Ch 4: Titles

Question 1

What is the doctrine of adverse possession? (T)

Answer 1

Under the doctrine of adverse possession, ownership of real property is transferred to a person who exercises exclusive physical possession of the property for a certain amount of time.

Question 2

What are the four elements of adverse possession? (T)

Answer 2

Exclusive, Continuous, Hostile, and Open (ECHO)

Question 3

What does it mean that adverse possession must be exclusive? (T)

Answer 3

Possession cannot be shared with the true owner, but two or more or more people may become cotenants through adverse possession.

Question 4

What does it mean that adverse possession must be continuous? (T)

Answer 4

Possession must be continuous and uninterrupted for the statutory period (e.g., 10 years).

○ Seasonal or infrequent use may be sufficient if that use is consistent with the type of property.

○ An adverse possessor may tack onto the previous possessor’s time if there are in privity (i.e., transfer by nonhostile means).

○ The statutory period will not run against a true owner who has a disability (e.g., infancy, insanity,
imprisonment) at the time the adverse possession begins.

Question 5

What does it mean that adverse possession must be hostile? (T)

Answer 5

The adverse possessor must possess the land without the owner’s permission and objectively demonstrate an intent to claim the land as his own.

Question 6

What does it mean that adverse possession must be open, notorious, and actual? (T)

Answer 6

Actual possession requires physical presence by the adverse possessor. And in most jurisdictions, possession must be open and notorious such that a reasonable true owner would become aware of the claim.

Question 7

What is constructive adverse possession? (T)

Answer 7

An adverse possessor who enters under color of title from an invalid instrument and occupies part of the property described in the instrument is in actual possession of the occupied land and constructive possession of the rest of the land described in the instrument.

Question 8

For a transfer to be valid, what must the grantor do at the time of transfer of a deed and how is this shown? (T)

Answer 8

At the time of transfer, the grantor must intend to make a present transfer of a property interest to the grantee. Such intent is typically shown by delivery of the deed (i.e., the legal instrument that transfers ownership of real property) to the grantee, because this creates a presumption that the grantor intended to make a present transfer.

Question 9

What happens if the grantor keeps the deed? (T)

Answer 9

When the grantor keeps the deed, there is a presumption that the grantor did not intend to make a present transfer. But parol evidence is admissible to overcome this presumption and establish the grantor’s intent.

Question 10

What happens when the grantor transfers the deed to a third party? (T)

Answer 10

When the grantor transfers the deed to a third party, the result depends on the identity of the third party.

Question 11

What happens when the grantor transfers the deed to the grantor’s agent? (T)

Answer 11

Treated as a deed retained by the grantor.

Question 12

What happens when the grantor transfers the deed to the grantee’s agent? (T)

Answer 12

Treated as a deed delivered to the grantee.

Question 13

What happens when the grantor transfers the deed to an independent agent with a condition on delivery? (T)

Answer 13

Depends on the grantor’s language.

Question 14

What two things are required for a deed to be valid? (T)

Answer 14

For a deed to be valid, it must be delivered and accepted.

Question 15

When is a deed viewed as accepted by a grantee? (T)

Answer 15

The grantee is generally presumed to have accepted any beneficial conveyance.

Question 16

What does it mean that a valid deed must be written and signed by the grantor? (T)

Answer 16

Any written instrument signed by the grantor.

Question 17

What is considered an invalid means of signing by the grantor? (T)

Answer 17

Oral (except a permissible gift)

Signed only by the grantee

Question 18

What does it mean that a valid deed must identify the grantor and grantee (parties)? (T)

Answer 18

Separate grantor and grantee (except concurrent estates)

Parties are identifiable by name or description

Question 19

What must a deed contain to be valid? (T)

Answer 19

To be valid, a deed must be written and signed by the grantor, identify the grantor and grantee, include a description of the land, and include words of transfer.

Question 20

What does it mean that a valid deed must identify the land? (T)

Answer 20

Identifiable with reasonable certainty—e.g.:
○ Government survey
○ Metes and bounds
○ Street, lot, house number

Question 21

What does it mean that a valid deed must include words of transfer? (T)

Answer 21

Must include words such as “Convey” “Grant” “Transfer” “Sell”

Question 22

What are recording acts? (T)

Answer 22

Recording acts establish priority between conflicting claims to real property. If the recording act does not govern the transaction, then the common-law “first in time, first in right” rule establishes priority.

Question 23

What happens in a race statute? (T)

Answer 23

First to record wins, even if the subsequent purchaser had notice of a prior, unrecorded interest.

Question 24

What is the key language in a race statute? (T)

Answer 24

First recorded or first to record.

Question 25

What types of interests do recording acts cover? (T)

Answer 25

Recording acts cover deeds, mortgages, leases, options, judgments affecting title, and other instruments creating an interest in land such as easements or covenants.

Question 26

What are the kinds of notice? (T)

Answer 26

Actual, constructive, and inquiry.

Question 27

What is actual notice? (T)

Answer 27

A grantee with actual, personal knowledge of a prior conflicting interest has notice.

Question 28

What is inquiry notice? (T)

Answer 28

A grantee has notice if a reasonable investigation would have disclosed the existence of prior conflicting claims.

Question 29

What is record notice? (T)

Answer 29

A grantee has constructive notice if a prior conflicting interest is properly recorded in the grantor’s chain of title.

Question 30

What are two common situations where a subsequent grantee will be put on inquiry notice? (T)

Answer 30

1. When there is someone else living on or using the land 2. When there is another interest mentioned in the deed or some other document

Question 31

What happens in a notice statute? (T)

Answer 31

A subsequent purchaser wins if she acquires without notice of a prior, unrecorded conveyance.

