Real Property _ Titles Flashcards
Deeds
What does it do?
DEEDS
- Transfers legal title on day of closing
Present Warranties (3)
DEEDS
- Warranty of Seisin: The grantor promises that they actually own the property and that no other person has a conflicting present or future possessory interest
- Right to Convey: The grantor asserts they have the legal right to convey or transfer legal title to the property.
- Covenant Against Encumbrances: The grantor warrants that there are no encumbrances (like easements, mortgages, real covenants, liens or outstanding claims) on the property
Note: If Present Warranties are breached, they are breached on the day of closing
Rules Regarding Breach of Covenant Against Encumbrances
(Majority v Minority)
DEEDS
Under the majority rule, a covenant against encumbrances is breached even if the buyer knows of an
encumbrance.
Under the minority rule, there is no breach if the seller knows of a physical encumbrance.
Future Warranties
DEEDS
- Warranty of Quiet Enjoyment: The grantee will not be disturbed by any future claims against the property.
- Warranty: The grantor promises to defend the grantee against future claims that may arise.
- Warranty of Further Assurances: The grantor agrees to do whatever is necessary to fix any defects in the title in the future.
Note: Future Warranties last forever
DEEDS
General Warranty Deed:
- Promise for all 6 warranties since property was developed/created
RULE: The grantor of a warranty deed conveys six covenants with the deed: (1) the covenant of seisin; (2) covenant of right to convey; (3) covenant against encumbrances; (4) covenant of quiet enjoyment; (5) covenant of warranty; and (6) covenant of further assurances.
DEEDS
What are the typical limitations on a grantee’s damages in case of a breach of one of the covenants of title?
When a grantor breaches one of the covenants of title, the grantee’s damages are generally limited to the purchase price received by the grantor plus incidental damages.
DEEDS
Special Warranty Deed:
- Promise for all 6 warranties since seller had title
“everything is okay while I HAD TITLE not anything previous to me”
DEEDS
Quitclaim Deed:
- No promises regarding title
quitclaim deed = no promises, no assurances. i giving you what title i have today, can’t promise it’s good title.
- can’t sue the buyer, bc you didn’t sell good title w/ promises
“it isss what it issss”
Writing
FORMALITIES OF CLOSING
- To satisfy Statute of Frauds
- the deed must be in writing, SOF part performance allowed
Delivery of Deed:
FORMALITIES OF CLOSING
- Intent of the seller to give up control
INTENT to transfer title, relinquish all control to give grantee/buyer the deed
Acceptance of Deed:
FORMALITIES OF CLOSING
Acceptance is presumed, unless grantee/buyer rejects it or gives it back to seller/grantor!
Merger
FORMALITIES OF CLOSING
- On the day of closing, the contents of the real estate contract merge into the deed.
- All terms, obligations, and conditions are then governed by the deed itself.
Description of the Property:
FORMALITIES OF CLOSING
- Must be “reasonably definitive”
- Unique, distinctive features can suffice if they clearly differentiate the property (e.g., a house with a large, unique rock or a distinctive lawn marking).
- Generic descriptions (like a white fence) are insufficient in neighborhoods where multiple properties share similar features.
- The key is whether a reasonable person can identify the property based on the description given
Conveyance of Deed by Inter Vivos Trust
TRANSFER OF PROPERTY BY WILL OR LAW
A landowner may transfer property by deed when there is (1) donative intent, (2) delivery, and (3) acceptance (which is presumed).
TRANSFER OF PROPERTY BY WILL OR LAW
Donative Intent
Conveyance of Deed by Inter Vivos Trust
Courts examine whether the grantor intended to pass title; no physical transfer of a deed is required.
Delivery
Conveyance of Deed by Inter Vivos Trust
- Recording a deed implies a presumption of delivery, even if the Grantee does not know about the deed.
- In many jurisdictions, an oral condition set by the grantor is often ignored, and delivery is considered complete.
- If the grantor dies and the deed is still with them, it is presumed there was no delivery. However, this presumption can be contested and potentially overturned by the grantee.
Transfer by Will
TRANSFER OF PROPERTY BY WILL OR LAW
- Property can be transferred through a will.
- If no will exists, property passes by intestate succession according to state laws.
Ademption
TRANSFER OF PROPERTY BY WILL OR LAW
- Occurs when property bequeathed in a will is sold by the testator before they die.
- The beneficiary loses the bequest as the specific property is no longer part of the estate.
Lapse
TRANSFER OF PROPERTY BY WILL OR LAW
- If a beneficiary predeceases the testator, the bequest lapses.
- The property then typically goes into the residuary estate.
RULE:
* Under common law, if the beneficiary died before the testator, the gift in the will lapsed and the gift was void.
