Conveying Deeds Flashcards
Conveying Deeds - Gral/ purpose, how, inconsistency with land sale contract
- To transfer real property between owners:
- by closing at escrow
- Type to be specified in land sales contract
- Control if inconsistent terms with land sale contract
Conveying Deeds- SADD reqs
- SOF
- Acknowledgment = notarized
- Description of property: test of specific identity
- Delivery
Conveying Deeds- SADD - SOF
- Written -Signed by seller/grantor - Failure can be equitably cured with Part Performance Exception
Conveying Deeds- SADD - SOF - Part Performance Exception (PIP)
Gral: to invoke circumstances need to be compelling that occupants position can only be explained by existence of conveying deed. - Possession of land delivered to seller - Improvements: buyer undertake significant acts consistent w/ownership - Payment: full/substantial part of price (Some states also invoke estoppel as part of PIP: change of position on reliance)
Conveying Deeds- SADD - SOF - Revocability and Oral Rescision
- Some states allow oral revocation if deed not yet formally recorded - Rest of states: new deed required
Conveying Deeds - SADD - Delivery req
- Legal title passes with delivery of the deed
- Evidence of objective intent to transfer ownership by seller/grantor
- Presumption of delivery when deed is recorded - Oral condition on transferability usually disregard
Conveying Deeds - SADD - No delivery when (2):
1) Grantor retains deed (rebuttable presumption of lack of intention to transfer)
2) Deed delivered but grantor retains control of it
Conveying Deeds - Types (4)
1) Statutory Warranty deed
2) Quitclaim deed (ltd conveyance) (aka “Bargain sale”)
3) Limited Warranties deed
4) “Other”: i.e. new home quality, used home quality
Statutory Warranty Deed - Gral
- All seller duties on 1 title
- Protects buyer even from seller w/o knowledge of defect
- Unless otherwise agreed, seller to provide marketable title with TAFED covenants
Statutory Warranty Deed - TAFED
- Title of seisin: grantor has title/ ownership
- Authority + right to convey of grantor: and no contrary agreements with 3rd parties(options, first refusal, etc)
- Free of encumbrances - “Marketable title”
- Enjoyment Quiet: no disturbance from legal claims by 3rd parties.
- Defend Buyer - “warranty of further assurance” - defend+indemnify from 3rd party claims
Statutory Warranty Deed - TAFED - Personal warranties that don’t run with the land (2)
- Title of seisin
- Authority + right to convey
Limited Conveyance deed - gral
- Grantor not willing to give full warranties
- Depend on the jdx quitclaim deed/limited warranty as default if no express mention to statutory warranty deed in land sale contract
Quitclaim deed - gral
- aka “Bargain sale”
- Grantor only transfer rights - no protection against covenants or with implied warranties
Limited Warranty Deed - gral
- Mid point btwn st warranty deed and quitclaim
- i.e. seller warrants TAFED defects but not prior conveyances
Other possible warranties - New home quality
- Usually for commercial developers
- implied warranty of habitability for substantial latent defect - defect must be substantial
- Express contractual workmanship + mechanical warranties
Other possible warranties - Used home quality
- For dwellings and commercial properties
- No implied “buyer beware” warranty (caveat emptor).
- If contracts “as is” - buyer assumes risks of defects
- Some states require seller’s disclosure on serious/dangerous defects to which he has knowledge and that are concealed or not apparent in buyer’s reasonable inspection
Property conveyance deed - Merger Doctrine
Under common law land sale contract and conveyance deed merges - deed will control in case of inconsistency
Equitable Reformation of Deed
- Court can reform and include consistent provisions agreed by parties in land sale contract not included in final conveyance deed
- Few cases also for fraud/misrepresentation/ extreme inequitable conduct
- Rescission still available to buyer if court wont reform.
Estoppel by Deed
- Grantor convey interest not owned at time of the deed, If later acquired courts accept to pass title to grantee
- Only for 1st original buyer’s claim against seller
- Subsequent transfer by seller to BFP - takes free of encumbrances from original buyer
Risk of loss during conveyance
when unsecured loss during the process of property conveyance
Risk of loss - Equitable conversion (majority view)
- Gral rule: _Risk of buye_r: when loss btwn land sale contract execution and closing.