Question 32

What is the key language for notice statutes? (T)

Answer 32

In good faith or without notice.

Question 33

What happens in race-notice statutes? (T)

Answer 33

A subsequent purchaser wins if they acquired the property without notice of a prior unrecorded conveyance and they record first.

Question 34

What is the key language for a race-notice statute? (T)

Answer 34

In good faith or without notice + first duly recorded or first recorded.

Question 35

What is the shelter rule? (T)

Answer 35

A person who takes from a bona fide purchaser protected by the recording act has the same rights as her grantor.

Question 36

What is estoppel by deed? (T)

Answer 36

Arises when a grantor conveys land the grantor does not own. If a grantor subsequently acquires title to the land, the grantor is estopped from trying to repossess on grounds that he didn't have title when he made the original conveyance.

Question 37

What is a general warranty deed? (T)

Answer 37

The grantor guarantees that the grantor holds all six covenants of title.

Question 38

What is a special warranty deed? (T)

Answer 38

The grantor guarantees all six covenants of title but only against defects arising during the time the grantor had title.

Question 39

What is a quitclaim deed? (T)

Answer 39

The grantor promises no covenants of title.

Question 40

What are the present covenants of title? (T)

Answer 40

Seisin, right to convey, and against encumbrances.

Question 41

What are the future covenants of title? (T)

Answer 41

Warranty, quiet enjoyment, and further assurances.

Question 42

When are present covenants breached? (T)

Answer 42

Breached at the time of conveyance. Do not run with the land.

Question 43

When are future covenants breached? (T)

Answer 43

Breached upon interference with possession. Run with the land.

Question 44

What is the covenant of Seisin? (T)

Answer 44

Grantor owns the interest being conveyed.

Question 45

What is the covenant of right to convey? (T)

Answer 45

Grantor has the legal right to convey the interest.

Question 46

What is the covenant against encumbrances? (T)

Answer 46

There are no encumbrances (e.g., easements, mortgages) against the interest conveyed.

Question 47

What is the covenant of warranty? (T)

Answer 47

Grantor will defend and compensate grantee for lawful claims made against grantee’s title.

Question 48

What is the covenant of quiet enjoyment? (T)

Answer 48

Grantee’s possession and enjoyment will not be disturbed by another’s lawful claim of title.

Question 49

What is the covenant of further assurances? (T)

Answer 49

Grantor will take any actions reasonably necessary to perfect grantee’s title.

Question 50

How can property be conveyed by a will? (T)

Answer 50

Transfer of ownership can occur at death through a will by a specific devise (e.g., “I leave my home to my daughter”) or a residuary clause (e.g., “I leave all other property to my brother”).

Question 51

How may a devise of real property fail ademption? (T)

Answer 51

A devise of real property may fail by ademption if the testator no longer owns the devised property at death because the property was previously sold, destroyed, or given away.

Question 52

How may a devise of real property fail by lapse? (T)

Answer 52

A devise of real property may fail by lapse if the intended beneficiary dies before the testator and there is no alternate beneficiary.

Question 53

What are anti-lapse statutes? (T)

Answer 53

An anti-lapse statute prevents a gift from lapsing if the gift is made to qualifying individuals specified by statute (typically immediate relatives of the testator) with issue who survive the testator.

Question 54

What is a trust? (T)

Answer 54

A trust is a fiduciary relationship created by the settlor (i.e., the one who creates the trust) in which one or more trustees (i.e., the persons who hold legal title to the property) are called upon to manage, protect, and invest certain property and any income generated therefrom for the benefit of one or more named beneficiaries (i.e., the parties who hold equitable title).

Question 55

What is an inter vivos trust? (T)

Answer 55

An inter vivos trust is created when the settlor conveys property to the trustee while the settlor is alive.

Question 56

What is a testamentary trust? (T)

Answer 56

A testamentary trust is created by the settlor via will.

Question 57

What is a pour over trust? (T)

Answer 57

A pour over trust is created by the settlor while alive but not funded until the settlor’s death by a devise in the will.

Question 58

What happens if a person dies without a valid will or without disposing all of their property? (T)

Answer 58

If a person dies without a valid will or without disposing of all property, the person’s property is distributed according to the state’s law of intestate succession. Preference is typically given to the person’s immediate family (e.g., spouse, children). But if a person dies without a will and without heirs, the person’s property goes to the state.

Question 59

What is a restraint on alienation? (T)

Answer 59

A restraint on alienation is a restriction on transferring property.

Question 60

What is disabling restraint? (T)

Answer 60

A total prohibition on the transfer of the property interest by its owner. Such restraints are always void.

Question 61

What is forfeiture restraint? (T)

Answer 61

A restraint under which property is forfeited if the interest holder attempts to transfer it. Such restraints on a future interest or a life estate may be valid.

Question 62

What is promissory restraint? (T)

Answer 62

A promise by the interest holder not to transfer the property interest. This is enforceable by an injunction or a suit seeking damages.

Question 63

What is restraint on equitable interest? (T)

Answer 63

A restriction on the transferability of an equitable property interest (e.g., a spendthrift clause). Such restraints are valid.

Question 64

What is a bona fide purchaser for value? (LII)

Answer 64

A bona fide purchaser is someone who exchanges value for property without any reason to suspect irregularities in the transaction. By definition, a bona fide purchaser cannot have actual or constructive notice as to defects in the seller’s right to transfer title to the property.