Deeds

Front 1

What is the effect of a forged deed?

Back 1

A forged deed is void and conveys no title. Thus there can be no bonified purchaser of a forged deed. All new interests created in the realty after the forgery are a nullity, and title remains as it was before the deed was forged. If the grantee of the forged deed adversely possesses the property for the proscribed period of time, however, that continuous possession may ripen into title, not from the forged deed, but from the adverse possession.

Front 2

Acknowledgment of signature - purpose

Back 2

The seller's signature on the deed or other document involving real property must be acknowledged by a notary for recording purposes. If the signature is not acknowledged, the county clerk will not accept it for filing.

Front 3

acknowkedgment

Back 3

An acknowledgment is not necessary to transfer title, and it does not affect the transfer to the grantee by the grantor. However, the inability to record may affect the grantee’s interest as to third partoes, provided the third party is a BFP. Rule, an instrument recorded without any acknowledgment, or with a defective acknowledgment, is not sufficient to give constructive notice of its contents to a subsequent BFP, who is deemed to take notice of the deed even though it was not recorded.

Front 4

Significance of grantor's intnet

Back 4

To constitute delivery to the grantee, the grantor's intent must be to pass title immediately to the grantee, and the grantor must give up dominion and control over the deed.

Front 5

DElievery of deed

Back 5

A deed not properly delivered is a nullity, even if it is recorded.

Front 6

What if the grantee gets the deed when delivery was nor for the purpose of delivering title.

Back 6

Even though an executed deed is handed to the grantee, it does not affect title if that delivery as done for some other purpose.

e.g., for example, submit to the grantee's attornee for inspection, or to submit for safe keeping until inspection

Front 7

A

I

D

Back 7

If the deed is a gift, the AID gift elements must be established:

A - acceptance by the donee, which is usually implied if the conveyance would be beneficial.

I - Intent to make immediate gift

D- Deed that puts the instrument out of the dominion and control of the grantor.

Front 8

Can the grantor condition delivery on his own death?

Back 8

A deed delivered directly to the grantee that is orally conditioned on the grantor's death is void because the deed is testamentary in intent, and does not satisfy the statute of wills.

Front 9

What if the grantor delivers deed to an escrow, to be delivered upon the grantor's death?

Back 9

Escrow delivery to a third person for delivery upon the grantor's death usually is treated as vesting immediately in the grantee.

However, if escrow delivery is made to an independent contractor, or is made to the donee's agent, then the gift is effective immediately upon delivery to the donee's agent.

Front 10

Using an agent to deliver a deed..

Back 10

When the grantor intends to deliver title immediately upon delivery, the law creates an escrow agent where the deed is delivered to the donee. If the escrow agent is the donor's agent, then the escrow is not completed until the deed is delivered to the donee. Thus if before delivery the donee dies, becomes mentally disabled, or changes her mind, then the agent's authority to delivery is revoked under agency law.

Front 11

Deeds - Four Types

Corrective

Back 11

Four types of deeds to go over:
1- Corrective deed - the customary method to correct is for the grantor to execute and deloevery to the grantee in the form originally intended. The seller’s refusal to issue such a deed would breach the covenant of further assurance if such covenant was given in the first deed. If the grantor refuses, the remedy is to sue for reformation.

If one grantee is omitted on a deed, or the extent of his interest is misstated, then any other grantees otherwise adversly affected by the corrective deed must join in its execution.

Front 12

Quitclaim

Back 12

2- Quitclaim deed- the simplest of all deeds. The grantor covenants to convey only what he may have, and simply states that he is quitting any claim to the land.
a. If a contract contains no mention as to the type of deed to be delivered at closing, then only a quitclaim deed need be tendered.
b. If the K calls only for a quitclaim deed, the seller’s title must nevertheless be marketable. However, if B accepts the deed without raising a n objection to title, then, under the merger doctrine, the grantee may thereafter only look to the deed for a remedy.
c. Because a quitclaim deed contains no warranties, the grantee could no longer object to the title defect..
d. A contract to give only a quitclaim deed is proper when the buyer accepts it, regardless if the title was not marketable.

Front 13

Special Warranty Deed

Back 13

Ny calls a bargain and sale deed with a covenant against the grantor's acts.

This deed covenants that the grantor has done nothing during hte grantor's period of ownership to encumber the marketability of title.

In Ny, 95% deal with this type of deed.

