Conveyancing

Question 1

Deed

Answer 1

To properly execute deed, it must:
* be in writing and
* signed by grantor, and
* reasonably identify the parties and land (description of property that’s sufficient to identify it)

For grant to be effective, deed must be delivered and accepted
* Delivery: Requires present intent to convey deed (doesn’t require physical transfer)
* Recording deed raises presumption of delivery but isn’t necessary to pass title

Examples
* If deed is recorded and grantor dies before he can deliver deed, there’s still a presumption of delivery and the grantee is owner.
* If deed is properly executed and delivered but contains express condition that title won’t pass until grantor’s death, it creates life estate in grantor and future estate in grantee
* If deed created and delivered but grantor/grantee agree that deed will be recorded later, it does NOT affect title passing.

Question 2

Mortgage - Deed of Trust

Answer 2

Deed of Trust: security interest in real estate, used to secure loan (promissory note). Deed of trust is given to third-party trustee
* If debtor (trustor) defaults, lender (beneficiary) will tell trustee to foreclose on deed of trust by sale
* Sale can be judicial or “power of sale” (trustee conducts sale personally)
* Lender can sue for any deficiencies

Question 3

Recording Statutes

Answer 3

Pure Race Statute: First party to record wins
Notice Statute: Subsequent purchaser without notice will win over prior grantee who failed to record
Race-Notice Statute: Subsequent purchaser for value without notice will win if it records before prior grantee

Notice:
* Actual notice: what party actually knows
* Constructive/record notice: deed was properly recorded in chain of title
* Inquiry notice: reasonable inquiry/inspection of prmises would’ve revealed prior conveyance

Question 4

Covenants of Title

General Warranty Deed

Answer 4

Grantor covenants against title defects created by himself or prior title-holders

Six Covenants of Title:

Present Covenants: grantor is in breach at time of conveyance
* Of seisin:
* Of right to convey:
* Against encumbrances: no visible encumbrances (easements) or invisible encumbrances (mortgages) on title/interest

Future Covenants: breached when third party interferes with grantee’s possession
* Quiet enjoyment: guarantee that grantee won’t be disturbed in possession/enjoyment of property by third party’s lawful claim of title
* Of warranty: grantor agrees to defend against any lawful/reasonable claims of title by third party + **compensate grantee **for any resulting losses
* For further assurances: grantor will do whatever is necessary to perfect title if it’s imperfect

For covenant of warrant and for further assurances, liability arises when party claiming breach gives notice to former grantor (the “covenanting party”) notice of the third party’s claim against the title she holds

Question 5

Mortgage

Answer 5

Security interest in real estate that secures a promise to repay a loan
* If loan not paid, mortgagee can foreclose on property, sell it, and use sale proceeds to opay off debt