Real Property

Question 1

Deed Types (12%)

Answer 1

After closing, the land sale contract merges into the deed. Subsequently, any liability must arise out of the deed rather than the contract. There are three kinds of deeds:

 (1) General Warranty Deed. General warranty deeds provide the greatest amount of title protection. The grantor warrants title against all defects, EVEN IF the grantor did not cause the defects.
 (2) Special Warranty Deed. Special warranty deeds provide less title protection than general warranty deeds. The grantor warrants titles against defects caused by the grantor.
 (3) Quitclaim Deed. Quitclaim deeds provide the least amount of title protection. The grantor makes no warranties as to the health of the title.

Question 2

Covenant Types (12%)

Answer 2

There are six implied covenants (three present covenants + three future covenants) in general warranty and special warranty deeds.

The three present covenants are:

 (1) Covenant of Seisin. Warrants that the deed describes the land in question and that the grantor is the rightful owner.
 (2) Covenant of the Right to Convey. Warrants that the grantor has the right to convey the property.
 (3) Covenant Against Encumbrances. Warrants that there are no undisclosed encumbrances on the property that could limit its value (e.g., easements, mortgages, etc.).

The three future covenants are:
(4) Covenant of Quiet Enjoyment. Grantor promises to defend against future
challenges to the grantee’s title to the property.
(5) Covenant of Warranty. Grantor promises to defend against future developments that extend into the grantee’s property boundary.
(6) Covenant of Further Assurances. Grantor promises to do what is reasonably necessary to cure future problems with title.