbrances

Question 29

6 warranties that come with a warranty deed three are _______ and three are ______.

Answer 29

present
future

Question 30

Easier to win under a ____________ __________.

Answer 30

present covenant

Question 31

If you get title by a warranty deed, try to make sure if there is a problem that you find out about it before the statute of limitations expires on the present covenant. Most have about 10 years on that present covenant but varies by jurisdiction. Present covenants are easier to win under because they are broken __________________________________________.

Answer 31

if ever at the time of conveyance which means when the deed is delivered.

Question 32

Harder to win under a __________ ________ because you can’t win under _________ _________ until you can prove your injury.

Answer 32

future covenant

future covenant

Question 33

Harder to win under future covenant because you can’t win under future covenant until you can prove your ___________.

Answer 33

injury

Question 34

Harder to win under because you can’t win under future covenant until you can prove your injury. The court will take a bizarre view of injury – the idea being that you’ve either got to be evicted from the property or buy up the owner of a paramount claim or some other sort of tangible injury like that. True or False.

Answer 34

True

Question 35

____________ ____________ are not breached until the grantee or his successor is evicted from the property, buys up the paramount claim, or is otherwise damaged. Statute of Limitations begins to run at the time of eviction or when the covenant is broken in the future.

Answer 35

Future Covenants

Question 36

Future Covenants are not _________ until the grantee or his successor is evicted from the property, buys up the _______ _______, or is otherwise __________. Statute of limitations begins to run at the time of eviction or when the covenant is broken in the future.

Answer 36

breached

paramount claim

damaged

Question 37

Future covenants are not breached until the ______ or his _______ is __________ from the ________, buys up the paramount claim, or is otherwise damaged. Statute of Limitations begins to run at the time of eviction or when the covenant is broken in the future.

Answer 37

grantee

successor

evicted from the property

Question 38

Future covenants are not breached until the grantee or his successor is evicted from the property, buys up the paramount claim, or is otherwise damaged. _________ ____ ________ begins to run at the time of eviction or when the covenant is broken in the future.

Answer 38

statute of limitations

Question 39

from the seller to the buyer no one is going to have better rights to this property than you. Seller says to the buyer no one is going to have better rights to this property than you, I will defend you in the lawsuit and I will pay damages if you lose.

Answer 39

Covenant of General Warranty

Question 40

similar. It says No one will disturb you in your use and enjoyment of the land. Seller says to the buyer no one will disturb you in your use and enjoyment of the land and if they do, I will defend you in the lawsuit and pay damages if you lose.

Answer 40

Covenant of quiet enjoyment

Question 41

seller says to the buyer if I have forgotten to sign anything in order to convey the rights to this land over to you, I will be happy to sign it again. Kind of like an I’s dotted, T’s crossed paperwork type of covenant.

Answer 41

Covenant of Further Assurances

Question 42

What are the three future covenants?

Answer 42

Covenant of general warranty

covenant of quiet enjoyment

covenant of further assurances

Question 43

bought pink acre from O, and you saw a deed that showed that O owned it and you felt comfortable to give O your money to buy it. You have moved in and you have just unpacked the last box and you are feeling good.

Then there is a knock at the door, and somebody shows up and says who are you and they say this is my house and they whip out a deed that is from o  them two months before you bought from o. They may own it, you don’t want to re pack boxes so you try to judge the situation and you go online and find a form quitclaim deed and fill it out from the person at the door over to you and then you say I really don’t think you own it but here is 1,000 and if you sign this over to me I will give you the 1,000. did you just waste 1000? maybe but do you know how much it would cost in hiring the attorney and going to court and pursuing the quiet title action and then maybe still losing having to sue O under the deed covenant if you were lucky enough to buy with a warranty deed? Whole process. by paying 1,000 to the person at the door with the deed that appears to be more valid than yours you have just

Answer 43

bought up a paramount claim. Injury that you can get compensated for under the warranty deed.

Question 44

All _________________ may be classed as either:
* A pecuniary charge against the premises, such as: mortgages, judgment liens, tax liens, or assessments; or
* Estates or interests in the property less than the fee: like leases, life estates, or dower rights (antiquated concept); or
* Easements or servitudes on land: such as rights of way, restrictive covenants (Private restriction), and profits. – permission to go on somebody’s land and remove a natural resource from it.

