Titles Flashcards
(27 cards)
What is a deed?
A deed is a legal instrument that transfers the ownership of real property
Types of Deeds
- General Warranty Deeds
- Special Warranty Deeds
- Quitclaim Deeds
General Warranty Deeds
A general warranty deed transfers property with the promise and representation that transfer has good title, and includes six covenants (three present covenants and three future covenants)
Special Warranty Deed
Contains the same covenants of title as a general warranty deed, but only warrants against defects arising during the time the grantor had title.
Not often tested on the MBE
Quitclaim Deed
Transfers property without any promises or representations
Covenants of a General Warranty Deed
The grantor of a general warranty deed guarantees that she holds six covenants of title:
Three PRESENT Covenenants (do NOT run with the land; SOL begins to run at the time of conveyance)
1. Seisin - warrants that the grantor owns the land as it is described in the deed
2. Right to Convey - guarantees that the grantor has the right to transfer title
3. Against Encumbrances - guarantees that the deed contains no undisclosed encumbrances.
Three FUTURE Covenants (run with the land; SOL does not begin to run until the grantee’s rights are encroached
4. Quiet Enjoyment - guarantees that the grantee’s possession will not be interfered with by a thid party’s lawful claim for title.
5. General warranty - guarantees that the grantor will defend against a third party’s lawful claim for title
6. Further assurances - guarantees that the grantor will do whatever is necessary to perfect title should it turn out to be defective
Covenant of Seisin
Covenants of a General Warranty Deed
In a general warranty deed, the Covenant of Seisin is a present covenant that warrants that the grantor owns the land as it is described in the deed.
Right to Convey
Covenants of a General Warranty Deed
In a general warranty deed, the right to convey is a present covenant that guarantees that the grantor has the right to transfer title.
Covenant Against Encumbrances
Covenants of a General Warranty Deed
In a general warranty deed, the covenant against encumbrances is a present covenant that guarantees that the deed contains no undisclosed encumbrances.
Covenant of Quiet Enjoyment
Covenants of a General Warranty Deed
In a general warranty deed, the covenant of quiet enjoyment is a future covenant which guarantees that the grantee’s possession will not be interfered with by a third party’s lawful claim for title.
Covenant of General Warranty
Covenants of a General Warranty Deed
In a general warranty deed, the covenant of general warranty is a future covenant that guarantees that the grantor will defend against a third party’s lawful claim for title.
NOTE: grantor will defend against lawful claim for title, meaning the plaintiff must prevail for the covenant to kick in; if the plaintiff does not prevail, the grantor conveyed good title.
Covenant of Futher Assurances
Covenants of a General Warranty Deed
In a general warranty deed, the covenant of further assaurances is a future covenant which guarantees that the **grantor will do whatever is necessary to perfect title should it turn out to be defective. **
Requirements of Effective Transfer of Property
To transfer title from one party to another, there must be:
1. Valid deed;
2. Intent to Transfer Title (i.e. delivery); and
3. Acceptance (presumed)
Elements of a Valid Deed
A valid deed must satisfy the Statute of Frauds, meaning it must be in writing, and the writing must contain:
1. Identifiable and specific parties, such that there is not doubt as to the identities of the grantor and the grantee (NOTE: the parties must be existing and living)
2. Words of conveyance
3. A description of the property, such that there is no doubt as to the intended property; and
4. A signature from the grantor (NOTE: Any mark intended to be a signature is adequate)
Intent to Transfer Title
At the time of transfer, the grantor must intend to make a present transfer of a property interest to grantee.
This is typically manifested by delivery of the deed.
Delivery = giving up possession and control to an existing person or entity. This may be completed by physically handing or mailing the deed to the grantee or the grantee’s agent. However, physical delivery is not required – physical transfer of a deed is not conclusive evidence of the grantor’s intent.
The execution and recording of a deed creates a rebuttable presumption that the deed is to be presently operative.
Acceptance of Deed
Acceptance is required for a delivery to be complete.
Acceptance is presumed unless there are indications otherwise, so unless the grantee rejects the deed, title passes.
NOTE: If the grantee accepts the deed and then changes her mind even a moment later, her return, destruction, or cancellation of the deed is ineffective to transfer ownership of the property back to the grantor
Contracts of Sales of Real Property
Contracts to sell real property are subject to the same requirements as any other contract, starting with mutual assent and consideration.
The land sale contract must also:
1. Be in writing;
2. Be signed by the party to be charged; and
3. Contain all of the essential terms (parties, property, price, and payment)
The contract controls transactions prior to closing/transfer of property. At closing, the contract merges with the deed and terms of the deed control.
NOTE: If an MBE fact pattern is testing ownership by deed, any answer choice that says consideration is required will be incorrect.
Death Escrow
If a grantor’s intent is that a deed be effective only upon her death, the grantor may create a death escrow.
A death escrow is a method of transferring property outside probate by delivering the deed to an escrow agent to be held until the grantor’s death.
In order for a death escrow to be effective, the transfer cannot be revocable by the grantor and must comply with testamentary formalities.
Recording Statutes
Recording statutes are intended to provide a universal system of notifying subsequent bona fide purchasers for value (BFPs) of all the encumbrances affecting title to real property.
Recording gives constructive notice
Recording statutes merely establish priority among conflicting claims to real property interests, and recording is not essential to the validity of a real property transaction.
However, note that BFPs who acquire property without notice that the property is encumbered take that property free and clear of the encumbrance (in either a notice or race notice jurisdiction.
Three Types:
1. Race Statutes
2. Notice Statutes
3. Race-Notice Statutes
Race Statutes
In a race statute jurisdiction, whoever record first will prevail.
Notice is irrelevant.
Notice Statutes
In a notice statute jurisdiction, the last BFP without notice of previous conveyance prevails.
The subsequent purchaser wins under a notice statute if he has no actual, inquirty, or constructive notice of a prior claim **at the time of conveyance. **
A typical notice statute provide: A conveyance of an estate in land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.
Race-Notice Statutes
In a race-notice jurisdiction, for a subsequent purchaser to prevail, he must both be without notice and record first.
The first BFP to record without notice of a prior deed prevails.
A typical race-notice statute provides: A conveyance of an estate in land shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.
Actual Notice
A grantee possessing actual, personal knowledge of a prior interest cannot prevail under a notice or race-notice recording statute.
Inquiry Notice
If a reasonable investigation would have disclosed the existence of prior claims, then the grantee is considered to possess inquiry notice, and she cannot prevail against those prior claims (e.g., dude on the land).
