TX Land Titles 2014 Flashcards

Question

Category 2: Route Survey –

Answer 1

a.Specialized boundary survey for the purpose of est. a planned path for a linear project or right of way which follows a prescribed alignment b. Center line and specifies a width of a particular distance on either side of it i. Easements might go out on the sides of the center line c. Or traditional metes and bounds description i. Can have it is metes and bound where the center line is in the middle of the metes and bounds

Answer 2

a. Usually a supplemental survey used as an early step in the construction of improvements b. Reference stakes, markers, or monuments are set as a guide for contractors in grading the land or setting construction baselines, etc. c. Stakes with ribbons on it or a monument – pointing out where the improvements will need to be i. Can everything be there or will the architect need to make changes?

Answer 3

a. Category 4 was for mortgage loan inspection and was deleted in 1981 when Cat. 1 was divided into 1A/1B b. Follows locative survey by providing precise control on the construction of improvements as they proceed to completion c. Monitors horizontal positioning, elevation, dimensions, and configuration of the improvements d. Sometimes called an “as built” survey i. Survey representing the property after construction

Answer 4

a. Intended to determine configuration or elevations of both land and improvements located w/in a tract b. Produces a topographic map used by engineers, architects, land planners, and developers for a variety of purpose i. Drainage, where water systems are located, do you need a pump station, etc. c. Relatively expensive technique but can be very practical on projects larger than 10 acres i. Highly technical equipment (computer)

Answer 5

A master survey designed to precisely coordinate horizontal position data into a framework to which other surveys are referenced Control surveys needed for most accurate mapping ..

Answer 6

a. Also a master survey which est. particular control points of elevation measured against an imaginary level surface – usually means sea level b. Extremely precise measurements tied to national geodetic survey mom c. Nec for most route systems such as waterways, navigation easements, tunnels, and drainage systems d. Lot of times used for dams, rivers, construction of lakes

Answer 7

a Used to conduct investigations where the locations of objects, elevations, relative positioning, or other physical characteristics are critical b. Wide variety of applications i. Accident recreations, time and motion studies

Answer 8

Conditions that relate to the performance under the REK. They are created when parties to the K stipulate between each other that the K is not binding unless a certain condition occurs/is met. a. Covenant that the K will not be binding unless … b. If a condition is construed to be a CP there is no K until it occurs, however, the CP must be a true condition and not an a statement of expectations i. Example: Buyer expects to finance a property through the sale of another property • You expectations do not create a CP ii. To make it a CP: “I condition upon

Answer 9

Yes. Example: “Buyer is obligated to except any offer above $XXX” (Same goes with interest, if the interest is too high and the buyer fails to accept or the interest rate is perfect and the buyer fails to accept the loan, that poses a problem for the seller. ii. See Knox v. Townes: “Satisfactory financing” – Too broad/subjective, define to who Better: “Purchasers satisfaction must be met in order to move forward with the K,” define satisfactory, give a time limitation, or explain something reasonable i Part of issuing Ks has to do with the words you choose to use. You must understand what event has to occur in order for the condition to come into play. *The drafting of the CP must fit exactly what you are wanting to do in drafting.

Answer 10

Actively Pursue

Answer 11

The main basis of a condition precedent is that there is no K until the CP occurs There is no breach or remedy until the K occurs because there is no K until it does so In cases about CPs the question is not about a breach but whether there is a K at all --- If it is a covenant → then there would be a breach or remedy

Answer 12

YES. 99% of the time, they will need to be in writing to satisfy the SOF (don't rely on oral changes, make in writing).

Answer 13

A deposit made by the buyer w/the seller (or 3rd party, such an escrow agent) to bind the sale of the property. a. Typically, most Earnest Money Provisions state a certain sum is to be deposited to secure performance of the buyer. If buyer breaches, the seller gets to retain that money b. This is a covenant not a condition. i. Difference: If you have a condition that does not get filled there is no binding K ii. A covenant is a promise to do or not to do something. The K is still binding but a breach of the covenant is compensable in damages (i.e. the ability to retain the EM). iii. The main difference is the remedies available to each

Answer 14

Negotiations → K Signed (Earnest money paid) → Title Insurance → Survey → Inspection → MUD → Closing/Deed Delivery (Money paid in Full)

Answer 15

Buyer get equitable title when the K is signed, the seller’s title is burdened by the equitable interest of the buyer. a. There is no fee simple until closing b. Both the legal and equitable title are burdened until the deed convey the property

Answer 16

No. Only the legal title, instead it's a K to transfer the title.

Answer 17

Who bears the risk of loss while the “in between” on the timeline occurs? b. If you’re the buyer, the buyer could K to purchase then it burns down a week later before the closing, under the DEC it’s possible the buyer might be forced to pay the purchase price of that property even though it has burned down. i. Buyer gains equities at the time of the closing of the K (which more in favor of the buyer) Mitigate DEC: Courts have allowed the parties to add their own rules that address the issue of liability for loss in the interim period between signing the K and closing of the property (pre closing period) a. Prior to signing (during negotiations) something can be added to address the DEC and make the seller liable for any problems before closing b. The buyer like the seller, generally has equitable title so he has an insurable interest in the property (can get a policy to indemnify for damages/loss) i. Buyer allocates risk/loss to the insurance company

Answer 18

Legal title does not pass, it passes to the heirs/beneficiaries under the will (if there is one), so the interest Ked for will pass – the heirs have a title that is burden w/the equitable interest of the buyer. It would have to be conveyed from the buyer to create a fee simple

Answer 19

1. Any contract made in this state for the purchase and sale of real property shall be interpreted as including an agreement that the parties have the rights and duties prescribed by this section, UNLESS the contract expressly provides otherwise. a. Because of this act the statute is implied into the K. b. The legislature has taken this statue and automatically made it part of the K for the sale of RE c. Addressing EC/ET doctrine d. There is an out → Unless you opt out or address otherwise in the K 2. If, when neither the legal title nor the possession of the subject matter of the contract has been transferred, all or a material part of the property is destroyed without fault of the purchaser or is taken by eminent domain, the vendor (seller) may not enforce the contract, and the purchaser is entitled to recover any portion of the contract price paid. 3. If, when either the legal title or the possession of the subject matter of the contract has been transferred, all or any part of the property is destroyed without fault of the vendor (seller) or is taken by eminent domain, the purchaser is not relieved from the duty to pay the contract price, nor is the purchaser entitled to recover any portion of the price already paid. 4. There is a uniform act – Texas subscribes a. Texas legislature has created a gap filler, they address the rule if the parties do not address it in the K

Answer 20

As a RULE party has to perform his agreed obligation at or within the prescribed unless performance w/in that time is waived by the party to whom it benefits or if the time is extended by the parties. Modification to time, probably needs to be done in writing.

