Closing

Question 1

What is a General Warranty Deed?

Answer 1

A general warranty deed is one in which the grantor covenants against title defects created by himself and all prior title holders. It typically contains six covenants for title: three present covenants- of seisin, of right to convey, and against encumbrances; and three future covenants- for quiet enjoyment, of warranty, and for further assurances.

Question 2

Covenant Against Encumbrances

Answer 2

Note: this is a present covenant

The covenant against encumbrances assures that there are neither visible encumbrances, such as easements, nor invisible encumbrances, such as mortgages, against the title or interest conveyed.

Question 3

When does a Grantor breach a present covenant?

Answer 3

The grantor is in breach if the property is encumbered when it is conveyed, and a cause of action arises at that time.

Most jurisdictions hold that the grantor has breached this covenant even if the grantee knew of the encumbrance.

Question 4

Covenant of Warranty

Answer 4

NOTE: This is a future covenant.

Under the covenant of warranty, the grantor agrees to defend on behalf of the grantee any lawful or reasonable claims of title by a third party, and to compensate the grantee for any loss sustained by the claim of superior title.

Question 5

Covenant of Quiet Enjoyment

Answer 5

NOTE: This is a future covenant

The covenant of quiet enjoyment assures that the grantee will not be disturbed in her possession or enjoyment of the property by a third party’s lawful claim of title.

Question 6

Covenant for Further Assurances

Answer 6

NOTE: This is a future covenant

The covenant of further assurances is a promise by the grantor to perform whatever acts are reasonably necessary to perfect the title if it turns out to be imperfect.

Question 7

When is a Future Covenant Breached

Answer 7

Future covenants are not breached until a third party interferes with the possession of the grantee of her successors.

NOTE: Liability for the Covenant of Warranty and the Covenant for Further Assurances does NOT arise unless the party claiming breach gives the covenanting party notice of the claim against the title she conveyed.