Conveyances

Question 1

Acts of Part Performance

Answer 1

In Tx, all three requirements (possession, improvements, and payment) must be shown to exist at the same time

Question 2

Doctrine of Equitable Conversion - ROL

Answer 2

Tx had adopted the Uniform Vendor and Purchaser Act which places the ROL on the seller unless the buyer has title or possession at time of loss

Question 3

Title Acquired by AP

Answer 3

Tx courts view title acquired by AP as generally not marketable or merchantable b/c its existence cannot be determined through a title search

However, title acquired by AP may be perfected into record title either by proper releases and deeds from all adverse claimants or by a j/m quieting title in the AP from a court of competent jurisdiction

Question 4

Remedies for Breach of Sales K - Liquidated Damages

Answer 4

Remedies for Breach of Sales K - Liquidated Damages

Question 5

Seller’s Liability for Defective Property

Answer 5

A seller of a single-unit residential property must provide the purchaser w/ written notice disclosing the seller’s knowledge of the condition of the property, by no later than the effective date of K.

If the K is entered into w/o this notice, the buyer may terminate the K w/in 7 days after receiving it

This disclosure creates neither a warranty nor a substitute for the purchaser’s inspection

Notice is not required in certain transactions, such as transfers:

• pursuant to a court order or divorce decree
• b/w co-owners or immediate family
• to or from a gov’t entity
• as part of a foreclosure sale

Question 6

Real Estate Brokers

Answer 6

Under Tx’s Real Estate License Act, a broker cannot recover a real estate commission unless the promise or agreement for payment is memorialized in writing and signed by the party to be charged

Licensed real estate brokers are expected to know about RELA’s SoF, and so doctrines such as promissory estoppel and quantum meruit provide no exceptions to this requirement

Question 7

Formalities of Deeds

Answer 7

In Tx, the Statute of Conveyances also requires that a deed be in writing

A deed need not be dated, and unless it provides its own effective date, it is effective from the date of delivery

Question 8

Defective Deeds

Answer 8

In Tx, a deed obtained by fraud is voidable as b/w the parties. However, the deed is valid and represents prima facie E of title until there has been a successful suit to set it aside

Actionable fraud justifying cancellation of a deed consists of either:

(i) knowingly or recklessly made false representation of a material fact; or
(ii) a promise to perform an act in the future, if the promise is material and made w/ the present intention not to perform

A forged deed is void and passes no title, not even to a BFP

Question 9

Boundary Cases

Answer 9

Tx recognizes the CL rule that, absent an express reservation to the contrary, a conveyance of land abutting a street, public highway, or RR right of way also passes title to the center of the road or right of way if the appurtenant strip exists in fact at the time of the conveyance

This rule applies even if the description of the land in the deed or field notes terminates at the edge of the street, public highway, or RR right of way

This rule does not apply if:

(i) grantor owns land abutting both sides of the strip, or
(ii) the strip is larger and more valuable than the conveyed tract

Question 10

Transfer on Death Deed

Answer 10

An owner may use a transfer on death deed to designate a transferee to receive title to property on the owner’s death w/o the necessity of probate

Transfer on death deed does not affect the transferor owner’s rights, and the owner retains the power to transfer or encumber the property or revoke the deed

No delivery of this deed is required; however, the deed must be recorded

Question 11

Covenant for Further Assurances

Answer 11

This covenant is rarely, if ever, mentioned in Tx. It is generally viewed to have been subsumed into the covenant or warranty. The doctrine of after-acquired title serves the same purpose

Question 12

No Implied Warranties or Covenants

Answer 12

The only covenants implied by statute in Tx are the covenants of no prior conveyances and the covenant against encumbrances. These covenants are implied whenever the words “grant” or “convey” are used in any conveyance by which an estate of inheritance or fee simple is transferred

Question 13

Covenant Against Encumbrances

Answer 13

Encumbrances = taxes, assessments, and all liens on real property

Physical encumbrances have not been viewed as constituting an encumbrance unless they effect injury and damage. They are not viewed as encumbrances b/c they do not carry a pecuniary obligation on the party of the covenantee and are presumably considered by the purchaser in determining the price to be paid

Question 14

Disturbance of Possession

Answer 14

In Tx, called an eviction of the grantee

Simply means an interference w/ the grantee’s possession or enjoyment of the property. Does not necessarily mean a physical removal from the property

Question 15

Damages and Remote Grantees

Answer 15

Tx permits the recovery to the extent of the consideration received by the ∆-covenator

Question 16

Statutory Special Warranty Deed

Answer 16

In Tx, there is no such thing as a statutory special warranty deed. While there is a statutory form for special warranty deeds, it carries no particular meaning.

A special warranty deed differs from a general warranty deed only in the scope of the warranty given by the grantor. The warranty is simply limited to those claiming by, through, or under the grantor, but not otherwise.

Question 17

Quitclaim Deeds

Answer 17

Use of the term “deed” in a quitclaim deed can be misleading. A deed = a conveyance of real property, whereas a quitclaim is a transfer of whatever interest the grantor has

In Tx, unlike in a majority of states, quitclaim deeds place a grantee on inquiry notice

Question 18

Identifying Quitclaim Deeds in Tx

Answer 18

Whether an instrument is a quitclaim deed is determined by what it claims to accomplish on its face. An instrument is NOT a quitclaim deed if it purports to convey the property described, rather than merely the grantor’s rights.

Courts consider the language of the instrument as a whole

Question 19

Estoppel by Deed - Applies to Warranty Deeds

Answer 19

Also referred to in Tx as the doctrine of after-acquired title. In Tx, a covenant of warranty is not necessary to support the doctrine

Question 20

Requirements for Recordation - Grantor Must Acknowledge the Deed

Answer 20

In Tx, a deed is entitled to be recorded if acknowledged before a person authorized to take acknowledgments or oaths but also if acknowledged in the presence of two or more credible Ws

Question 21

*Where should deed be filed?

Answer 21

county clerk wherever land is located

Question 22

*Notice Statutes

Answer 22

Tx’s recording act scheme is a PURE NOTICE system

Question 23

Who is Protected by Recording Acts? J/m Creditors

Answer 23

In Tx, j/m creditors are a class of protected junior title holders only for cases falling w/in the ambit of the recording statute

J/m creditors are not considered to be innocent purchasers for value

Under the recording statute, j/m creditors take precedence over a prior unrecorded deed or deed of trust executed by the j/m debtor unless the j/m creditor has notice of the unrecorded instrument at or before the time the lien was fixed on the land

The rights of a j/m creditor are fixed at the time the abstract of j/m is recorded

Question 24

Marketable Title Acts

Answer 24

Tx has no search cut-off date

Question 25

*Inquiry Notice

Answer 25

While quitclaim deeds are valid in Tx, they put the grantee on inquiry notice of any doubts as to the grantor’s interest

Thus, the purchaser of a quitclaim deed will not qualify as a BFP under the recording act

Question 26

*Warranties in a Trustee’s Deed

Answer 26

There are no warranties in a trustee deed, unlike a general warranty deed.

Risk you have to be willing to take when buying the property.

Question 27

*What are the requirements for (a) valid and (b) recordable deed?

Answer 27

Valid: In Texas, deed must be signed by the party against whom enforcement is sought (no forgery) and also must state that price for the property and give a reasonable description of the tract to be conveyed. Must then be delivered or constructively delivered.

Recordable: In addition, the deed must either be notarized or signed by two witnesses. In order to be recordable, the deed must meet the latter requirements.