Answer 21

Term of art a. Option K: Always of the essence b. In REK, generally not when selling and purchasing real property If you do not perform, can pursue remedies a. Breach of K, SP, etc. When time is of the essence, it means that if a title commitment must be delivered on or before 30 days after the date of the K, it means 30 days after that time – period. a. Can be before that but … if it’s not done w/in that time, you’re in breach

Answer 22

If it is a fixture, it will pass with real property a. If it is questionable, address it in the K b. It is better to assume you’ll make it a fixture and send w/the property i. Texas Real Estate K (Residential) – page 1 example Item that is personal in nature but is attached/annexed to the real property that in law, it becomes a part of the real property (THINK: Commercial Law)

Answer 23

1. Has there been a real or constructive annexation/attachment 2. Is the article (the object) adaptable to the use/purpose of the real property 3. Was it the intention of the party making the annexation that the object or article become a permanent accession to the real property * Of the three above (must have all three), the most weight is given to the party’s intent NOTE: Something cannot always be a fixture (even a generator bolted to the ground)

Answer 24

Generally enforcement of arbitration/mediation clauses in Texas is subject to the specific rules of the Gen. Arbitration Act (must come w/in statutory provisions) a. Any arbitration award is binding upon the parties b. The act makes no provision for non-binding arbitration Procedures c. Enforcement of Article procedures if favored d. Requires mediation before arbitration 2. When total consideration is $50k or less, an agreement to arbitration is not valid unless all parties agree. a. In writing, signed by the parties & their attorneys 3. “Other choice” is mediation (Terrell thinks its great) a. Must be stated in the K as a remedy b. Because litigation is so expensive, mediation is a “cheaper” way to get disputes resolved

Answer 25

1. Early on in negotiations w/parties involved in REK, each of the parties needs to ascertain the identity of what party they are & what party the “other” party is. 2. What is the legal capacity of the parties a. Stickler about representative capacity & signing (title companies are as well) b. Do they have authority to deal/represent the parties in interest to the K 3. When title insurance is evolved, they must have all documents to show what capacity/authority the parties have a. Typically easy to address but, if you get too late, you have to go undo stuff b. Marital property comes into play – whose name is on the documents, who do I need to get signed? i. As a pro forma, might get the spouse to sign, just to be safe c. For individuals not as much of a problem but can be an issue re: legal age to K, sufficient legal capacity

Answer 26

How much does seller expect? What’s the motivation for the seller? i. Show capability of purchasing the property now & in the future ii. If multiple parties are interested in the property, you want enough that it’s worth putting off the other sellers iii. Generally if K is performed the EM goes toward the purchase of the property iv. Seller wants to make it hurt a little – if you don’t go through w/the K you are hurt by the loss of money a little bit v. Is 10% or 20% too high? Can be set too high How much is the buyer willing to put down? One area where negotiating a REK that is not regulated or managed

Answer 27

Art. 50 of the Texas Constitution – Laws are expansive and deeply rooted in history of Texas (all the way back to Stephen F.). These rights have enjoyed “Sacred” levels of protection. Founded on public policy of protecting citizens from destitution. Grows out of the civil war in that carpet baggers were coming in and getting mortgages on homesteads and taking them

Answer 28

Courts tend to be very favorable to the homestead owner i. Liberally construed to protect homestead owner ii. Considered “favorite” of the law (i.e. courts will bend over backwards) iii. The problem is favoring a dishonest debtor and hurting a creditor, even if it is unfair to the creditor iv. Very fact specific

Answer 29

When you are claiming a homestead, you are claiming exemption from forced sale of creditors (cannot sell homestead to pay particular debts) a. Special protection not extended to other types of real property (if it’s non-exempt real property, creditors can attach and pay debt – i.e. foreclosure)(Strong fortress) i. Creditor – Don’t screw around ii. Debtor – Best protection in TX b. Protection = Prophylactic Protection

Answer 30

One ore more contiguous lots amounting to not more than 10 acres in the city town, village and used for the purpose of a home and a place to exercise a business or calling of the claimant together w/the improvements

Answer 31

200 acres not in a city, town, or village used for the purposes of a home together w/improvements

Answer 32

One ore more contiguous lots amounting to no more than 10 acres in a city, town, or village, and used for the purposes of a home or both as an urban home and a place to exercise a business or calling for the claimant together w/improvements

Answer 33

100 acres not in a city, town, or village used for the purposes of a home together w/improvements

Answer 34

1.Can claim either rural or urban homestead but not both 2. Cannot “blend” homestead part urban and part rural - - Can be on the line, can’t blend - - Not an elastic rule – cannot be stretched 3. Characterization is critical as it determines many other issues – amt. of acreage, liens, joinder of spouse, etc. 4. Characterization is a question of fact, not choice - -While the statue and considerations are liberally construed, TX law does not presume one form of homestead over another (urban vs. rural) 4. Traditional analysis is dicey – no help from Texas Constitution - - Just says you’re entitled to a homestead, not how to distinguish rural or urban) 5. 1989: Tx Legis Adopted a “Rural Homestead” if at the time it was designated it was not served by municipal utilities, fire or police 6. 1999: Tex. Property Code 41.002 – Defining a Homestead (9/1/99)

Answer 35

A homestead is considered to be urban if: a. Located w/in the limits of a municipality or its ETJ (extra territorial jurisdiction- think waters – municipality can extend a certain distance from its actual perimeters) or a platted subdivision; and b. Served by police protection, paid or volunteer fire protection, and at least three of the following services provided by a municipality: i. Electric ii. Natural gas iii. Sewer iv. Storm Sewer; or v. Water 1. Must satisfy both (a) and (b) ((1) and (2) in the statue) to be an urban homestead 2. By negative implication, any homestead

Answer 36

Term of art under Texas Homestead Law (not necessarily, “TV family”) Comes out of cases & statutes (no guidance in constitution) Family (Cases) = A group of people having the social status of a family living subject to one domestic government, the head of the family must be legally or morally obligated to support at least one other family member and there must be a corresponding dependence by the other family member for this support. (Need all three) Family = One of status, not K (Descends upon a particular fact situation)

Answer 37

“TV family” is not required to establish a family homestead Social relationship is what is mentioned in cases, such as: husband and wife, single grandparent w/grandchild, grandparent, adult married child and minor grandchild, adult child and parent, brother and sister, divorced parent and minor child (even if that parent does not have custody of the child), widower w/no dependent children (many more from cases) Must look at the facts

Answer 38

Court determined evidence failed to show father, mother & two adult sons = single family, bc no legal or moral obligation to support two adult sons Husband and wife entered into premarital agreement stating that they had no obligation to support each other during marriage, creditors claimed this premarital agreement prevented the couple from claiming a rural family homestead – the court question but did not decide the strong public policy re: mutual support between spouses & noted that the family obligation is one of status and not of K (can K away the legal but not the moral), held that even if the agreement was effected to eliminate legal, failed to get rid of moral – husband had to support the family bc of morals

Answer 39

For a dependent minor or elderly infirmed can be either emotional or financial However, if not talking about minor or infirmed, the need for support must be financial Financial dependence need not be absolute

Answer 40

Family can only have 1 homestead – for all constituents of the family (Ex: Wife and husband have to have same, not two different homes)

Answer 41

Must be made up of the dwelling house constituting the family residence a. (i.e. not the mother in law apartment) Together w/the land on which it is situated And all property used in connection w/ the residence a. Carries w/ it the dwelling house and everything associated with it, well, etc.

