Deeds

Question 1

What is the implied warranty of quality?

Answer 1

Privity of contract is not necessary for a subsequent purchaser to sue a builder or contractor under an implied warranty theory for latent defects which manifest themselves within a reasonable time after purchase and which cause economic harm

Lempke v. Dagenais: the garage contractor case

Question 2

When can suits on the warranty arise?

Answer 2

Only after the closing has taken place and the plaintiff has accepted the deed

Question 3

What are three types of deeds generally used in the US today? Briefly describe.

Answer 3

1. General warranty: industry standard; what buyer wants; 6 covenants
2. Special warranty deed: limits seller’s liability to things within the seller’s control
3. Quitclaim Deed: what seller wants; protects seller from suit by buyer; seller transfers all rights, if any, to buyer; seller does not have to prove ownership and might not own anything

Question 4

Genearlly, what do the six covenants provide?

Answer 4

The six covenants provide the theories a plaintiff can pursue in a suit on the warranty deed and are split into present covenants and future covenants.

Question 5

When are present covenants broken/able to be pursued? SOL? Ease of recovery?

Answer 5

Present covenants are broke, if ever, at the time of the conveyance (when the deed is delivered). SOL begins to run at the date of the delivery of the deed. They are easier for a plaintiff to win than future covenants.

Question 6

When can future covenants be pursued? SOL?

Answer 6

Future covenants cannot be pursued until an injury occurs. SOL begins to run at the time of the injury.

Question 7

List the three present covenants

Answer 7

1. Covenant of seisin
2. Covenant of right to convey
3. Convenant against encumbrances

Question 8

What is covenant of seisin?

Answer 8

seller promises he/she owns all of the land/property

Question 9

What is the covenant of right to convey?

Answer 9

seller promises that he/she has the rights to convey the land/property to another person

Question 10

What is the covenant against encumbrances?

Answer 10

seller promises there are no encumbrances on the property at the time the deed was delivered

Question 11

What are three examples of encumbrances? Can they be agreed to?

Answer 11

Encumbrances can be agreed to in the purchase agreement.
1. A pecuniary charge against the premises, such as mortgages, judgment liens, tax liens, or assessments
2. estates of interests in the property less than the fee, such as leases, life estates, or dower rights
3. Easements or servitudes on the land, such as right of way, restrictive covenants, and profits (people with permission to enter land and remove natural resources)

Question 12

List the three future covenants

Answer 12

1. covenant of general warranty
2. covenant of quiet enjoyment
3. Covenant of further assurances

Question 13

What is the covenant of general warranty?

Answer 13

Seller promises that nobody will have better rights than the buyer, that the seller will defendant buyer in a lawsuit, and seller will pay for damages if buyer loses.

Question 14

What is the covenant of quiet enjoyment?

Answer 14

Seller promises that nobody will disturb buyer in use and enjoyment of land, that seller will defendant buyer in a lawsuit, and that seller will pay for damages if buyer loses.

Question 15

What is the covenant of futher assurances?

Answer 15

Seller promises that if anything in the conveyance is unsigned, that seller will sign it.

Question 16

When is it nearly impossible for a plaintiff to win on future covenants?

Answer 16

If the plaintiff is not duly diligent

Question 17

What is the measure of damages for breach of covenant of seisin?

Answer 17

All or a portion of the purchase price

Example: A buys 100 acres. Title fails as to 20 of the acres. A is entitled to return of 1/5 of the purhcase price.

Question 18

What is the measure of damages for covenant against encumbrances?

Answer 18

Depends on how easily removable the encumbrance is. If it is easy to remove, the measure is cost of removal. If not easily removed, the measure is the diff in value between the land with the encumbrance and without the encumbrance.

Question 19

In all warranty covenants, what is the limit of damages?

Answer 19

The damages are limited by the amount received by the warrantor.

Question 20

What does it mean when asking if covenants run with the land?

Answer 20

If A sells to B, and B sells to C. Can C sue A?

Question 21

Do future covenants run with the land?

Answer 21

Yes

Question 22

Do present covenants run with the land?

Answer 22

In majority, no. In minority, yes. If A sells to B, and B to C, and C discovers problem, C can sue A because B gave his chose in action to C. But B cannot sue A unless C first sues B.