Covenants of Title In Deed

Question 1

At common law, what are the 3 present covenants of title? Who can raise issues with these 3 covenants?

Answer 1

a. Present Covenants
(i) Covenants of seisen (grantor owns interest)
(ii) Covenant of right to convey (grantor has authority to convey
(iii) Covenant against encumbrances (no outstanding interests on title)
* ***THE ONLY PERSON THAT CAN RAISE ISSUES WITH THESE IS THE ORIGINAL GRANTEE

Question 2

Do present covenants of title run with the land?

Answer 2

**Do not run with the land-enforceable only by grantor’s immediate grantee→not subsequent buyers

Question 3

When are present covenant’s of title breached? When does the statute of limitations start to run? What happens if a claim is not asserted in the statutory period?

Answer 3

1. Breached if at all on day of closing
2. Stat. of Lims. Then starts to run on day of closing- Then you can only sue based on the deed
3. If claims not asserted in statutory period→only nominal damage award

Question 4

What are the 3 future covenants? Who can raise issues with these 3 covenants?

Answer 4

1. Covenant of quiet enjoyment (Warrants against eviction-real or constructive)
2. Covenant of warranty to defend (defend grantee against attack on grantee’s title)
3. The covenant of further assurances (promise to execute any documents needed to clear the grantee’s title)
4. Enforceable by everyone (immediate and remote grantees)

Question 5

When does the stat of lim start to run for future covenants of title?

Answer 5

Stat. of lim starts to run only when future covenant is later breached

Question 6

What are the grantee’s damages for breach? (2 types of breach)
What are the damages limited by?

Answer 6

Damages for breach of warranties

a. Partial Breach→proportionate reduction in FMV of purchase price received by grantor
b. Total Breach→purchase price received by grantor
* *Because of these limitations, grantee can never recover more than purchase price paid

Question 7

What is the liability on the grantor for breach of a covenant?

Answer 7

Absolute liability is imposed on a grantor for breach (it matters not that grantor’s actions did not cause the breach)

Question 8

Can a court adjudication show a breach of covenant?

Answer 8

YES. typically the court adjudication of the existence of an interest inconsistent with the covenant, including a suit against the grantor for breach