Answer 42

Formerly, either a rural or an urban homestead could be made up of one or more parcels and they did not need to be contiguous a. Now, urban must be on contiguous, rural is okay non-contiguous Effective 1/2000, Constitution and Property Code have been amended to provide that an urban homestead be used for the purposes of an urban homestead or as both an urban home and a place to exercise a calling or business. This prevents a debtor from claiming a separate business homestead on property not also used as a home (could do this in the past). a. Issue: Zoning Laws (problems allowing this)

Answer 43

Generally, any present possessory estate in real property coupled w/ the required occupancy will support a homestead claim. a. Even if fee title is in the name of someone else, can claim homestead in different types of property regardless of the title i. i.e. If you have a leasehold, your protection doesn’t go beyond the leasehold b. Have to have some interest/occupancy in the property to claim as a homestead c. Recognized Ownership: - - Tenancy in common (Undivided interest in the property that will sustain the homestead claim – debtor’s is also subject to a right of partition w/the other tenant) - -Tenancy at will – Will sustain subject to the record owner terminating the tenancy at will - -A claimant who has an interest in an equitable estate can claim a homestead in that estate Example: Debtor who is getting equitable interest in a tract of land (i.e. he doesn’t have “legal title” yet) - - Life Estate - - Leasehold Interest – Debtor can claim a homestead interest in leasehold property 1. For a specific term, term of years, or at the will of the record owner 2. Extends to security deposits, or prepaid rents d. Future Interests in Property – No present possessory interest, then the track may not be claimed as a homestead KEY: Debtor must have a present possessory interest e. Partnership Property: Individual property owner in the partnership may not claim a homestead on his portion of the property

Answer 44

Husband owned property (not community), husband dies, the SS then can claim a homestead in that because they are a married couple Until the homestead is given up, that person has a right to live in that property Only exception regarding having some type of interest in the property and still being able to claim a homestead

Answer 45

Insufficient.

Answer 46

When the homestead claimant owns the surface of the land, the homestead exemption may extend to the unsevered minerals below the surface of the property Cannot claim in severed minerals – if he doesn’t own them, even if they support the claimant’s family Open Mine Doc – BC tract is producing at the time of the person coming into possession , the person then had a homestead in the open mine (i.e. the royalties coming from that)

Answer 47

Proceeds from sale of a prior homestead are exempt from seizure for a period of 6 mo. after date of sale of the homestead Allows debtor to sell a home and reinvest in another property w/o losing exempt status of the property At the moment, the debtor acquires a new homestead, exempt status of proceeds terminates a. When the title passes (i.e. close w/in the 6 month period) b. The exemption expires on the proceeds and the exceptions shifts to the new property c. Can be tolled (in certain circumstances), such as when the proceeds are in dispute and not accessible to the debtor d. Extends to any improvements that are permanently annexed i. Not attached to buildings attached to the soil

Answer 48

Liens for purchase money - - If you borrowed from the bank to purchase the homestead, you couldn’t have done so w/o borrowing from the bank - - If you don’t pay your mortgage note, because the bank has a lien on your home, they will be able to force the sale and get the proceeds regardless of whether it’s a homestead - - Owtley Liens as well – Comes into play when divorce occurs and homestead is split * The other partner gets a lien on his portion of the party Liens for improvement -- Remodel, roofing (fly by night businesses) Liens for taxes on the property (ad valorem) Home equity liens - - Using the equity to acquire a loan - - Be careful what you use this for * i.e. You could lose your home if you use this to get a car loan Reverse Mortgage -- Generally, elderly or senior citizens use the equity for a reverse mortgage Liens that pre-date the establishment of the homestead claim Conversion or Re-Finance of a lien for a mobile home attached to the homestead --- Some mobile homes are set on foundation & attached and can become part of the real estate – if it is not attached, then it is personal property

Answer 49

To establish a homestead, claimant must show a combo of both overt acts (objective acts) of usage and an intent to claim the land as a permanent residence a. This is particularl for rural property b. This is why you can only get one homestead c. Easy to say and write down but hard to apply to fact situations because a lot of times this is based on intent which must be shown by acts

Answer 50

If you reside on the land. (Actual occupancy & use alone will not satisfy the intention to establish a permanent residency). Residency combines use, occupancy, and intent. Use must be by debtor, or constituent family (use by 3rd party does NOT satisfy)

Answer 51

Reside on part of the property and --THINK: Rural: Large amount of acres Use all of he remaining property for support of family - - Must include a home - - Must be permanent – occasional use (weekend and holidays) is not enough - - There are many “tests” for sufficiency of use in the case law

Answer 52

Case law is unsettled whether business use of property is inconsistent w/its characterization as a rural homestead S. 41.002 provides that urban homestead may be used for purposes of both a home and business No corresponding provision allowing rural homestead to be used in such fashion – rural home must be used for purposes of a home Matter of Perry challenged this traditional view that operation of non-agricultural business on rural property does not necessarily result in loss of homestead character (pretty much a law) a. KEY: Do not wing it, check the statutes and the case law regarding homestead law because it is complicated

Answer 53

Homestead character can be impressed on property prior to actual occupancy when owner intends to improve and occupy the premises as homestead/in reasonable time and has made actual prep for occupancy (Example: You’re building a home) Policy behind this is to allow the debtor to buy unimproved property and protect that property as a homestead while he prepares to use this property as a homestead - - Fact oriented: What is he doing to show that he is preparing the property to be used as a homestead, demonstrating the intent that he plans to occupy the property - - Put cows, fence the property, best – obtain financing for the improvements you plan to make and then begin that *Digging a well is not the same as digging 5 post holes, nor is repairing fences on the property

Answer 54

The remedy of SP is purely equitable in nature and is governed exclusively by the maxims and principles of equity. Suit for SP is a matter of grace and not of absolute right. -- To be entitled to SP: A persons seeking SP must come to the court with: o Clean hands o Must be equitable, perfectly fair in all of its terms, and free from misrepresentation, fraud, mistake, and misapprehensions o Material terms must be determined with reasonable certainty

Answer 55

1. A decree of SP must be based on valid completed K that possesses the essentials of a binding legal obligation o It will not be granted where material terms of the K were not agreed to but left to future adjustment * The equitable principal here is that you can’t order someone to specifically perform something if the essential terms of what they’re supposed to do is not there (i.e. the court would be making a K) 2. A decree for SP is not a right but rests in sound discretion of the court – not arbitrary but judicial and exercised under settled principles of equity o Keep in mind though that the attorneys must often inform the court about what remedies are available (Think: Small town judge) The right to remedy depends on: o The K must be reasonably certain, unambiguous and based upon valuable consideration o It must be fair in all its parts, free from misrep, misapp, fraud, mistake, imposition, or surprise o The situation of the parties must be of such that SP will not be harsh or oppressive; and o The one seeking the remedy must come to court w/clean hands 4. SP will not be decreed unless the terms of the K are so expressed that the court can determine w/ reasonable certainty what is the duty of ea. party and the cond. to perf. o We are not going to make the K for you 5. A court will not order SP of a K for the sale of land w/o a legal description o Not from the tax office 6. SP will not be decreed where it appears that perf. Of the K by the D is impossible (Thus, the D does not own the land involved in the agreement he may not be compelled to perf.) o Here, the seller had already sold to a third party! 7. As a gen rule SP of a K will not be decreed unless it can be completely enforced so as to secure substantially all that the parties contemplated at the time the K was made 6. An ex K for the sale of a homestead made only by the husband will not be SP as long s the homestead exists – if it is abandoned, it can be enforced against the husband o When there is homestead you still have to have regard for this 7. Generally, no SP to a K relating to personal property Think of this rule as making a pros and cons list, one for the pros, one for the cons.

