Property 4—Conveyancing—Covenants for Title Flashcards
What are the different types of deeds?
General warranty, special warranty, and quitclaim
Property>covenants for title and estoppel by deed
What are the main difference between the three types of deeds?
General warranty deed gives assurance of title through six covenants; special warranty deed gives less assurances and limited warranties; quitclaim deeds give no assurances or warranties through covenants
Property>covenants for title and estoppel by deed
What type of covenants are supplied by deeds?
Covenants for title
Property>covenants for title and estoppel by deed
What does the grantor covenant with a general warranty deed?
Assures against all title defects created by both the grantor and by all prior titleholders
Property>covenants for title and estoppel by deed>covenants for title in a general warranty deed
What does the grantor covenant with a specialty warranty deed?
Assures against all title defects created by the grantor but no one else.
Property>covenants for title and estoppel by deed>covenants for title in a general warranty deed
What are the usual covenants for title?
The covenants of title contained in a general warranty deed: Seisin, right to convey, against encumbrances, quiet enjoyment, warranty, further assurances
Property>covenants for title and estoppel by deed>covenants for title in a general warranty deed
What is a covenant of seisin?
The covenant of seisin is a covenant that the grantor has the estate or interest that she purports to convey. Both the title and possession at the time of the grant are necessary to satisfy the covenant.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Usual Covenants>Covenant of Seisin
What is a covenant of right to convey?
The covenant of the right to convey is a covenant that the grantor has the power and authroity to make the grant. Title alone will ordinarily satisfy this covenant, as will proof that the grantor was acting as the authroized agent of the titleholder.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Usual Covenants>Covenant of Right to Convey
What is a covenant against encumbrances?
The covenant against encumbrances is a covenant assuring that there are neither visible encumbrances nor invisible encumbrances against the title or interest conveyed.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Usual Covenants>Covenant Against Encumbrances
What is a covenant for quiet enjoyment?
The covenant for quiet enjoyment is a covenant that the grantee will not be disturbed in her possession or enjoyment of the proerty by a third party’s lawful claim of titile.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Usual Covenants>Covenant for Quiet Enjoyment
What is a covenant of Warranty?
The covenant of warranty is a covenant wherein the grantor agrees to defend on behalf of the grantee any lawful or reasonable claims of title by a third party, and to compensate the grantee for any loss sustained by the claim of superior title. This covenant is generally considered to be similar to the covenant for quiet enjoyment.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Usual Covenants>Covenant of Warranty
When is the covenant against encumbrances breached?
At the time of conveyance if the property is encumbered.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Breach of Covenants>Covenant Against Encumbrances
Even if the grantee knew of the encumbrance, is the covenant against encumbrances breached?
Most jurisdictions hold yes, it is still breached, whether the encumbrance is on title (e.g., a mortgage) or a physical encumbrance (e.g., an easement or servitude). Other jurisdictions hold there is no breach if the grantee knew of a physical encumbrance.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Breach of Covenants>Covenant Against Encumbrances
In jurisdictions where the grantee’s knowledge of the encumbrance is not a breach of the covenant against encumbrances, what is still held against the grantee?
Constructive notice of visible physical encumbrances (e.g., right-of-way), but several cases go so far as to hold that a covenant against encumbrances is not breached where the encumbrance (“visible” or not) is a benefit to the land involved (e.g., an easement for a sewer or for an adjacent street)
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Breach of Covenants>Covenant Against Encumbrances
Can the covenant against encumbrances be enforced by a remote grantee?
NO. Remote grantees in the majority of states cannot enforce this covenant, as is the case with the covenants of seisin and right to convey
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Breach of Covenants>Covenant Against Encumbrances
When are the covenants for quiet enjoyment, warranty, and further assurances breached?
Only until a third party interferes with possession of the grantee or her successors.
BUT NOTE: a covenant for quiet enjoyment or of warranty is not breached by the covenantor’s refusal to defend title against a wrongful claim or eviction by a third party
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Breach of Covenants>Covenants for Quiet Enjoyment, Warranty, and Further Assurances
How are the covenants for quiet enjoyment, warranty, and further assurances viewed?
Example?
As “continuous”; i.e. they can be breached a number of times. Their benefit “runs” with the grantee’s estate (unlike the present covenants discussed above).
Example: O conveys to A by a deed containing a covenant of warranty. A thereafter conveys to B and B to C, and then C is evicted by a third party with title that was paramount when O conveyed to A. C can successfully sue O.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Breach of Covenants>Covenants for Quiet Enjoyment, Warranty, and Further Assurances>Covenant Runs to Successive Grantees
When is the covenantor (for her/his covenants of warranty and further assurances) liable?
She/he is not liable unless the party seeking to hold her liable gives her notice of the claim against the title she conveyed.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Breach of Covenants>Covenants for Quiet Enjoyment, Warranty, and Further Assurances>Requirement of Notice
What do most courts hold on disturbances of possession?
Disturbances of possession are a breach.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Breach of Covenants>Covenants for Quiet Enjoyment, Warranty, and Further Assurances>Any Disturbance of Possession
What is sufficient to be considered a disturbance of possession?
If a covenantee cannot obtain complete possession or pays off an adverse, paramount claim in order to retain possession this is a sufficient disturbance of possession.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Breach of Covenants>Covenants for Quiet Enjoyment, Warranty, and Further Assurances>Any Disturbance of Possession
What sets apart the covenants for quiet enjoyment, warranty, and further assurances from the covenants of seisin, right to convey, or against encumbrances?
A disturbance of the covenantee’s possession is not required as a prerequisite to recovery for breach of covenants of seisin, right to convey, or against encumbrances.
Property>Conveyancing>Covenants for Title and Estoppel by Deed>Covenants for Title in a General Warranty Deed>Breach of Covenants>Covenants for Quiet Enjoyment, Warranty, and Further Assurances>Any Disturbance of Possession
Damages and Remote Grantees; Suppose successive conveyances from O to A to B to C, each conveyance containing full covenants. C is evicted by X, who is the true owner when O conveyed to A. C may sue O, A, or B because each gave a covenant of warranty the benefit of which “ran” with the land. What is the measure of C’s recovery? Is it the consideration teh defendant (i.e. O, A, or B) received? Is it the consideration C paid (an indemnity theory) so that if C was a donee, she gets nothing?
Many states permit C to recover to the extent of the consideration received by the defendant-covenantor (even though it exceeds the consideration paid by C). Under this view, defendant-shopping is advisable (to sue whomever received most). The defendant who is held liable then has a cause of action against any prior covenantor, unite ultimately O is held liable. In other states, C can recover only the actual consideration she paid (but not to exceed the amount received by the defendant-covenantor)
Property>Covenants For Title and Estoppel by Deed>Damages and Remote Grantees (I.D.1.c.)
Statutory Special Warranty Deed
Statutes in many states provide that (unless expressly negated) the use of the word “grant” in a conveyance creates by implication the following two limited assurances against acts of the grantor (not her predecessors): (i) that prior to the time of the execution of such conveyance, the grantor has not conveyed the same estate ot any interest therein to any person other than the grantee; and (ii) that the estate conveyed is free from encumbrances made by the grantor.
Property>Covenants For Title and Estoppel by Deed>Statutory Special Warranty Deed (I.D.2.)
Quitclaim Deeds
A quitclaim deed is basically a release of whatever interest, if any, the grantor has in the property. Hence, the use of covenants warranting the grantor’s title is basically inconsistent with this type of deed; i.e., if the deed contains warranties, it is not a quitclaim deed.
Property>Covenants For Title and Estoppel by Deed>Quitclaim Deeds (I.D.3.)
