Transfer by Title/Deed-Recording

Question 1

Void Deeds

Answer 1

Void deeds will be set aside by the court, even if the property has passed to a bona fide purchaser.

Void deeds include:

• Forged Deed
• Deeds missing an element (name/signature of grantor, description of land)
• Undelivered Deeds
• Deeds obtained by fraud in the factum (e.i. tricking the grantor by telling him he’s signing a promissory note)

Question 2

Voidable Deeds

Answer 2

Voidable deeds will only be set aside if the property has NOT passed to a bona fide purchaser.

Voidable deeds include those:
- Executed by a minor or incapacitated person;
Or those obtained by:
- fraud in the inducement, 
- duress, 
- undue influence, 
- mistake, and 
- breach of fiduciary duty

Question 3

Uniform Fraudulent Transfer Act (UFTA)

Answer 3

UFTA allows a grantor’s creditors to set aside a deed if the deed was executed by a debtor with the intent to defraud creditors. Nearly all states have adopted.

A conveyance is fraudulent if the grantor/debtor ACTUALLY intended to hinder, delay, or defraud a creditor;

OR if the grantor

(i) did not receive a reasonably equivalent value in exchange for the transfer; and
(ii) was insolvent or was made insolvent by the transfer.

*WILL NOT be set aside against a BFP

Question 4

Subsequent Bona Fide Purchaser for Value

Answer 4

“BFP” is someone who pays valuable consideration for land and lacks notice of a prior conveyance to another person.

Question 5

Estoppel by Deed

Answer 5

If a grantor PURPORTS to convey land that he does not THEN OWN, then subsequent acquisition of title AUTOMATICALLY inures to the BENEFIT of the grantee.

Remedy: Grantee may accept title to the land or possibly sue grantor for breach of covenants for title.

• Only applies to WARRANTY deed (not quitclaim deed)
• May only be held against the original grantor, not subsequent grantees or BFPs.

Question 6

Valid Deed Requirements

Answer 6

• Name of Grantor
• Unambiguous description of land conveyed
• Signature of Grantor
• Words of grantor’s intent
• If Grantee left blank, presume to whomever received delivery

Question 7

Conveyance by inter-vivos gift

Answer 7

Donative Intent
Delivery
Acceptance

*no consideration req’d

Question 8

Race Recording Statute

Answer 8

A race statute is a recording act that alters the common law rule of “first in time, first in right” to PROTECT THE FIRST PARTY TO RECORD. Notice is IRRELEVANT.

*Later transferee who records first, even if KNEW of prior transfer, takes.

Question 9

Race-Notice Statute

Answer 9

Under a race-notice statute:
- a BFP (one who pays valuable consideration and lacks notice of the prior conveyance) prevails over a prior grantee only if she RECORDS BEFORE the prior grantee.

Question 10

Notice Statute

Answer 10

A notice statute requires ONLY that the subsequent purchaser have no actual or constructive (i.e., record or inquiry) notice at the time of the conveyance.

Under a notice statute, a subsequent BFP need not record in order to prevail over a prior grantee who failed to record.

Question 11

Effects of Proper Recording

Answer 11

Proper recording of a deed:

• Places subsequent purchasers on RECORD NOTICE
• Raises presumption that deed was VALIDLY DELIVERED
• Raises presumption that deed is VALID

Question 12

Rules of Construction: Ambiguous Deeds

Answer 12

Courts will resolve an ambiguity, absent clear intent, in the following order:

1. Natural Monuments
2. Artificial Monuments
3. Course measurements
4. Distance Measurements
5. General Descriptions- name or quantity

Question 13

Reformation of Deed

Answer 13

Reformation is an equitable action in which the court rewrites a deed to make it conform to the parties’ intention.
To reform, deed must:
- Reflect the parties’ mutual mistake;
- Contain a drafting error; or
- Reflect one party’s unilateral mistake—but only if that mistake was induced by the other party’s misrepresentation or inequitable conduct.

*NEVER reform a deed once relied upon by BFP

Question 14

General Warranty Deed

Answer 14

A deed including present and future covenants, warranting against title defects.