Answer 56

That he diligently and timely performed or complied with all obligations of the K. If the person requesting failed to tender proper performance (i.e. was not ready, willing, and able) he has not held up his end of the deal.

Answer 57

The other party may accept such repudiation as final and is not required to further regard the obligations. (Dunam)

Answer 58

A specific standard of title should be incorporated into the K (it is given effect by the court). If it is stated, the seller is required to deliver his or her agreement as to the stated standard. - The purchaser may refuse a title that is different then the one K for. (Purchaser Approval - If the purchaser is given the right to be satisfied in the K, they then have the right to specify the character of the title that suits them). (Freedom to K - courts don't give much leeway) - Time, lapse of time, etc. does not affect agreement to convey a certain title.

Answer 59

A purchaser of land under an EA will NOT be compelled to accept a doubtful title & pay purchase money, UNLESS he had agreed to take a title as the vendor has, or take the title at his own risk w/knowledge of the defects. *THE LAW WILL IMPLY INTO THE K THAT THE SELLER IS REQUIRED TO CONVEY GOOD/MARKETABLE TITLE KEY: The title must not be full of doubts - there will be a little doubt but the purchaser cannot be compelled to pay for a title that is full of doubts. (Unless agreed to that)

Answer 60

Free from any reasonable doubt, and that really applies to matter of law and effect. Might affect the ready ability to sell that a prudent person advised on the facts and the law of those facts would readily accept. - Does not ned to be free from every technical and possible suspicion - the cloud must be sufficient that litigation might arise = unmarketable - The mere possibility that a title might become defective is not a valid objection to whether or not it is a marketable title THINK: A title that will bring you a high price considering there is no problem. - Won't affect the value in the market

Answer 61

If it is clouded by an outstanding K, covenant, interest, lien, or mortgage sufficient to form a basis of litigation, or if it exposes its holder to a reasonable probability of litigation w/the least chance of default OR If it depends on estoppel in bias, question of presumption in fact, or extrinsic parole evidence (unless probative force and readily available)

Answer 62

a. Actually synonymous w/marketable title | b. Pass in the merchant (i.e. buyer and selling)

Answer 63

NO. Can have problems in the title and not raise up to the level that it will threaten defensibility - All refers to the character or standard of title between the parties. - Need to see what standard the K is calling for

Answer 64

a. If you leave it up to the buyer, it could be virtually perfect but one small thing the buyer doesn’t like can allow him to choose not to go through with the K. b. Parties may contract for whatever standard they choose but if it is not in the K, the court will imply that the title is marketable c. ASK: How much doubt are we as purchasers willing to take on and leave the title still marketable? i. Can have clouds ii. But clouds cannot rise to a level of probability that litigation will occur

Answer 65

Could be litigation but couldn’t win = Not enough Example: There is a COA but the SOL has run, cloud cannot be enforced Example: There is a cloud but a statute addresses it, cannot be enforced

Answer 66

a. Objections must be within the period stated in the K – time is of the essence b. Because this is a residential sales K these are all seller required disclosures c. You must disclose things that will affect the property ahead of time i. Example: Homeowner’s Association must be disclosed ii. Statutory disclosure must be in writing iii. Required notice depends on the type of property and where it is located

Answer 67

There are enough unsophisticated buyers and sellers that there are certain protections that need to be included in the contracts a. Consumer protection b. “Protecting” the freedom to K c. These protections will not be in a commercial contract

Answer 68

a. Seller must disclose condition of property to the purchaser b. Need to disclose if the owner will be part of an HOA c. Deed restrictions d. Pending lawsuits e. Lead Paint F. Notice must be completed to the best of seller’s belief and knowledge, and if the seller does not know about something that is required to be disclosed, he should indicate he has no knowledge of additional matters not disclosed

Answer 69

a. Seller has to deliver notice to purchaser on or before effective dates of sales K b. If the K is entered into w/o notice, the right arises for the buyer to terminate the K for any reason w/in 7 days of receiving notice

Answer 70

a. vSeller must disclose any pipeline that transports hazardous material b. vNotice of potential liability for additional taxes c. If property is in a certain areas created by statutory provisions (i.e. water/ag districts) then the seller has to give the purchaser notice that the property is located in that district: i. Notice depends on the type of district ii. Texas Transaction Guide is a good place to look iii. If the sale is not in compliance w/the statutory code, the purchaser can institute a suit for damages iv. Seller is not required to give notice if the district has not filed a notce form d. Must notify of possible annexation e. Might be other federal law disclosures f. Lead paint

Answer 71

a. The most well known disclosure requirement b. Requires a seller to deliver a prescribed statutory notice i. Statute has required language ii. Don’t have to use word for word but it must be very similar 1. Needs to track the language in the statute iii. Must be delivered on or before the effective date of the K for purchase 1. Looking at the K date and moving back from that iv. If there is an issue on things that you are aware of – check box “yes, no, or don’t know” 1. Not making any representations/ warranties just stating awareness c. Asks the seller to disclose any defects he knows of d. Applies to sellers of improved residential real property that contains no more than one dwelling unit i. i.e. This won’t apply to apartment complexes e. If you do not follow the statutory requirement: i. If you fail to timely deliver the notice – the buyer retains a statutory right to terminate the K for any reason. 1. Does not have to be just because notice was not provided 2. Must be within 7 days after the buyer receives notice ii. No additional remedies (other than the buyer’s ability to terminate) – No damages f. 11 Exemptions: i. Sales from a mortgager or a lendor that has foreclosed on the property (Most common) ii. Sale from the estate iii. Guardianship or conservatorships iv. Sale from government

Answer 72

a. Legislature passed in 1992 i. Most commonly used addendum ii. Texas Real Estate commissions a form on this b. Purpose is to disclose led based paint hazards i. Seller or landlord must disclose ii. Seller discloses the hazard – buyer has right o inspect c. Applies to any single family or multi family dwellings built before 1978 i. Does not apply to old people’s houses d. Actions that must be taken to comply: i. The essential elements of the disclosure rules require that before a buyer is obligated (once you sign the K) unless you come with a CP, when you sign the K, the seller or landlord must provide them with a pamphlet on the hazards of lead based paint 1. Must provide both the pamphlet and notice e. Remedies: i. Substantial penalties ii. For noncompliance 1. Up to $10k 2. Civil liability – Up to 3x the amount of damages on the person 3. Treble Damages f. 7 Exemptions: i. Foreclosure sales ii. If built after the effective period iii. Statute applies to “just lead” – not necessarily high levels

Answer 73

a. Notice states that if the current tax assessment is determined by a method at less than market value, it is possible that the buyer might not qualify for the special valuation method i. Happens often in agricultural land (it is valued lower than the market value) ii. Land owned by the seller that is probably vacant b. Specially valued property for whatever reason – if you buy and don’t qualify for it, then your taxes will go up - Needs to be in the K and in Bold face print (can be in the addendum) c. Remedies: i. Buyer is entitled to recover any amount equal to any taxes he has incurred because of buying the land d. Exemptions: Numerous and detailed