Front 14

The S in SEC FEW

Back 14

S- Covenant of SEASON - grantor has the quantity and quality of the land purpoted to be conveyed, that is, he owns four acres and not one, he holds a fee simple and not merely a life estate, and he is not a cotenant with an unnamed third person.

Front 15

The E is SEC FEW

Back 15

The covenant against ENCUMBRANCES, which covenants that no third person has any lien, lease, restrictive covenant, easement, or other interest, (an adverse possessor), that would diminsh the properties value, excecpt for those ecumbrances expressly stated in the deed. E.G. this warrants that there are no mortgages, leases, judgments, encrochments, easements or profits existing after the deed is delivered.

Front 16

C in SEC

Back 16

The covenant of the right to CONVEY, which simply warrants the grantor has the right and the authority to convey the title

Front 17

SEC vs. FEW

Back 17

SEC covenants are present covenants, breached at all when the deed is delivered. The covenants are made only to the grantor's immediate grantee (direct privity of contract), These three covenants are not intended to "run with the land" to future grantees.

Front 18

F in FEW

Back 18

F - Covenant of further assurances, which covenants that the grantor wil execute any documentation necassary to clear up the title for any subsequent grantees (sixty or seventy years later)

Front 19

E in SEC FEW

Back 19

covnenat of quiet ENJOYMENT, covenants that the grantee's possession will not be suturbed, and if so the grantor will pay damages to any subsequent grantees who are ejected from the property by a third person with a superior claim to the property.

Front 20

Win SEC fEW

Back 20

The covenant of warranty, that the grantor forever warrants and will defend from legal attack the title as it is described in the deed.

Front 21

WHen can a grantee recover for attornees fees when he has to sue a third party over the title?

Back 21

The deed'ds garntee or subsequent grantees can recover attornees fees expended in defending against a third party suit for breach of few warranties, but only if the grantee loses title, or pays money to rid the title of its flaw. If a grantee prevails in a claim by a third party, then she cannot recover damages under SEC FEW because the covenant of quiet enjoyment was not breached, because there was no ejectment, and there was no payment to the third person in exchange for a release of the third parties claim.

Front 22

MultiState problem

In a five year period, the following conveyances occured on A's land:

A conveyed title of vacant land to B, then B conveyed it to C, and C conveyed it to D. D then conveyed by general warranty deed (SEC FEW) a deed to E for 80,000.

E took out a 90,000 mortgage and built a home. When he went to sell it to F for 250,000, it was discovered that C's signature on the deed to D was forged, thus E lacked marketable title.

Can E recover 250,000 from D?

Back 22

No, because breach of an SEC FEW claim is limited to out of pocket restitution loss, no (expectation damages), and the out-of pocket loss cannot exceed the purchase price received from the grantor of a warranty deed (80,000). The measure of damages is the difference in the land's value s described in the deed (80,000), and the reduced value of the land as encumbered (it is worth nothing to E). NYAA 574

Front 23

Can you recover for subsequent improvements, or appreciation in value, on a breach of the general covenant.

Back 23

Subsequnet improvements made on the realty (contruction of a home), as well as the appreciation in the land's value, are not recoverable as reliance damages against the grantor of a warranty deed.

Front 24

How could D's lawyer have defended against the

Back 24

D's lawyer should have advised D to obtain title insurance, whch ensures D's fee interest in from such claims. It is a premium insurance policy, and the protection continues even after D conveys away the title.

Thus, een though D was found to have breached SEC FEW warranties, the title company would defend the claim by E against D, and would pay D's damages.

Front 25

How much would D owe E if the deed were a quitclaim deed? Here, D would owe nothing, because D made no warranties with that deed.

Back 25

Nothing, quitclaim makes no warranties.

Front 26

What would happen to E's 90,000 mortgage

Back 26

Since E did not own the land (C did) C's prior recorded deed preails, and it would extinguish M;s mortgage on the land. However, E's 90,000 debt to M under the mortgage note is enforceable by M against E personally.

Front 27

Deed by Estoppel

Back 27

Deed by estoppel, if G signed a deed but did not own the land, or G's interest was less than the deed purported to convey (breach of the covenant of season), then G is liable for breach of the covenants contained in the deed. However, if G later acquires part or all of that title, G is estopped from asserting any subsequent rights to the title.

Most courts now hold no action is necessary, and treat the title as automatically passing to the grantee (implied by law.)

This is reffered as the implied title theory, but this doctrine does not appy if the grantor's first deed was simply a quitclaim deed.