Question 15

Future Covenants

Answer 15

A future covenant can only be breached in the future, when some third party attempts to eject grantee and interfere with possession.

• Covenant of Warranty: the grantor agrees to defend the grantee’s title from any third party’s lawful or reasonable claims of title and to compensate the grantee for any related loss.
• Covenant of Further Assurances: grantor promises to perform whatever acts are reasonably necessary to perfect the title conveyed if it turns out to be imperfect.
• Covenant for Quite Enjoyment: the grantor warrants that the grantee will not be disturbed in his possession or enjoyment of the property by a third party’s lawful claim of title.

Future covenants run with the land.

Question 16

Present Covenants

Answer 16

• Covenant of Seisin: warrants that O has the interest or estate she purports to convey
• Right to convey: O warrants that she has power and authority to make the grant
• Covenant against encumbrances: O warrants that there are no encumbrances (e.g., easements, profits, or mortgages) against the title or interest conveyed.

Do not run with land- can only be breached at time of conveyance and do not run to grantee’s successors

Question 17

Avulsion

Answer 17

The SUDDEN, perceptible change of a watercourse serving as a boundary results in no change to the riparian landowners’ property rights.

Question 18

Accretion

Answer 18

Slow erosion of land on a bank results in the owner losing title to that area, and the slow deposit of soil belongs to the owner of the abutting land.

If builds an irregular pattern over the lands of several adjacent property owners, courts determine title to it in a “JUST AND EQUITABLE MANNER.” This means EITHER:

(i) each owner’s property line is extended out into the water, OR
(ii) the newly formed land is divided in proportion to the owners’ interests in the adjoining lands.

Question 19

Escrow

Answer 19

When a deed is given to a third party to deliver to the grantee.

Parol evidence is admissible to show conditions in this instance.

Question 20

Delivery and Acceptance

Answer 20

Req’d for transfer of title.

Delivery is presumed if:

(i) handed to the grantee, OR
(ii) acknowledged by the grantor before a notary and recorded.
- NO delivery if grantee is DEAD

Acceptance is presumed if:
Majority rule: transfer would benefit transferee (even if he doesn’t know)
Minority Rule: transferee knows, and fails to reject

Question 21

Special Warranty Deed

Answer 21

A deed in which the grantor covenants only against defects in title he HIMSELF CREATED, not those by predecessors.

*Significant Minority Rule: Use of the word “grant” in a conveyance creates by implication limited assurances against acts of the grantor but not the grantor’s predecessors.

Question 22

Quitclaim Deed

Answer 22

By quitclaim deed, the grantor releases whatever interest he has in the property, if any. Thus, a QUITCLAIM DEED CONTAINS NO COVENANTS warranting the grantor’s title.

Question 23

Equitable Mortgage

Answer 23

When a grantor coveys a deed only as a SECURITY OBLIGATION. Will be evidenced by:

(i) the grantor’s debt;
(ii) the grantee’s promise to return the land if the debt is paid;
(iii) the amount advanced to the grantor being much lower than the property value;
(iv) the degree of the grantor’s financial distress; and
(v) the parties’ prior negotiations (parol evidence)

Question 24

Constructive Notice

Answer 24

Inquiry Notice: A subsequent grantee is held to have knowledge of any facts that a REASONABLE INQUIRY WOULD HAVE REVEALED, even if he made no inquiry.

• When grantor’s deed is not recorded
• When someone else is occupying the land
• When recorded instrument refers to an unrecorded transaction

Record Notice: Record notice is notice imparted by the recordation of a deed IN THE PURCHASER’S CHAIN OF TITLE.

Question 25

Reconveyance

Answer 25

A deed is NOT reconveyed by simply returning it. The grantee must execute and delivery a NEW deed.

Question 26

Shelter Rule

Answer 26

nder the shelter rule, anyone who takes from a BFP will be treated like a BFP (i.e., will prevail against any interest her transferor would have prevailed against). Purpose: Protect the BFP by preserving his ability to convey property. It applies even when his transferee had actual knowledge of a prior unrecorded interest or did not take for substantial pecuniary value (i.e., was a donee). Non-BFP who previously had title cannot acquire BFP status by selling the land to a BFP and then repurchasing it.