Answer 74

a. Potential annexation of property b. Created in 1999 legislative session c. Requires the seller in any interest of real estate to insert clause that reads substantially similar to the prescribed notice i. Has to do with the location of the property near a city ii. See (a) of the statute for text iii. Seller must provide before the K becomes binding (pre-execution) iv. Can be included in the K or addendum v. TX Real Estate Commission/TX Realtors has forms d. States if the property is located outside the city limits the property may now or later be located in the city’s “extraterritorial jurisdiction” (ETJ) and that it could later be annexed if it is w/in the ETC e. Advises the buyer to seek more information from the nearby city f. Remedies: i. Statutory right to terminate the K for any reason ii. W/in 7 days when buyer receives notice or date of closing iii. No other remedies g. Exemptions (10) i. Most Common: Notice doesn’t need to be provided in sales of property w/in the city’s boundary h. Safe Harbor (d) i. If seller timely provides the notice, the seller has no duty to provide additional notice re: possible annexation of property-

Answer 75

a. POA/HOA Obligations b. Requires sellers who are w/in the mandatory property owner’s association to disclose i. i.e. if you buy property here, membership is mandatory c. Notice must be substantially similar to subscribed notice i. Deed restrictions apply bc of location ii. Copy of restrictions are available from CC iii. Must pay assessments to POA iv. The amount can change (and often do) v. If you don’t pay, there are lien rights vested in the POA for collection d. Notice must be provided before K becomes binding i. In the K ii. In the addendum e. Applies – no more than one dwelling unit f. Condominiums – Not used g. TREC – Form Available h. POA/HOA (In general) i. Lien – Can foreclose if don’t pay dues

Answer 76

a. Must give written notice of a transportation pipeline (pipelines that carry NG, NG liquids, petroleum, petroleum products, or hazardous substances) i. No need to disclose water, etc. (mainly hazardous) b. Applies to sellers of unimproved property that will be used for residential homes c. (f) No need to give notice if the seller is obligated to provide a title commitment and the buyer is able to terminate by objection to title – no need to provide this d. Particularly important where you have rural property that might have had a house on it (still there) i. Not inhabitable – still not a huge issue ii. If it can be repaired and used, then the seller should give notice because it might be used as a residential property in the future e. Could be a matter of life or death f. NOTE: Never an issue of giving too much notice (more just was notice given) g. Remedies; i. Right to terminate w/in 7 days

Answer 77

a. Enacted in 1989 b. Requires seller of real property in a utility or other statutorily created district (means a taxing district) to deliver to a buyer a notice related to the tax rate, bonded indebtedness, and standby .. c. MUD Notices (Municipal Utility Districts) d. Must provide notice that are located w/in these districts & what qualifies as a utility tax district and what type is set out in the water code i. Usually drainage, flood control, etc. e. Notice set out is in the statute – generally requires that district maintain the particular form of notice i. Upon written request the dist. Must provide this notice ii. Hard to prepare yourself – dist. has updated information and they’ll have updated form on that f. Each district must follow TCBQ g. Remedies: i. Damages ii. A lot of different h. Complicated disclosures i. 4 Narrow Exemptions - Transfers of title under any type of lien foreclosure - Transfers of title by deed in cancellation of indebtedness secured by a lien upon the property conveyed - Transfers of title by reason of a will or probate proceedings or - Transfers of title to a gov. entity

Answer 78

a. Property that joins tidally influenced water of the state i. i.e. if influenced by tides (submerged at times) b. Not including minerals c. Remedy = Cancellation i. Violation of TPA in Texas Bus. Comm.

Answer 79

a. Notice of property located seaward of intercostal waterway b. Include prescribed statutory notice c. Advises the property is on the seaward side d. Also TPA – Bus. Comm. Code

Answer 80

a. 2003 Statute that adds 1958 to Occupations Code (Licenses mold mediation/assessments – cannot conduct unless licensed) i. Mold Assessment ii. Mold Remediation iii. One or either or both b. Texas Department of Health – Provides scope i. What should be done or needs to be done c. The remediatior – w/in 10 days after completing must give property owner cert. of mold remediation i. Cert. states remediation is completed by licensed inspector ii. Also states whether remediator feels like it has been remediated so it will not return d. Seller must give buyer a copy of each cert. e. Remedies: i. Committee for Public Health 1. Admin penalties for violation 2. Amount cannot exceed $5k for each violation 3. Little more teeth

Answer 81

a. Requires notice of property in specific place of service provided b. Requires seller of certificated service area to proscribe statutory notice in the K & notes that it is located in a specific area of a certain service provider (only one who can provide the service in that area) i. Might be costs before buyer can get service ii. Gen. those utility are electrical, water, or sewer c. Remedy: i. Termination of K d. Exemption e. District Maintains (like MUD)

Answer 82

a. Agricultural development districts | b. Passed in 1999 – there have been no ag districts set up in Texas – in case there are, you have to give notice

Answer 83

a. Residential construction liability act (RCLA) b. Governs actions for construction defects in new homes i. Requires builder’s Ks (the person who built the new home) that are sub. to this statute to contain this notice to buyer c. Notifies buyer of his rights under this section d. Has to be in 10 boldface print , next to signature line e. Form books/realtor has this

Answer 84

a. Condominiums i. A lot of common areas ii. When you have a condominium, generally have a whole bunch b. For building and development must claim cond. regime c. Portion of this chapter has certain protections for buyers d. Applies to most Condominiums (Statute passed in 1993 – Applies from there forward) i. Before Jan. 1, 1994 ii. Most these days = 1994 issues iii. Old may agree to be governed by he new e. When you sell, must get resale cert. i. 82.152- Developer must prepare a condition information statement before any units be offered for sale 1. Describes condo, the rights, associations bylaws, general explanation 2. Contains all the notices required ii. Info statement must be delivered before entering K f. If contains conversion buildings – requires more i. Converted from one use to another’s g. Remedies: i. Gen. cancellation w/in certain amount of time ii. One section prohibits buyer from closing until he gets information iii. Very narrow exemptions

Answer 85

1. Financing Vehicles a. Considered a mortgage substitute b. Used when people cannot get/qualify for a home loan (generally unsophisticated buyers/sellers) 2. The title never passes until all payments are made a. Title stays with the seller so you see that you’re financing b. THINK: 30 + years, the time of the loan 3. Contains notices 4. They are legal in Texas 5. Terrell will not prepare because they are so sticky!! a. Strict compliance from seller b. Failure to give notices under this statute are fines up to $200 per day 6. Advise against using these!!!!

Answer 86

a. 5.008: Disclosure of Property Condition: (c) – No duty to disclose deaths that occur on the property, that are caused by suicide, natural, or unrelated to the condition of the property i. Statute does not address: Deaths related to the property, murders (nothing mentioned of these but nothing mentioned re: a duty) – Absent a statutory authority, b. Also provides that a seller has no duty to disclose whether a previous occupant had/may have/currently has … HIV/AIDS c. Group Homes: Residential homes that meet the requirements under the definitions – (Under Human Resources Code) – Zoning and restrictive covenants in that area cannot be construed to restrict these homes. i. Permitted residential use in the FHA ii. Basically a protected class d. Code of Criminal Procedure 62.045(e): Provides a seller, a LL, a builder, or broker of a single family property does not have to disclose re: persons who are registered sex offenders NOTE: Not all seller disclosure laws – the ones discussed should bring up that you need to be aware of these disclosures (consumer protection)