Front 28

Assume JGP owns a building downtown, he puts up a sign "JG"_ and moves to florida. Damien gets a call form someone looking to buy the building, and Damien forges John's name in selling it to B.

What happens?

Back 28

B gets no title, but has a claim for breach of warranty of season, and if JGP dies and leaves his property to Damien, title passes automatically to B estoppel.

Front 29

Assume JGP is going to sell his home (held in tenancy by the entirities), to to B, but the house is in his wife Karen's name. He has and has his girlfriend come in to forge his wife's name. What happens?

Back 29

B has claim for breach of warranty against JGP but does not get title.

If JGP dies, wife gets the deed due to survivorship. But if wife dies, goes directly to B (deed by estoppel) when JGP would have gotten it due to survivorship. JGP is estopped from claiming title because he conveyed it.

Front 30

What about quitclaim deeds?

Back 30

This is referred ti as the "after acquired title" theory, and it can also be applied to mortgages or leases, but this doctrine does not apply if the grantor's first deed was simply a quitclaim deed.

Front 31

Recording Statutes

Back 31

What do you do when you get assigned a contract? First notifty the other party that you've been assigned.

When a conveyance of real property is made, we file it at the recording office

Front 32

What if someone recorded before I bought the property

Back 32

Recording the instrument warns subsequent persons of the grantees existing interest in the realty. If that interest is recorded, then any subsequently created interest in the realty takes it subject to "the earlier recorded interest".

Front 33

CL rule regarding second in time grantees.

Back 33

At Cl, before the recording statutes, the governing rule was that the grantee whose interest was created first in time prevailed over a subsequently created interest on the theory that when G conveyed the property to grantee #1, G had nothing left to give.

Front 34

Factors necessary to be a BFP so as to prevail over a prior unrecorded interest.

Back 34

In order to prevail over a prior unrecorded title or interest, the subsequent purchaser must

1. Act in good faith in acquiring the subsequent interest.
2. Pay some new consideration, or part with some value or right (not love and affection)
3. An antecedent debt (past consideration) generally is not value under the recording act, thus a creditor who records a debt on the debtors realty, or a credit in order to secure payment on an oldloan, has the debtor execute a mortgage to secure the debt and records it has not given any new consideration, and thus will not prevail over a prior unrecorded interest in the debtors realty.

Front 35

What happens when there's a judgment recorded against property, or a mortgage on the property?

Back 35

Ordinarily a judgment once recorded (first in time) prevails over a subsequently created interest in the realty (a subsequent mortgage or deed by the judgment debtor) because the subsequent interest had constructive notice of the prior recorded judgment, and thus the subsequent interest could not qualify as a bfp.

Front 36

P- J records a judgment against B. EIght months later, B buys real property in the county where the county where the judgment was recorded and took out a 90,000 mortgage from M bank. After title closed, who has priority, J or M?

Back 36

because if a judgment is recorded but the debot owns no property, burt subsequently buys real estate in that county, then the judgment attaches to the realty. However, if the debotr financed the purchase price with a purchase money mortgage,either (a mortgage taken back by the seller, or a mortgage given by a bank) to finance all or part of the purchase price, then the pmm mortgage prevails over the prior recorded judgment, even though the mortgagee took with notice of the prior judgment but only to the extent the mortgage proceeds were used that property.

Front 37

What happens t=when there is a municipal tax foreclosure?

Back 37

A municap tax foreclosure for nonpayment of real property taxes extinguishes all prior recorded instriments, including deeds, judgment liens, leases, ;and mortgages on the realty, provided MOP actual notice of the foreclosre sale was given to each recorded interest, they have to get named in the lawsuit.

Front 38

Third rule for prevailing over past purchaser.

C

Back 38

THe subsequent purchaser must take its interest in the realty without C(onstructive)I(A notice of the prior interst in the realty.

Purchasers have a duty to search the chain of title for any prior recorded interests. Subsequent purchasers are deemed to have consructive notice of any document previously recorded.

Front 39

The I in CIA required to prevail against a previous purchaser

Back 39

I - Inquiry notice where facts exists that would excite the suspicion of a reasonable person and cause her to further investigate and make inquiry as to a third persons possible interest in the realty. Failiure to make reasonable inquiry is negligence, and it will defeat BFP status. The subsequent purchaser will be charged with notice that a reasonable inquiry would have revealed.

Front 40

A

Back 40

Actual Notice: This is notice, either orally, or on a document, of a prior unrecorded interest.