Answer 44

encumbrances

Question 45

Easements or servitudes on land: such as rights of way, restrictive covenants (Private restriction), and profits.

What does profits mean?

Answer 45

Profits are permission to go onto somebody’s land and remove a natural resource from it.

Question 46

The purchase agreement provision that says subject to all restrictions of record – often it will say subject to all easement servitudes and restrictions of record if you agree they are not an _________________ for purposes of the deed warranty.

Answer 46

encumbrance

Question 47

In a suit on a warranty deed covenant, it is easier for the purchaser to win under a future covenant.
A. True
B. False

Answer 47

B. False

Always easier to win under a present covenant.

Question 48

The Covenant Against _________________ cannot be breached unless the encumbrance existed at the time of the conveyance.

Answer 48

encumbrances

Question 49

The Covenant Against Encumbrances cannot be breached unless the encumbrance existed ________________________________________.

Answer 49

at the time of the conveyance

Question 50

In order to claim breach of the covenant against encumbrances, that covenant must have existed at the time of the conveyance. True or False.

Answer 50

True

Question 51

Coal, oil, diamonds, gold, silver, gravel, salt.

Answer 51

Mineral Rights

Question 52

Generally, we want to own the _________ __________ under our property.

Answer 52

mineral rights

Question 53

Make sure clients are ______ ________ prior to purchase.

Answer 53

duly diligent

Question 54

A special warranty deed protects the buyer more than a quitclaim deed.
A. True
B. False

Answer 54

A. True

Question 55

Rockafellor v. Gray
The covenant of seisin does not run with the land, and an action thereon may be maintained by a remote grantee.

To hold original grantor conveying by ________ _________ to his __________ and protect subsequent grantees as much as possible.

Answer 55

warranty deed

warranties

Question 56

Rockafellor v. Gray

The ______ _____ ________ does not run with the land, and an action thereon may be maintained by a remote grantee.

To hold original grantor conveying by Warranty Deed to his warranties and protect subsequent grantees as much as possible.

Answer 56

covenant of seisin

Question 57

Damages is capped by the amount received by the warrantor.

True or False.

Answer 57

True

Question 58

___________ is capped by the amount received by the warrantor.

Answer 58

Damages

Question 59

Damages is capped by the amount _________ by the ___________.

Answer 59

received by the warrantor

Question 60

By Warranty Deed, A to B for $20K. B to C for $15K. O, true owner, ousts C. Jurisdiction holds that present covenants are breached, if at all, when made, and the chose in action is not assigned to subsequent grantees. (Which jurisdiction is this: majority or minority rule?)

Answer 60

Based upon the statement - we are in a majority jurisdiction which means the present covenant do not run with the land here.

Question 61

By Warranty Deed, A  B for $20K. B  C for $15K. O, true owner, ousts C. Jurisdiction holds that present covenants are breached, if at all, when made, and the chose in action is not assigned to subsequent grantees. (Which jurisdiction is this: majority or minority rule?)

(a) The deed from B to C is a Quitclaim Deed. How much if anything can B recover from A?

Answer 61

Nothing because C is never going to be able to sue B under the quitclaim deed, so B is never going to try to get something from A.

Question 62

By Warranty Deed, A to B for $20K. B to C for $15K. O, true owner, ousts C. Jurisdiction holds that present covenants are breached, if at all, when made, and the chose in action is not assigned to subsequent grantees. (Which jurisdiction is this: majority or minority rule?)

(b) Deed from B to C is a Warranty Deed. C has not sued B or settled with him. How much, if anything, can B recover from A?

Answer 62

C hasn’t sued B yet so nothing again.

Question 63

By Warranty Deed, A to B for $20K. B to C for $15K. O, true owner, ousts C. Jurisdiction holds that present covenants are breached, if at all, when made, and the chose in action is not assigned to subsequent grantees. (Which jurisdiction is this: majority or minority rule?)

(c) Deed from B  C is a Warranty Deed. C sues B and recovers $15K. How much, if anything, can B recover from A?

Answer 63

B was injured 15,000 the cap on A’s damages is 20,000. B can’t sue A for 20,000 because he has only been injured 15 and he can’t get a windfall.