Answer 87

7. Seller must disclose all known defects. a. He cannot disclose what he does not know 8. The “as is” clause is unenforceable if the purchaser of the property is induced to enter into the contract because of fraudulent misrepresentation or non-disclosure/concealment 9. Seller cannot obstruct the buyers ability to inspect the property 10. The “as is” clause in a REK must be “an important basis of the bargain” a. Has to be bargained for – Some type of consideration b. Cannot be boiler plate (must be conspicuous and follow bold face requirements) 11. Must be negotiated for (even if it is in the K, needs to be something that was put in place because of negotiation) 12. Buyer and seller must have equal bargaining powers

Answer 88

1. 3 specific Categories: (1) Entire Agreement Clause (2) The “As is” Clause (3) Combo

Answer 89

i. Buyer acknowledges he’s inspected the property & no inducements have been made, and that the K = the entire agreement between the parties ii. These provisions were fairly commonly used – but don’t necessarily provide to the seller the needed protection of insuring the disclaimer was agreed to by both the buyer and the seller iii. Obviously not “in fact”/Conspicuous or specific (Not brought to people’s attention) iv. “Buyer hereby acknowledges that he has inspected the property, that no representation or inducements have been made other than those expressed between the parties.” 1. Very broad 2. What’s in here is in here 3. Leaves a lot to be desired

Answer 90

i. Grew more close to what court in Prudential set forth | ii. Initially a 3 or 4 line disclaimer which has grown over time to satisfy the requirements of Prudential

Answer 91

express disclaimer of warranties, and reliance by purchaser on its own inspections and due diligence ii. In line w/what Prudential requires iii. More adequately protects sellers who desire to rely upon the validity of the provisions iv. Relying more on the investigations hat the purchaser did on the property vs. the language of the K.

Answer 92

Courts made clear that in virtually every case, the courts seek to interpret or distinguish based on extremely detailed and fact intensive analysis. a. The facts must be looked at in order to apply the rules set forth in Prudential b. THINK: Not only the facts and circumstances surrounding the ability to inspect the property but also ask if there were issues of fraudulent inducement and/or misrepresentation i. “We think Goldings agreement o buy the agreement “as is” precludes him from proving that Prudential caused him any harm” ii. If it’s in the K and it meets the other tests = Enforce “As Is” iii. Sole cause of the type of injury in these circumstances – the cause of this is the buyer (i.e. the cause of his own injury)

Answer 93

i. Material facts known by the seller, which would not have been discoverable by ordinary care/diligence, or by reasonably inquiry by the buyer 1. IMPORTANT: A seller has NO DUTY to disclose facts about the property that the seller does not know!!!!! 2. They could exist but if he doesn’t know, no duty ii. Disclose what he “should” know? 1. Under DTPA: The Seller did not have a duty to know what he actually did not know 2. In Prudential – Distinction between obligation: a. Between what the seller might suspect b. As opposed to something he actually knows i. Goes beyond disclosure but actually educate the property (P had no duty to educate/disclose any general concerns – if buyer had educated himself, he would have had as much info as the seller) c. No obligation if no specific knowledge 3. This brings up the ““even playing field” /bargaining power

Answer 94

i. Court in Prudential concluded no impairment (said Goldman could do whatever) ii. Whatever information w/held would not have been material iii. Only way to make determination – was to inspect (which he had the right to do & did) iv. Whatever scope of the property was made by the purchaser 1. How far or how little they wanted to inspect

Answer 95

i. The court analyzed the effect of any of seller’s agent (“best property in Austin”) 1. – Puffing (opinion), not misrepresentation of material facts ii. Purchaser didn’t attach much to the statements iii. Was not material inducement to acquire the building iv. “No reason to suspect that the seller’s statements were false or were made recklessly w/o material truth” Look at the conditions surrounding the “as is” between the S/P – underneath the “as is”

Answer 96

a. Causation for K and tort recovery negated because i. K recitation of non-reliance on statements ii. Buyer is reliant on his own obligation iii. If you didn’t rely on the statement – you are relying on your own free reign to inspect the property (which negates causation because you’ve negated reliance) iv. Reliance comes down to the buyers own examination on the property b “As is” clauses negate the causation element – reliance on whether there is injury or not is based upon the buyer’s own examination of the property. (That’s why you cannot complain about causation)

Answer 97

1. Provisions should be: a. In bold print (Often also in all caps) – Conspicuous for the buyer to read b. Conspicuously placed in the K (towards the top) c. Specific reference to negotiation by parties to evidence mutual agreement i. Need to specifically state this – it was the basis of negotiation ii. Good evidence of mutual agreement containing the “as is” clause d. Mention as a factor in purchase price consideration i. The lack of warranties provided because of the “as is” should be “worth something” e. Explicit and detailed as possible i. Should be no question about what the agreement between the parties is and why they’ve made that f. Be a combination of express disclaimer of warranties and acknowledgement of reliance by the buyer of its own inspections and reviews i. This puts a bit of responsibility on the seller to provide things like building plans, information about material used, etc. 2. Prudent to include “as is” provisions in the actual conveying documents (Sub (b) P (10) of K) a. The items in the K need to merge with the deed – Terrel = It is required, needs to be restated (practically the same wording) in the K to the Deed/Conveying document 3. Make materials or files of seller available to buyer (with appropriate written disclaimers) a. This is not making representations but simply demonstrating that it is the buyers responsibility to inspect – the seller has shared all he knows b. Helps w/reliance 4. In commercial transactions in Texas, buyers and sellers are able to freely allocate business risks by negotiating Ks to provide for enforceable “as is” provisions i. In commercial transactions – You guys are big boys, you know what to do, look at the facts but really, will be enforced. 5. In residential transactions, Texas courts apply a somewhat different analysis and focus w/more attention to sophistication and disparate bargaining position a. But will generally enforce “as is” provisions based on individual facts of the cases

Answer 98

Bonnie Blue v. Rikenstien : Court considered whether a valid “as is” could bar liability in SWDA – Certain sense of comfort suing “as is” until Bonnie Blue CERCLA: Can carve out some indemnity issues - Raises question re: State and Federal connection w/purchase and sale of real property & “as is” Despite the fact that” as is” cannot bar recovery under CERCLA, the court in BB, in dicta said that the parties can contract the risk for environmental issues * Assume Texas will allow some indemnification like in federal courts – and allow some indemnification, even though we’re not exactly sure to what extent - Federal goes more toward monetary issues than liability

Answer 99

Surveys (For good legal description) Title Examination (Getting Ins) - Title company is examining to benefit themselves and deciding what risk to take (Only insures indefeasible) - Affects the buyer and closing re: what standard of title you want conveyed Financing - CP Feasibility Studies/Inspections - Asbestos - Environmental issues - K will be the guid on this - If residential, statutory seller disclosures *** SHOULD ALL BE IN THE K

Answer 100

Title company will keep up with this, big penalties if rules are not followed.

