Land Conveyancing

Question 1

Two Step Process to Convey Real Estate

Answer 1

1. The Land contract, which endures until step 2. 2. The closing, where the deed becomes operative document.

Question 2

The Land Contract - Requirements

Answer 2

1. must be in writing,
2. signed by the party to be bound
3. describe property transferred
4. state some consideration

EXCEPTION to writing req. = Partial Performance by buyer - 2 of 3:

• Buyer takes possession
• Buyer pays all or part of price
• Buyer makes substantial improvements

Question 3

Risk of Loss in Land Sale K

Answer 3

Equitable conversion - treats the seller as merely holding the title in trust for the buyer until closing. (A retains right of possession until closing)

If property destroyed through NO fault of either party, B bears the risk of loss, unless the K says otherwise.

Question 4

Implied Promises in Landsale K (2)

Answer 4

1. Marketability: Seller promises to provide marketable title at the closing.
   
   • = free from reasonable doubt - free of questions that present an unreasonable risk of litigation
2. Seller promises not to make any **false statements of material fact **(lie or omission)
   
   • Disclaimer ineffective
3. NO implied warranty of fitness or habitability
   
   1. Except: implied warranty of fitness and workmanlike construction in sale of new home buy builder.

Question 5

Implied promise not to make false statement of material fact

Answer 5

• implied in land sale contract
• applies both to lies and ommissions of latent material defects.
• Disclaimer (e.g. “as is”) will NOT relieve seller of liability for fraud or failure to disclose)

Question 6

Title rendered unmarketable by:

(3 ways)

Answer 6

1. Adverse Possession - even if only PART of tutle rests on AP
2. Encumbrances - servitudes and mortgages render title unmarketable, unless buyer has waived them.
3. Zoning Violations - title is unmarketable when property currently violates an existing zoning ordinance

Question 7

Closing Requirements

Answer 7

LED

1. Lawful Execution
2. Delivery

Question 8

For “Lawful Execution” Deed must:

Answer 8

1. be in writing
2. be signed by grantor
3. need NOT recite consideration (nor must consideration pass to make deed valid - can be gratuitous)
4. Description of the land - not perfect, only requires “good lead”

Question 9

“Good Lead” meaning

Answer 9

A deed must describe land such that it provides a “good lead” meaning a buyer/court can research and know the meaning of the words used.

e.g. “O conveys all O’s land in King Co.” = good lead;

“O conveys some land in King Co.” = NOT good lead

Question 10

Delivery Requirement

Answer 10

• All that is required is PRESENT INTENT of grantor to be bound.
• satisfied when grantor physically transfers the deed to the grantee
• Permissible to use mail, an agent, or messanger
• Delivery does NOT require physical transfer of deed itself - only present intent required
• Recipient’s express rejection defeats delivery.

Question 11

Oral Conditions at Transfer or Deed

Answer 11

If deed, absolute on its face, is transferred with an oral condition, the oral condition is void. It’s not provable.

Question 12

Delivery in escrow

Answer 12

• always available
• grantor may deliver an executed deed to a 3rd party (escrow agent) with instructions that deed be transferred to grantee once conditions are met.
• Advantage: title passes from escrow agent to grantee even if grantor dies or becomes incompetent or unavailable before express conditions are met.

Question 13

Three Types of Deed

Answer 13

1. Quitclaim Deed
2. General Warranty Deed
3. Special Warranty Deed

Question 14

Quitclaim Deed

Answer 14

Carries NO covenants. Grantor isn’t even promising that he has title to convey.

BUT NOTE, even here, grantor did implicitly promise in land sale contract to provide marketable title at closing - just not liable for any problems post-closing.

Question 15

General Warranty Deed

Answer 15

Warrants against ALL defects in title, including those caused by grantor’s predecessors.

Three Present Covenants (breached, if ever, at time of delivery):

1. Covenant of Seisin
2. Covenant of Right to Convey
3. Covenant against Encumbrances

Three Future Covenants (statute of limitations begins to run on any future date when grantee’s right in possession is disturbed):

1. Covenant for Quiet Enjoyment
2. Covenant of Warranty
3. Covenant for Further Assurances

Question 17

Covenant of Seisin

Answer 17

• promise that grantor owns the estate transferred.
• present covenant that attaches to general warranty dead.

Question 18

Covenant of Right to Convey

Answer 18

• promise that grantor has the power to transfer, i.e. that there are no disabilities (capacity problems) or temporary restraints on alienation.
• present covenant that attaches to general warranty deed

Question 19

Covenant Against Encumbrances

Answer 19

• present covenant that attaches to general warranty deed
• promise that there are no servitudes or mortgages on blackacre

Question 20

Covenant for Quiet Enjoyment

Answer 20

• future covenant that attaches to general warranty deed
• promise that grantee won’t be disturbed in possession by a 3rd party’s lawful claim of title.

Question 21

Covenant of Warranty

Answer 21

• Future covenant
• promise that grantor will defend grantee against any lawful title claims asserted by 3rd parties (related to covenant for quiet enjoyment - if by some chance there IS another w/ lawful claim of title, grantor will defend against it)

Question 22

Covenant for Further Assurances

Answer 22

• Future Covenant
• promise that grantor will do whatever is needed in the future to perfect the title if it turns out to be imperfect

Question 23

Special Warranty Deed

Answer 23

• A creature of statute, available in many states
• TWO promises on grantor’s own behalf (grantor makes NO representations on behalf of predecessors in interest)
  
  • grantor promises he has not conveyed blackacre to anyone other than grantee
  • grantor promises that blackacre is free from all encumbrances made by grantor