* Under modern law, most states have adopted anti-lapse statutes that prevent lapse by allowing a gift to pass to certain relatives of the pre-deceasing beneficiary.
Exoneration of Liens
TRANSFER OF PROPERTY BY WILL OR LAW
- If property left in a will has liens or encumbrances, the estate usually pays these off.
- This ensures the beneficiary receives the property free of such encumbrances.
What are the ELEMENTS of ADVERSE POSSESSION (5) (list it out)
ADVERSE POSSESSION
Acquire legal title if:
1) Continuous for Statutory Period
2) Actual
3) Open and Notorious
4) Hostile
5) Exclusive
Continuous
ADVERSE POSSESSION
A person’s use is continuous when she uses the property as the property owner would
Statutory Period
ADVERSE POSSESSION
A person must be on the land for the statutory period. Under common law, the statutory period is 20 years.
Tacking
ADVERSE POSSESSION
- Intentional transfer from one person to another
- A person may tack (i.e., add) successive periods of adverse possession with another individual to meet the statutory period requirement.
- Note: Can’t tack disabilities!
Impact of Disability on Adverse Possession:
Starting Before vs. After AP Period
Disability Before AP Period Begins:
If the true property owner is under a legal disability (minor, incompetent, imprisoned) at the start of the adverse possession, the statutory period is paused or extended until the disability is removed.
Disability After AP Period Begins:
If the property owner acquires a disability after the adverse possession period has begun, it does not affect the adverse possession timeline. The statutory period continues to run regardless of the new disability.
Actual
The possessor must physically use the land
Open and Notorious
The use should be visible and obvious so a reasonable person would notice someone is using the land
Hostile
Adverse Possession
Use of the land is without the owner’s permission and in a manner that appears to claim ownership.
Exclusive
- The possessor does not share the use of the land with the owner or others
Drafting Documents:
DRAFTING & ENFORCING DOCUMENTS
- Non-attorney can draft documents
- BUT not give legal advice
Equal Dignity Rule:
- Agent may sign deed on behalf of grantor
- Need permission in writing
Exceptions – Equal Dignity Rule:
1) Officer of Corporation with authority
2) Signing agent
3) No writing – Grantor is estopped if he tried
to induce reliance
Basically - these are people whose only job it is to sign at the grantor’s request
List the Three (3) Types of Recording Acts/Statutes
RECORDING STATUTES
There are three types of recording acts/statutes: (1) notice, (2) race, and (3) race notice.
Notice Statute
Notice
A notice statute protects subsequent bona fide purchasers who take without notice of the earlier conveyance.
- Key words: “subsequent purchaser for value without notice”
- Last Bona Fide Purchaser prevails
Race Statute
Race
In a race jurisdiction, the first person to record wins. A subsequent purchaser need not be a bona fide purchaser
- First person to record prevails
- No requirement to be a BFP.
- Statutory language focuses on the act of recording.
- “no conveyance shall be good against…”
Race-Notice Statute
A race-notice statute protects all subsequent bona fide purchasers for value who take without notice and are the first to record.
- First Bona Fide Purchaser to record
- Key words: “first recorded”
Bona Fide Purchaser:
- Pay for property
- Take property without notice
A bona fide purchaser is a purchaser for value who takes without notice of a burden.
Examples:
BFP:
o Mortgagee
Not BFP:
o Creditor
o Gift
o Will
o Adverse possession
Shelter
One who takes from a BFP will prevail against anyone the transferor-BFP would have prevailed against
**Shelter Rule Hypo:
**
Scenario: O conveys property to A on Monday, but A does not record. Then, O conveys the same property to B on Wednesday, and B records. B later gives the property to C as a gift.
(1) Who wins in a notice JX
(2) Who wins in a race-notice JX
(3) Is C “sheltered?”
In a Notice or Race-Notice Jurisdiction:
B, as the subsequent bona fide purchaser who recorded, would prevail over A.
Shelter Rule Application:
Even though C, who received the property as a gift, is not a bona fide purchaser, C wins against A. This is because C is “sheltered” by B’s status. Since B would have prevailed against A, C also prevails due to being sheltered by B.
Wild Deed:
- A recorded deed outside the chain of title
(This occurs when a deed is not traceable back to the original grantor in the chain of title.)
Wild Deed Hypo
Scenario: Original Grantor (O) conveys Greenacre to A, who doesn’t record. Then A conveys to B. Meanwhile, O separately conveys Greenacre to C.
(1) Would B have notice?
(2) Who will win?
(1) B would not know of O’s transactions because the conveyance A to B is a “wild deed”. It’s outside the chain of title since B can’t trace the deed back to the original grantor (O).
(2) C, the third grantee, would win against B because B’s deed (from A) is not part of the original chain of title that starts with O. This makes the A to B deed a wild deed, untraceable to O