Answer 101

a. Conveyance Takes place - Closing K into the Deed b. Loan gets closed c. Closing all that’s coming before and getting ready to go forward d. After the closing there is no K

Answer 102

An estate in land that is conveyed is fee simple, unless the instrument using to convey limits the estate for less than that

Answer 103

Form of conveyancing document (actual form to use, if you don't use, use something similar) - Conveys fee simple, unless you say otherwise - Contains a covenant of general warranty (don't have to have)

Answer 104

Must be in writing, signed by the grantor/agent, delivered but he conveyor or convey's agent .. Mini SOF

Answer 105

INTENT TO CONVEY | - No need to use formal words, but parities look to intent and grasp words that = a conveyance

Answer 106

Grant or Convey = Implied warrant

Answer 107

Evidence of an agreement - Complies w/SOF & Mini SOF - Evidence of owner's intent to convey real property (all or part of to another person) - Different from a will because a deed transfers PRESENT intent to convey and a will gives at death (although, the use and enjoyment of the property can occur later) - Conveyance & a K - Can be done through a land certificate

Answer 108

i. If you have a vested legal title once they’ve been vested, they cannot be divested by abandonment. (Just because you moved away, you still have title to the property) ii. You can be divested if you haven’t been paying ad valeorm taxes on the property but … It requires some type of notice re: the involuntary divestment before that occurs

Answer 109

i. At CL, the courts were very strict about the words used now the court goes by a standard about the parties’ intent vs. what the words actually are ii. Although, words like “Are to have and hereby granted” the interest named therein have demonstrated an intent to presently convey and completely alienate the seller’s interest in the property to someone else 1. The court is always looking for a K. Meaning they are always looking for intent to K. If the intent is truly the important factor, it doesn’t matter what words are used. c. If the intent is discoverable – it will be conveyed and we’ll construe the instrument and words to convey the intent. The use of any words that come up to or amount to enough that present a K of bargain and sale are sufficient. i. Agreement & intent to follow through w/ the transfer

Answer 110

Must be in writing, signed by the grantor (SOF/Mini SOF) and acknowledged by the grantor (Required by the statute of conveyances), if it is going to be recoded it must be acknowledged under oath (usually in front of witnesses/notary) i. “Acknowledge to me that they agree and no one tricked them or forced them to sign” ii. Ceremony and certificate of acknowledgement (Certifies that the acknowledgement ceremony happened) Placed on record in the county where the land is situated Passes an estate in land – unless limited by express words in the instrument i. If language is doubtful, it will be construed to convey the grantee the largest estate under the instrument (i..e favorably to the grantee)

Answer 111

The instrument as a whole. Is there a grantor/grantee? Are there operative words of grant that show an intention by the grantor to convey title which is sufficiently described tot he grantee and is signed and acknowledged by the grantor? *IF operative words of grant appear anywhere on the deed, that is sufficent

Answer 112

a. Premises: Part of an old CL deed that contained everything that precedes the addendum i. Contains name of properties, recitals, date, acknowledgement that property as received from grantor, and a full description including anything not included ii. “Premises herein considered” (Still used) b. Habendum: Stated what was being granted, sometimes included n premise c. Tadendum: Used to express that tenure (feudal times), when abolished and all transfers were freehold, then it was converted to sotage (money), now joined in habendum under the formula “to have and to hold” d. Redendum: The part of the deed that the grantor reserves something to himself out of the estate being granted (Ex: Reserve rents out of the deed then yielding and paying out of CL)

Answer 113

If no debts due (other than on real estate), there doesn’t need to be any admin just admit to probate o If property is named in the will and a beneficiary is named, it will convey that property w/o admin (way to avoid probate)

Answer 114

1. Common phrase used 2. Under TX Law = Oxy Moron, a deed is actually a conveyance of real property 3. A release of any right, interest or title (not a conveyance), therefore, the concept is a misnomer a. Either it’s a conveyance or an assignment b. You are Quitting the claim 4. Quit Claim – In and of itself doesn’t establish any title in the grantee a. Or to any parties holding under 5. ASK: Is it a Deed or is it a Quit Claim? a. The character is determined whether it assumes to convey the property described and in fact does it have that effect? b. Intention of the parties will determine c. The words “Quit Claim” are not an exclusive test of the parties i. Doesn’t mean it’s not a deed ii. Doesn’t mean it’s not more than a QC (could still have the effect of conveying) 6. To prove title, the grantee has to prove that the grantor held title to the property a. Grantor actually had to have title b. If you have title – you are conveying what you are purporting to own!!!!!

Answer 115

The grantor - Contains no warranties of good an unencumbered title - Does not establish title - Only a CHANCE at title - NO EXPRESS WARRANTIES - Does not contain conveyance language, only what the grantor had at that time! (If you had title = Deed)

Answer 116

3 to 5 year SOL (Adverse Possession)

Answer 117

“Neither grantor/grantor’s heirs successors, or assigns will have, claim, or demand any right or title to the Property or any part of it” a. CASE: If he had title, makes it a deed to the property he actually has title to. b. One great use of a QC is to get people to disclaim interests/quit their claims (Example – 3 people claim, only one owner – if one is actually the owner, and the others are in the chain – the owner wants to clear the title up sign a QC give money get them out and get the claim from them to clear title) i. They are quitting their claim ii. Curing defects in title SHOULD ONLY BE USED FOR THAT ****SHOULD NEVER BE USED TO CONVEY PROPERTY

Answer 118

- In writing - Must have a grantor - Must be executed - Delivered & signed by the grantor/his agent - Acceptance of the deed (5.021 conveyance be delivered to the grantee – doesn’t have to be physically, can be made to a third party (bank, etc.), grantee doesn’t have to have knowledge, usually implied - Must have a grantee – has to name or designate a person or entity to be effective (if the grantee is dead = not valid, must be in existence at the time of the transfer) i. Okay to transfer to the estate - Consideration ii. Lack is not a ground to otherwise set aside a proper conveyance iii. Not by itself another (+ fraud or undue influence = it would be) - Dated i. Becomes important w/recording acts - Recording – Don’t have to (stupid not to) but doesn’t have to be recorded to be effective - A subsequent purchaser who has notice of the instrument is not a BFP (if you don’t = BFP) - Reservations and exceptions - Any restrictions - All this will come out of the title commitment

Answer 119

1. General Warranty Deed 2. Deed w/o Warranty 3. Quitclaim – Why is it w/ deeds because if you have title of the property it becomes a deed 4. Owelty of Partition Deed – Partitioning it between divorce usually 5. Partition Deed – Used for JTs = Cross Conveyance 6. Easement Agreements 7. Warranty Deed in Lieu of Foreclosure – No publicity of foreclosure sale so deed the property over to the lender in lieu of them foreclosing i. TSC – Says no such thing ii. State Bar says otherwise iii. Confusing – The foreclosure wipes out all inferior liens, the deed here does not – just a conveyance 8. Special Warranty Deed 9. Limited warranty 10. Correction Deed - Have both parties sign off on this, not just the grantor - All it’s doing is correcting something that’s not right - If there’s a major problem (like you didn’t own) won’t fix that

Answer 120

1) Seisin 2) Good right to convey 3) Covenant against encumbrances 4) Quiet Enjoyment 5) Warranty of Title 6) Covenant for Further Assistance 7) Closing Section

Answer 121

a. Comes from CL b. Person has to be in possession and claim an estate of freehold, holding what we call paramount/superior title to that estate c. Grantor is seized in the CL sense (He has good title that he’s purporting to someone else but no warranty is given) d. CL approach e. Does warrant title – now (drops down into warranty of title) f. Failure of title to any part of the estate which there is a covenant of seisen = breach g. If breached – breached at the time of conveyance h. Personal to the grantor they do not run with the land i. When these covenants are breached, upon conveyance, it creates a chose in action which does not pass to subsequent guarantees w/o assignment because they are not personal.

