Property 4—Conveyancing—Covenants for Title

Question 1

What are the different types of deeds?

Answer 1

General warranty, special warranty, and quitclaim

Property>covenants for title and estoppel by deed

Question 2

What are the main difference between the three types of deeds?

Answer 2

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

Question 3

What type of covenants are supplied by deeds?

Answer 3

Covenants for title

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Question 4

What does the grantor covenant with a general warranty deed?

Answer 4

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

Question 5

What does the grantor covenant with a specialty warranty deed?

Answer 5

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

Question 6

What are the usual covenants for title?

Answer 6

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

Question 7

What is a covenant of seisin?

Answer 7

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

Question 8

What is a covenant of right to convey?

Answer 8

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

Question 9

What is a covenant against encumbrances?

Answer 9

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

Question 10

What is a covenant for quiet enjoyment?

Answer 10

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

Question 11

What is a covenant of Warranty?

Answer 11

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

Question 12

When is the covenant against encumbrances breached?

Answer 12

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

Question 13

Even if the grantee knew of the encumbrance, is the covenant against encumbrances breached?

Answer 13

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

Question 14

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?

Answer 14

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

Question 15

Can the covenant against encumbrances be enforced by a remote grantee?

Answer 15

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

Question 16

When are the covenants for quiet enjoyment, warranty, and further assurances breached?

Answer 16

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

Question 17

How are the covenants for quiet enjoyment, warranty, and further assurances viewed?

Example?

Answer 17

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

Question 18

When is the covenantor (for her/his covenants of warranty and further assurances) liable?

Answer 18

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

Question 19

What do most courts hold on disturbances of possession?

Answer 19

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

Question 20

What is sufficient to be considered a disturbance of possession?

Answer 20

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

Question 21

What sets apart the covenants for quiet enjoyment, warranty, and further assurances from the covenants of seisin, right to convey, or against encumbrances?

Answer 21

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

Question 22

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?

Answer 22

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.)

Question 23

Statutory Special Warranty Deed

Answer 23

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.)

Question 24

Quitclaim Deeds

Answer 24

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.)

Question 25

Estoppel by Deed

Answer 25

If a grantor purports to convey an estate in property that she does not then own, her subsequent acquisition of title to the property will automatically inure to the benefit of the grantee. In other words, the grantor impliedly convenants that she will convey title immedatiely upon its acquisition.

Property>Covenants For Title and Estoppel by Deed>Estoppel by Deed (I.D.4.)

Question 26

Does Estoppel by Deed apply to warranty deeds?

Answer 26

The doctrine is most frequently applied where the conveyance is by warranty deed. Regardless of covenants for title, many courts hold that if the deed expressly purports to convey a fee simple or other particular estate, the grantee is entitled to that estate if later acquired by the grantor. In most states, however, the doctrine will not be applied when the conveyance is by a quitclaim deed.

Real Property> Conveyancing >Covenants for Title and Estoppel by Deed> Estoppel by Deed

Question 27

What are the rights of subsequent purchasers under Estoppel by Deed?

Answer 27

The majority of courts hold that title inures to the benefit of the grantee on as against the grantor (who is estopped to deny that she acquired title on behalf of the grantee). This is a personal estoppel only. Consequently, if the grantor transfers her after-acquired title to an innocent purchaser for value, the bona fide purchaser gets good title. (There is no basis for invoking an estoppel against an innocent purchaser without notice.)

Real Property> Conveyancing >Covenants for Title and Estoppel by Deed> Estoppel by Deed

Question 28

What is the effect of recordation of an estoppel by deed by an original Grantee?

Answer 28

If the original grantee records the deed she receives from the grantor, the question arises as to whether this recordation imparts sufficient notice of the grantee’s interest, so as to prevent a subsequent purchaser from being a bona fide purchaser. This depends on the subsequent grantee’s burden of searching the title.

Real Property> Conveyancing >Covenants for Title and Estoppel by Deed> Estoppel by Deed> Rights of Subsequent Purchasers

Question 29

What are the remedies of a Grantee under the estoppel rationale?

Answer 29

In jurisdictions following the estoppel rationale, the original grantee, at her election, may accept title to the land or sue for damages for breach of covenants for title. However, if an innocent purchaser of the after-acquired title is involved, the grantee has no rights against the bona fide purchaser.

Real Property> Conveyancing >Covenants for Title and Estoppel by Deed> Estoppel by Deed