Titles

Question 1

Deed

Answer 1

= the document that transfers the legal title on the Closing Day from the Seller to the Buyer

Question 2

What are the categories of promises in a Deed?

Answer 2

1. Present Warranties
2. Future Warranties

Question 3

In a Deed, what are the Present Warranties? Explain each.

Answer 3

• Present Warranties: Seller promising that…
  
  1. Seisin → he actually owns the property
  2. Right to Convey → he has legal right to transfer the legal title
  3. Covenant against Encumbrance → there are no encumbrances on the property

*if Present Warranties are breached, they are breached ON Closing Day

Question 4

In a Deed, what are the Future Warranties? Explain each.

Answer 4

• Future Warranties: Seller promising that…
  
  1. Quiet Enjoyment → the grantee (Buyer) will not be bothered by any future claims
  2. covenant for Warranty → that the Seller will defend against any future VALID or REASONABLE claims that a third party brings, and to compensate the Buyer for any loss sustained by the claim of superior title
  3. Further Assurances → Seller will do do whatever it takes to fix any defects in title in the future

*Future Warranties last FOREVER

Question 5

General Warranty Deed

Answer 5

= Seller promises for ALL 6 Warranties ever since the property was first developed/created (i.e., since forever)

Question 6

Special Warranty Deed

Answer 6

= Seller promises for ALL 6 Warranties since the time that Seller obtained the title (i.e., since Seller bought the property)

Question 7

Quitclaim Deed

Answer 7

= Seller makes NO promises (NO Warranties) regarding the title

*if Buyer accepts this but later finds out there’s a problem with the title, Buyer can’t sue Seller over this

*often a real estate sale to family member b/c it’s quick – e.g., Grandma transfers title to her house to her Daughter via quitclaim deed.

Question 8

On Closing Day, what form must the Deed be in and what must it contain?

Answer 8

FORM: → in writing, to satisfy the Statute of Frauds

MUST CONTAIN:

1. identifiable grantees (clearly identify who are the Grantor and Grantee – doesn’t have to be their names, but any other identifier must be unambiguous)
2. a “reasonably definite” legal description of the property (a description that won’t be confused with other properties – it often discusses “metes and bounds” or uses street address)

Question 9

On Closing Day, what is delivery of the Deed?

Answer 9

Delivery = Seller/Grantor’s INTENT

= Seller expresses his intent to transfer control of the property to Buyer

*not necessary for Seller to physically hand Deed to Buyer on Closing Day – as long as Seller has clearly expressed intent to transfer, this = delivery

*if no intent (e.g., Seller wasn’t sure/Seller didn’t mean for Buyer to get Deed in his hands yet), then there has NOT been delivery of Deed

Question 10

On Closing Day, how is acceptance of the Deed viewed?

Answer 10

→ Buyer’s acceptance of the Deed is presumed – UNLESS the Buyer clearly expresses otherwise (e.g., Buyer throws deed in Seller’s face and says the deal’s off)

Question 11

On Closing Day, what happens with the Real Estate Contract & the Deed?

Answer 11

→ Real Estate K merges into the Deed

Question 12

If someone dies without a will, what happens to their property?

Answer 12

→ their property will pass according to their state’s laws of Intestate Succession

Question 13

Albert leaves his land to Claire in his will. While Albert’s still alive, he sells the land to Bob. What do Bob and Claire get?

Answer 13

→ Claire gets nothing – Bob keeps the land

Question 14

Allie leaves her cabin to Andrew (the beneficiary) in her will. Andrew dies. Where does the cabin go?

Answer 14

→ the cabin goes into the residuary estate

Question 15

What happens if Jenny leaves Felix a property in her will, but there’s a lien / other encumbrance on the property?

Answer 15

→ generally, Jenny’s estate will pay off the lien so Felix can receive it free & clear

Question 16

Adverse Possession

Answer 16

Rule: someone can get legal title to a piece of property if…

• 1. Continuous (throughout the statutory period of time)
     * *can “Tack” → intentionally transfer the adv. poss. time to be continued by a successor person
• 2. Actual, Open & Notorious (person’s use is obvious such that a reasonable person would know someone’s using the land)
• 3. Hostile (use it without owner’s permission & doing something to make the land look like it’s adv. possessor’s)
• 4. Exclusive (not sharing it, including not sharing w/the owner)

Question 17

Is it legal for a non-attorney to fill out a form real estate document? What about the transfer of title on Closing Day?

e.g., a real estate agent or mortgage broker

Answer 17

→ yes – BUT non-attorney can’t give legal advice

Question 18

Who can an agent sign a Deed on behalf of? What’s that called?