Front 41

actual notice problem - O owner took out a 100,000 mortgage, but the mortgagee neglected to record it in the title. B contracted to buy the land, did a title search and found no mortgage. At the closing,O's deed, which B did not read, stated the sale was subject to a 100,00$ mortgage.

Back 41

Here B takes title subject to the mortgage because he was given actual notice on the deed.

Front 42

What if you buy from a BFP who prevailed over a previous purchaser?

Back 42

A subsequent BFP has a superior interest over the prior unrecorded interest, and can transfer that BFP status to future grantees who otherwise would not qualify as BFPs.under the recording stateu shelter doctrine.

These future grantees prevail over the prior unrecorded interest, even though they paid no value for their interest, or they took with notice of the prior unrecorded interest

Front 43

What if the subsequent purchaser is a BFP?

Back 43

If a subsqeutnly created interest does not qualify as a BFP, then the prior unrecorded interst prevails under the CL rule that the interest first in time prevails

Front 44

What happens t=when there is a municipal tax foreclosure?

Back 44

A municap tax foreclosure for nonpayment of real property taxes extinguishes all prior recorded instriments, including deeds, judgment liens, leases, ;and mortgages on the realty, provided MOP actual notice of the foreclosre sale was given to each recorded interest, they have to get named in the lawsuit.

Front 45

Third rule for prevailing over past purchaser.

C

Back 45

THe subsequent purchaser must take its interest in the realty without C(onstructive)I(A notice of the prior interst in the realty.

Purchasers have a duty to search the chain of title for any prior recorded interests. Subsequent purchasers are deemed to have consructive notice of any document previously recorded.

Front 46

The I in CIA required to prevail against a previous purchaser

Back 46

I - Inquiry notice where facts exists that would excite the suspicion of a reasonable person and cause her to further investigate and make inquiry as to a third persons possible interest in the realty. Failiure to make reasonable inquiry is negligence, and it will defeat BFP status. The subsequent purchaser will be charged with notice that a reasonable inquiry would have revealed.

Front 47

A

Back 47

Actual Notice: This is notice, either orally, or on a document, of a prior unrecorded interest.

Front 48

actual notice problem - O owner took out a 100,000 mortgage, but the mortgagee neglected to record it in the title. B contracted to buy the land, did a title search and found no mortgage. At the closing,O's deed, which B did not read, stated the sale was subject to a 100,00$ mortgage.

Back 48

Here B takes title subject to the mortgage because he was given actual notice on the deed.

Front 49

What if someone recorded before I bought the property

Back 49

Recording the instrument warns subsequent persons of the grantees existing interest in the realty. If that interest is recorded, then any subsequently created interest in the realty takes it subject to "the earlier recorded interest".

Front 50

CL rule regarding second in time grantees.

Back 50

At Cl, before the recording statutes, the governing rule was that the grantee whose interest was created first in time prevailed over a subsequently created interest on the theory that when G conveyed the property to grantee #1, G had nothing left to give.

Front 51

Factors necessary to be a BFP so as to prevail over a prior unrecorded interest.

Back 51

In order to prevail over a prior unrecorded title or interest, the subsequent purchaser must

1. Act in good faith in acquiring the subsequent interest.
2. Pay some new consideration, or part with some value or right (not love and affection)
3. An antecedent debt (past consideration) generally is not value under the recording act, thus a creditor who records a debt on the debtors realty, or a credit in order to secure payment on an oldloan, has the debtor execute a mortgage to secure the debt and records it has not given any new consideration, and thus will not prevail over a prior unrecorded interest in the debtors realty.

Front 52

What happens when there's a judgment recorded against property, or a mortgage on the property?

Back 52

Ordinarily a judgment once recorded (first in time) prevails over a subsequently created interest in the realty (a subsequent mortgage or deed by the judgment debtor) because the subsequent interest had constructive notice of the prior recorded judgment, and thus the subsequent interest could not qualify as a bfp.

Front 53

P- J records a judgment against B. EIght months later, B buys real property in the county where the county where the judgment was recorded and took out a 90,000 mortgage from M bank. After title closed, who has priority, J or M?

Back 53

because if a judgment is recorded but the debot owns no property, burt subsequently buys real estate in that county, then the judgment attaches to the realty. However, if the debotr financed the purchase price with a purchase money mortgage,either (a mortgage taken back by the seller, or a mortgage given by a bank) to finance all or part of the purchase price, then the pmm mortgage prevails over the prior recorded judgment, even though the mortgagee took with notice of the prior judgment but only to the extent the mortgage proceeds were used that property.