Warranty Deed
The grantor gives six covenants - three present and three future.
PReSeNt:
(1) Right to convey - essentially, seller guarantees he owns the land he is selling
(2) Seisen - same as above
(3) No encumbrances - no existing liens, or other encumbrances not in deed
Future (FEW):
(1) Further assurances
(2) Quiet enjoyment
(3) Warranty
MERGER: on closing date, contract for sale merges into the deed so buyer can only sue on deed at that point
A breach of the covenant against encumbrances occurs when:
A property is encumbered by a mortgage, lease, easement, or covenant not specified in the deed
*Will not be recognized if grantee has knowledge of the encumbrance, it was visible, or it benefited the land
An easement is in gross if:
it was granted to benefit a particular person as opposed to the land.
An express easement by grant arises when:
it is affirmatively created in a writing that is in compliance with the SOF.
If a written easement is granted but not recorded against the servient estate:
then the easement is not enforceable against a bona fide purchasor.
A warranty of fitness and suitability is implied in a contract for:
the sale of a newly constructed residence
- Applies to hidden and obvious defects
A seller warrants, under the warranty of fitness and suitability, that:
he used adequate materials and good workmanship in working on the residence
- Some states only allow OG buyer to sue, while some allow remote grantees to sue
The implied warranty of fitness and suitability generally covers:
construction defects, such as a defective electrical, pluming, or mechanical system, or a leaky roof or drainage problem that does not manifest itself until after the sale
Equitable Conversion
As soon as the contract is signed, seller retains legal title but equitable title shifts to buyer, thus the risk of loss between contract and closing falls on BUYER
Deed Requirements
Identify the buyer and seller, describe the land in question denoting a present intent to convey, signed by grantor, and it must BE DELIVERED
- Delivery is a question of intent to pass title presently
Quitclaim Deed
Grantor gives no covenants, no warranties of title, and the grantee gets whatever the grantor has
- takes subject to title defects, undisclosed easements, or other problems with no recourse
- If a seller conveys land on which there is an unsatisfied encumbrance such as a mortgage, and that encumbrance has priority against the buyer, the seller is liable to the buyer for any loss borne by the buyer only if the seller warranted that there was no such encumbrance against the property
Under the common law, a grantor can convey only those rights:
That the grantor had at the time of the conveyance - thus, common law follows the first-in-time, first-in-right principle
*All states have recording statutes that change the results of the CL principle
Notice Statutes
Protect BFPs for value who take without notice of the earlier transaction
- “Conveyance . . . is not valid against subsequent purchaser for value WITHOUT NOTICE unless it is RECORDED”
Race-Notice Statutes
Protect subsequent BFPs for value who take without notice and are the first to record
- “No conveyance . . . is valid against any subsequent purchaser for value WITHOUT NOTICE unless it is FIRST RECORDED.”
What is notice? (AIR)
Actual notice, Inquiry notice, Record notice (wild deeds do not give notice)
Mortgagor Liability
A mortgagor can transfer title to property, however, the mortgage will remain on the property and the mortgagor is still personally liable on the note
Transferee takes SUBJECT TO mortgage
A new transferee who takes subject to the mortgage is not personally liable
- Minority of jurisdictions: transferee may be deemed to impliedly assume the mortgage where the transferee paid seller only the difference between what the house was worth and the outstanding balance on the mortgage obligation
Transferee who ASSUMES the mortgage
If the transferee assumes the mortgage, he is personally liable along with the original mortgagor.
Novation
Novation occurs if the itital mortgagor, the new transferee, and the mortgagee all agree that the mortgagor is no longer liable and the transferee assumes the mortgagor’s duties.
Term of years lease
Specifies both a beginning and end date
Periodic tenancy
No fixed end date
- Repeats until one party gives valid notice to the other
Assignment
If a lease does not prohibit an assignment or sublease, a T can assign or sublease her interest in the lease
Constructive eviction
Commercial or residential
(1) LL breached a duty to T,
(2) breach caused a loss of substantial use and enjoyment of the premises, and
(3) T vacated premises within a reasonable time after giving LL adequate notice
Implied Warranty of Habitability
Breached ONLY in residential lease if the premises are uninhabitable