Answer 18

→ yes, agent can sign Deed on the Grantor (Seller)’s behalf SO LONG AS agent has Seller’s permission in writing (to satisfy the Statute of Frauds)

= “Equal Dignity Rule”

EXCEPTIONS: don’t need Seller’s permission in writing if…

1. agent is an Officer of Corporation who already has authority to sign
2. agent is a Signing Agent (this is someone who’s job is just to sign on Seller’s behalf)
3. if there’s no writing, Grantor CAN’T use that as a defense IF he did something to make you think he did have the authority to sign (i.e., Grantor is estopped from using lack of writing as a defense if Grantor tried to induce reliance)

Question 19

What are the types of Recording Statutes?

Answer 19

1. Notice Statute
2. Race Statute
3. Race Notice Statute

Question 20

Sometimes Qs provide a Recording Statute that’s irrelevant to the issue. How can you tell if the Recording Statute likely IS relevant?

Answer 20

→ if the facts are about a single Grantor** with **multiple people claiming to be the Grantee

Question 21

Notice Statute

Answer 21

= the LAST Bona Fide Purchaser prevails

Key Words → “no conveyance shall be good against subsequent purchaser for value and without notice”

*instead of “without notice”, Qs sometimes say “in good faith”

Question 22

What is a Bona Fide Purchaser? Who is / isn’t a BFP?

Answer 22

= purchaser who (1) pays value** for the property (2) **WITHOUT notice of anyone else’s prior interest in the property (e.g., no purchaser before his recorded their purchase – b/c when someone records, it serves as notice)

*mortgagees** (the lender who gives a mortgage) **ARE Bona Fide Purchasers

*EXCEPTIONS: purchasers who are NOT Bona Fide Purchasers…

1. creditor (e.g., creditor who files judgment against the property)
2. gift (i.e., someone who received title as a gift)
3. will (i.e., someone who received title via a will)
4. adverse possession (i.e., someone who received title via adv. possession)

Question 23

Race Statute

Answer 23

= first person to record prevails (it’s a race to see who can record first!)

Key Words → “no conveyance shall be good against whoever first recorded”

*does NOT have to be a Bona Fide Purchaser

Question 24

Race Notice Statute

Answer 24

= the FIRST Bona Fide Purchaser who RECORDED prevails

Key Words → “no conveyance shall be good against subsequent purchaser for value and without notice who shall first record”

*instead of “without notice”, Qs sometimes say “in good faith”

Question 25

Shelter Rule

Answer 25

= someone would not normally win under their jurisdiction’s Recording Act rules, but he is protected by his previous Grantor who won under their Recording Act (i.e., since his Grantor was prevailed under the Recording Act, this “shelters” the Grantee even though he wouldn’t prevail)

E.g., This is a Race (or Race Notice) jurisdiction. Janet sells to Craig on Monday, but Craig doesn’t record. Then, Janet sells to Paul, and Paul records. Paul then gives the property to Denise as a gift. → even though Denise isn’t a BFP b/c she received it as a gift, Denise is sheltered under Paul b/c Paul would’ve prevailed against Craig in Race (& Race Notice) jurisdiction

*for these Qs, chart out the chains of purchase

Question 26

Wild Deed

Answer 26

= a recorded deed that’s outside the chain of title (i.e., a deed that the Recording Office has on file but did not record in such a way as to give other subsequent buyers notice)

*chain of title starts with the Original Grantor

E.g., Katie sells property to Danny, but Danny does not record. Then, Danny sells property to Sid. Then, Katie sells property to Phillip. Who would prevail, Sid or Phillip? → Phillip – b/c he had no notice of the earlier conveyances to Danny or to Sid, so Danny’s sale to Sid was outside the chain of title

*chart out these Qs tracing back to the Original Grantor

Question 27

After-Acquired Title

Answer 27

= if Grantor didn’t have title on Closing Day (for whatever reason–e.g, glitch/mistake), but Grantor acquires title AFTER Closing Day, then title will pass to Grantee AUTOMATICALLY (*no time limit)