14. Conveyancing Flashcards
What is the procedure for conveyancing?
1) Land sale contract
- Convey equitable title
2) Closing
- Convey legal title
What is required for land sale contract?
1) Writing
2) Description
3) Consideration
If only 2/3 satisfied => Equity will decree specific part performance of oral contract (e.g. take possession, substantial improvements, pay some of contract)
What is equitable conversion doctrine?
Seller has legal title + possession (until closing)
Buyer has equitable title (until closing)
- Fire/Casualty insurance proceeds => Buyer is liable for risk of loss
- Other casualties => Buyer is liable for risk of loss until closing
- Buyer is automatically required to pay contract price (specific performance)
What implied promises are there before closing?
Marketable title
- Seller must EITHER possess/deliver marketable title!!!
- NO adverse possession
- NO encumbrances (mortgage, lien, restrictive covenant, easement)
- NO zoning violations (BUT ordinances are okay)
NO false statements of material fact
- NO misrep
- NO active concealment
- NO failure to disclose
Are warranties of fitness/habitability implied in land sale contracts?
NO
UNLESS for new construction of homes - YES
What is required for lawful execution of deed?
1) In writing (Signed by Grantor)
2) Description (parties + land)
- Unambiguous (all my land, NOT some)
- Good lead to property identity (mere technicality still allowed by equity!!!)
How may deed be delivered?
To Grantee
- Physical/manual* delivery (actual NOT required)
- Notarised acknowledgment
- Recordation
What is required for delivery of deed to Grantee?
Grantor had PRESENT intention to make Grantee bound immediately
Can title be returned/cancelled after delivery?
NO
Grantee must draw up new deed + deliver
What is Grantee becomes unavailable beforehand?
Title may pass to Grantee through Escrow Agent (TP)
What is the difference between Covenants for Title and Real Covenants?
Covenants for title - Title assurance
Real covenants - NOT title assurance (written promises)
What are the types of deeds for conveyance?
General deed
Special warranty deed
Quitclaim deed
What is a General Warranty Deed?
Warrants vs defects in title
What covenants of title are in General Warranty Deed?
Present covenants
- Seisin (ownership of estate)
- Right to convey
- Against encumbrances
Future covenants
- Quiet enjoyment (Grantee NOT to be disturbed by TP)
- Warranty (Grantee to be protected by Grantor vs TP)
- Further assurances (Grantee to perfect conveyed title by reasonably necessary acts)
What is a Special Warranty Deed?
NO conveyance of estate to others
NO encumbrances
Grantor only liable for promises he made (NOT precedessors’ promises)
What is Quitclaim Deed?
Releases any interest Grantor has (even if Grantor made NO promise of good title)
NO covenants of title
What is the rule for recording conveyances?
Notice Statute
- First BFP records => First BFP wins
- First BFP fails to record => Last BFP wins (NO recording required)
Race-Notice Statute
- Whoever BFP records first => Wins
UNLESS
- Subordination agreements!!!
- Purchase money mortgages > Non-Purchase Money mortgages
=> Changes priority order!!!
What is required for BFP?
1) Pays value
2) NO notice of other conveyance (at time of conveyance)
Which parties are protected under Recording Acts?
BFP
Creditors
*TP (assignee of BFP) (NOT required to be BFP, therefore still protected even with notice)
NOT (no value)
- Donee
- Heir
- Devisee
What type of notice may discharge BFP?
AIR
Actual
Inquiry
- Examination of land
- Implied examination (if house constructed on land)
Record
- First deed recorded in chain of title before
What is wild deed?
NOT connected to chain of title => Void
Can NOT give record notice of its existence
E.g. O => A (no record) => B
A=>B is wild deed
What is estoppel by deed?
Scenario A
- Grantor has NO interest in land
- Grantor conveys land to Grantee
- Grantor acquires interest in land
- Conveyance to Grantee is valid (Grantor is estopped from denying validity)
Scenario B
- Grantor has NO interest in land
- Grantor conveys land to 1st Grantee
- Grantor acquires interest in land
- Grantor conveys land to 2nd Grantee (BFP)
- Conveyance to 2nd Grantee is valid (UNLESS 2nd Grantee is NOT valid BFP)
Scenario C
- Grantor has NO interest in land
- Grantor conveys land to 1st Grantee
- 1st Grantee builds/lives in house on land
- Grantor acquires interest in land
- Grantor conveys land to 2nd Grantee
- 2nd Grantee has ‘constructive notice’ of 1st Grantee’s conveyance (2nd Grantee can see 1st Grantee’s house)
- Conveyance to 1st Grantee is valid (NOT 2nd Grantee)
What is the rule for estoppel by deed in recording act?
Conveyance to other Grantee is valid
Conveyance to original Grantee (estoppel by deed) is NOT valid
Other Grantee’s title searcher would think Grantor would not have sold house to anyone (e.g. original Grantee) if he does NOT even own it, before he sold to other Grantee.
What are Grantee’s rights for Grantor’s breach of estoppel by deed?
Accept title
Sue for damages (breach of covenant - Ownership of land)
What must Seller do in case of unmarketable title before Closing?
Court action
- Quieten title!!!
Use Buyer’s sale proceeds
- Must be ENOUGH to clear encumbrances!!!
What are exceptions to lawful execution of deed?
VOID
- Fraud
- Forgery
- Never delivered
VOIDABLE
- Undue influence
- Duress
- Mistake
- Fiduciary breach
- Minor/Decapacitated execution
When may voidable deeds be set aside?
By Subsequent BFP!!!