- Seller retains legal title until closing - but equitable title passes upon contract execution
- Exception: Seller’s risk when N or caused loss
Risk of loss - Minority view
Risk of seller until closing
Risk of loss - Impact of assurance
- Most courts will require seller to pay portion of insurance proceeds to buyer as equitable relief.
- Some states require to specific insurance coverage in land sale contract
Risk of loss - Impossibility of performance
Buyer excused if property destroyed
Closing - Gral
-Formal delivery of executed deed + payment of price
- Both parties deliver docs to closing agent as detailed in escrow instructions.
- All back taxes paid currently
- Legal title passes on closing / equitable title passes in execution of sale land contract)
Recording Statutes - Gral/ purpose, effect of record
Secure quiet enjoyment: Protects against 3rd party later acquiring superior interest from seller
- Issue: who prevails? First right or second right who records?
- Record - creates imputed constructive notice on its content to the entire world (not only parties)
- System usually not express - interpret language
- Adverse Possession/ easement by implication usually not recorded, hence not subject to these rules.
Recording Statutes - Applicable law / state law, CL
- Usually controlled by state statutes
- CL rule: “First in time first right”: when:
a) In absence of state statute
b) No party meets statutory reqs
c) Recording in wrong place and not discoverable under reasonable title research
Recording Statutes - Statutory types (3)
1) Pure Race: first to record
2) Pure Notice: priority to subsequent BFP
3) Race-Notice: both (most states)
Recording Statutes - Pure Race -Gral
- First to record has priority
- Irrelevant whether buyer is BFP or has prior notice`
Recording Statutes - Pure Notice
- Priority to last BFP
- BFP status at time of transfer of deed (not at time of filing)
- Assumes prior buyer didn’t record (bc of constructive notice)
Recording Statutes - Record Notice
- Subsequent grantee must be BFP and first to record
- Used in majority of states
Recording Statutes - BFP - FINS elements
- For value
- In good faith
- No record or inquiry notice
- Shelter Rule
Recording Statutes - BFP - FINS - For value
- not by gift/devise
- pay more than nominal value
- Unrelated debts/judgments to the property dont qualify
- Mortgage/ cancellation of debt usually ok
Recording Statutes - BFP - FINS - In good faith
- No actual knowledge of prior conveyance
- Subjective Test
Recording Statutes - BFP - FINS - No Record or inquiry notice
- Objective test at time buyer received purchase
- Burden on the holder of previous unrecorded title to prove notice of grantee -
2 methods: 1) Record Notice, 2) Inquiry Notice
BFP - FINS - No Record or inquiry notice
1) Record notice: Proper recording as constructive notice for everyone - BFP duty to search for the record in title chain
2) Inquiry Notice: Second purchaser with enough info to put reasonable person on notice upon inquiry that would lead to defects in the tile
- i.e discover someone living in the property.
- i.e. recorded instrument makes reference to unrecorded transaction.
BFP - FINS - No Record or inquiry notice - Recording error as exception to notice / (4) cases
- Usually not imputed as constructive notice to BFP when:
- wrong legal description
- goes into wrong property index
- wrong county record
- Only in grantor-grantee index or use wrong name
BFP - FINS - No Record or inquiry notice - “Collateral Document Rule”
- Grantee charged with notice of content of deeds from adjacent properties coming from common grantors
- Duty for grantee to examine all title records from date common grantor sold one of the adjacent parcels.
- some courts apply rule and impose restrictions in deed from adjacent parcels . i.e. height limitations.
BFP - FINS- “Shelter Rule”
- Non BFP takes title from BFP
- BFP with valid title, “cleanses” title
- but it doesn’t improve original’s purchaser title
Recording statutue - Title Insurance - GRAL
- Purchaser protection for unknown title defects of record on abstract of the chain of title.
- Required only when specified in land sale contract
- Doesn’t negate liability for TAFED warranties, but it provides fund to recover
- Protection Cant be transferred with property to new owner - hence not for subsequent acts
Title Insurance - Exclusions
- Defects not included in record of title abstract as of closing date
- i.e.: unrecorded deeds and mortgages, potential easements, encroachments on adjoining property, boundary disputes, setback violation, adverse possession, error in public records,
- other defects discoverable by physical inspection of property
Conveying Deeds - Implied Warranty of Marketable Title
Despite on the use of quitclaim deed and/or limited warranty deed
- Courts will usually deem the obligation of transferring MARKETABLE TITLE.
