Land Transfers, Recording, Etc.

Question 1

Marketable Title

Answer 1

Covenant implied in land-sale contract (NOT deed) unless expressly disclaimed (ex. quitclaim)
Obligation to deliver at closing a marketable title reasonably free from defects (NOT perfect- minor defects OK)
Manifests at date of closing
Includes:
-Unpaid mortgage/lien
-Covenant/easement restricting use of land
-Title acquired by a. possessor w/ not-yet ripened claim (vs. once ripe–then just a. p’s land)
-Existing violation of zoning ordinance

Question 2

Covenants + Land-Sale Contracts

Answer 2

every land-sale contract, unless stated otherwise (ex. quitclaim)–has implied covenant of marketable title

At closing non collateral covenants/agreements in contract merge with deed
Now must sue on deed covenants–in contract, not in deed = can’t sue on it

Question 3

Majority rule re: delivery of marketable title

Answer 3

When no m. title at closing, can use proceeds of sale to remove cloud /make marketable retroactively

Question 4

Merger Doctrine

Answer 4

Because the covenant of marketable title is implied in the land sale contract and the contract merges with the deed, once the deed is signed the buyer cannot assert it–must sue on covenants in deed (or collateral agreements, if any)

Question 5

Effect of failure to have marketable title

Answer 5

Only promise that will deliver at closing–can fix up till that point (don’t have until day before closing, then get + deliver, still valid)
Majority rule–can also use proceeds of sale to cure cloud right after
No marketable title–reason for buyer to back out (but if sign, lose right to sue b/cause merges w/ deed)

Question 6

Quitclaim Deed

Answer 6

“As is” deed–no warranties
Transferring whatever interest have in land, but no promises what that is

Question 7

Covenants of Title in General Warranty Deed

Answer 7

1) Seisin–promise that own (“seized”) land
2) Right to Convey–promise that no restraint on alienation, have power to convey property
3) Covenant v. Encumbrances–promise that no encumbrances, visible or invisible (mortgage, easement, etc.)
4) Quiet Enjoyment–promise that will not be disturbed in future by third party w/ valid claim
5) Warranty–promise that grantor will defend grantee v. 3d party claim to land
6) Future Assurances–promise to do everything r. necessary to perfect grantee’s title

Question 8

Present Covenants

Answer 8

Does not run with land
Can sue if original buyer AND SoL not up
Can’t sue if successor in int. / SoL up
If breached, breach at time of closing

1) Cov. of Seisin– own (“seized”) land
2) Cov. of Rt to Convey–no restraint on alienation, able to convey prop.
3) Cov. v. Encumbrances–no visible/invisible encumbrances (ex. mortgage, easement, etc.)

Question 9

Future Covenants

Answer 9

Does run with land
Can sue if original buyer AND if successor in interest to orig. buyer
Breached when promise broken (ex. cov. of quiet enjoyment–at pt disturbed)

1) Cov. of Quiet Enjoyment–will not be disturbed by 3d party w/ valid claim
2) Cov. of Warranty–will defend grantee v. 3d party claim
3) Cov. of Future Assurances–will do everything r. necessary to perfect title

Question 10

SoL re: future covenants

Answer 10

Breached + SoL starts when promise broken/disturbed–ex. when disturbed, when don’t defend, etc.
Not breached when deed signed (even if don’t have good title)

Question 11

SoL re: present covenants

Answer 11

Breached and SoL starts at moment deed signed–discover after SoL expires, out of luck

Question 12

General Warranty Deed

Answer 12

Contains all six covenants of title
Warrants no defects in chain of title–“I and my predecessors had good title”
Buyer AND buyers successors can sue if breach
A has defect, gen. warr. –>unknowing B, B gen warr. –>C = C can sue B+A

Question 13

Special Warranty Deed

Answer 13

Contains some or all covenants of title AND
Warrants no defects have occurred during seller’s ownership–no promises prior to when seller held land
A has defect, gen. warr–>unknowing B, B special warr. –> C = C can sue A, but not B

Question 14

Duties re: Residential Homes

Answer 14

Duty to disclose: 1) known 2) latent 3) material 4) defects

Applies to: 1) commercial builders 2) developers of new homes; 3) sometimes all home sellers (see state)

If builder/developer–also have implied warranty of quality

Question 15

Implied Warranty of Quality

Answer 15

If commercial builder/developer selling new or remodeled residential home, have implied warranty that no significant latent defects (seems similar to warranty of habitability)
N/A if commercial building
N/A if buyer doesn’t discover w/in reasonable time