Answer 122

a. Grantor has the right to convey the property which he is purporting to convey b. Is construed s w/the covenant of seisin c. If you own the property w/all the right of ownership it has to contain the good right to convey d. Kind of melt w/Seisin

Answer 123

a. Not a covenant affecting defects in the title (first two would) b. Covenant against burdens on the title c. An encumbrance is an interest that diminishes the value of the estate being conveyed but is not inconsistent w/ passage of title i. You can convey property that is encumbered ii. Title passes sub to the property d. Normal: i. Liens ii. Mortgages iii. Taxes iv. Various types of assessments against the property (utility districts, HOA) v. Easements vi. Building restrictions vii. Deed restrictions viii. Water/Mineral Rights ix. Leases

Answer 124

a. Cannot lawfully interfere w/ the grantee’s peaceable enjoyment of property b. Most states this has been replaced w/ warranty of title c. Covenant is breached at the time the parties are evicted or disposed of the property

Answer 125

a. Premier Deed Covenant b. Includes some of the other above items in the warranty of title c. Can be General or Special d. General – Promise by the grantor to protect the grantee (his heirs, assigns, executors, etc.), against loss due to a failure or defect in title which exists at the time of conveyance binding on heirs, administrators, executors i. Covers losses which occur subsequent to conveyances ii. Losses must result from a defect which exists at the time of conveyance 1. Losses that occur after are not covered by GWD e. Special: Simply a limitation – If you have a conveyance by co-tenant it can be limited by his interest in the property i. Grantor will often limit his liability under the warranty of title to losses the grantee can sustain

Answer 126

A promise to pay damages from the grantor if certain circumstances or specific events exist at the time of conveyance. - Promise that is collateral to the conveyance - Goes along w/the conveyance if it is contained in the Deed - Can have a gift deed (love + affection = consideration) - Doesn't affect the size

Answer 127

a. Doesn’t warrant in fact, you are coveting or warranting the grantee that the grantor will be held harmless for losses sustained that are not warranted for i. 1 & 2 – Does have superior title w/the right to convey ii. 1& 2 – Begins when it’s breached (at the time of conveyance) b. Becomes operative after conveyance c. Because of this it runs with the land d. SOL runs when a loss is sustained (COA arises at breach) e. Evictions is required for breach of warranty i. Can be constructive ii. Filing a lawsuit = Positive Assertion iii. Can either yield, or contest (if you yield it’s because you know you’ll lose)

Answer 128

Either the price paid for the outstanding claim (use a QCD), or the value of the property loss due to the defect (damages equaling the value of the loss) - The grantee in whose favor the breech lands CANNOT recover damages until he has had a loss (someone asserts a title, mortgage, etc.) - Covers only proven claims (asserted superior title, or you yield to superior title)

Answer 129

With the land - continues to be passed through future conveyances. - MEANING, D (bottom of the ladder), can use C, B, or A up the chain of title - Losses are limited tow hat the person suing received FOR THE LAND - You only get one bite at the apple - Bad deed must occur at the time - Amount does not include improvements

Answer 130

Size - Needs to be another separate express covenant of quantity THINK; "More or less"

Answer 131

a. Personal Convents – Breached at the time of conveyance if breached at all i. COA rises at the time of conveyance ii. SOL starts running at that time b. It’s either there at the time of conveyance or it’s not c. Damages based on the reduction of value if the encumbrance cannot be removed i. Loss caused by easement that can’t be removed d. Or the cost of getting the encumbrance removed i. Pay to get them off e. Usually outside the warranty of title i. Some authority for it being included in the warranty of title – broad enough to include ii. TX = Separate

Answer 132

That the grantor is assigning: 1) Prior to the execution the grantor has not conveyed the property to anyone other than the grantee 2) At the time, it is free from encumbrances (i.e. they imply seisin, good right to convey & covenant against encumbrances)

Answer 133

If burdened = Encumbrance

Answer 134

Warranty Cases - Court applied based on warranty of title - If you warranted the property, you intended to convey the property (it was your intent to convey it all) Estoppel Cases - No warranty - Grantor cannot deny the title he previously granted to the grantee - Looking at the deed, it is asked whether it manifests an intention to convey the property that was described in the deed, if so, based on that representation the conveyance should benefit the grantee ``` Combo: - Cout applies based on estoppel - Grantor is denied to claim that he didn't convey everything he already made a representation that he intended to convey - Proven up on the basis of warranty (It is clear what his intent is) ```

Answer 135

The AATD holds if a grantor purports to convey ownership of real property that he actually does not own legal title to some of that property at the time of that conveyance but he later acquires property because of the transfer and representation made in the conveyance – A is estopped (or he has breached his warranty) a. A’s interest shoots through to B – Instantly b. Doesn’t allow a party the benefit of selling all the property when he doesn’t own all the property to then come back and say “Oops, that belongs to me.” c. Often considered “over conveying” (Duhig)

Answer 136

- Foreclosure sale (out of a third party so probably won't play)

Answer 137

LA, AR: First in time

Answer 138

SC: Provides that not only must the subsequent party acquire his interest where there is no notice of prior interest, he must also record first (Similar to bankruptcy)

Answer 139

Tx, NM: Not who filed first, but when was notice given first - Someone who recorded later might win 12. 001: Any instrument concerning real property MAY be recorded if it has been acknowledged 13. 001: Conveyances of real property will be VOID as to creditors and to subsequent purchasers for valuable consideration (BFPs) w/o notice - Conveyance will be void if you don't record it

Answer 140

Actual Constructive Notice by Possession

Answer 141

Means that notice which fairly puts a person on inquiry, which then you could obtain the full truth 1. Looks like someone told you 2. That is enough to qualify because you knew you should go look 3. Takes you out of innocent purchaser and recording act 4. Notice to agent = Notice to principal 5. Notice to title company – is not notice because they’re examining for themselves

Answer 142

i. If someone is in possession of the property that you’re interested in, it makes you question re: what right they have in the property ii. Puts the purchaser on notice that he has a duty to inquire about the claim or lack of claim the person who is on the property has 1. If there’s a lease, you know that your purchase of the property is subject to a L

Answer 143

i. Instruments affecting real estate will be notice to third parties if filed for record in the county where the land is located ii. Therefore, this is notice by filing for recordation iii. Is as effective as actual notice iv. Unlike actual notice, constructive is irrebuttable 1. Best kind in the sense it cannot be challenged v. Becomes constructive when delivered to the clerk and received by him 1. THINK: If you don’t have the filing fee, shouldn’t even take the filing when then the person never shows up (still = constructive notice)

Answer 144

Constructive notice if it is in the chain of title - Date of executed by common grantor to date executed currently.

Answer 145

Covers if the recording statute doesn't. Innocent purchaser who is not protected by a senior conveyance under the recording act, if they fit w/in the elements of the IPD, they can claim the protection of equity (you can invoke the doctrine)

Answer 146

a. A good faith purchaser of apparent legal title to real property i. Appears that the seller has good legal title b. Who pays valuable consideration for that property c. Without notice (actual or constructive) of a competing equitable interest i. If notice can be proved, you cannot claim ii. You’d be estopped to deny you were unaware of other owners d. Will be protected against others who may have equitable title in the property being purchased e. The basis is equity (like the Recording Act)

Answer 147

Puts the loss on the grantor due to his negligence in not recording and rewards the innocent grantee - Not a guarantee because it is an equitable remedy - Looked at on a case by case basis - Liberally applied to equitably interpert the doctrine