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42 Cards in this Set
- Front
- Back
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Implied Warranty of Workmanlike Quality
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privity of contract is not necessary for subsequent purchasers to sue a builder or contractor under an implied warranty theory for latent defects which manifest themselves within a reasonable time after purchase and which cause economic harm. An individual not in privity in contract can recover for economic damages in contract as well as personal injury.
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2 Types of Indexes
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tract – looking it up by the tract of land
grantor-grantee – looking up a tract of land by the grantor or grantee's name |
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Recording Systems
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Recording acts generally do not affect the validity of a deed or other instrument. A deed is valid and good against the grantor upon delivery without recordation. The recording system serves 2 functions: (1) Establishes a system of public recordation of land titles; (2) preserves in a secure place important docs that, in private hands, may be easily lost or misplaced.
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Title Searches / Notice / Due Diligence
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Due diligence is required in title searches. Names like that of the record owner, spelled differently but pronounced alike, give constructive notice so long as they begin with the same letter. A diligent title search should give a prospective grantee notice of any encumbrances on the land.
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3 types of Recording Acts
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Pure Race – 1st guy to record wins
Pure Notice – if you're a subsequent purchaser and you have knowledge of a prior purchaser, you cannot prevail over them if you had knowledge of it Race-Notice Statute – provides that an unrecorded instrument is invalid against any subsequent purchaser without notice, regardless of whether the subsequent purchaser records prior to the first purchaser; a subsequent purchaser is protected against prior unrecorded instruments only if the subsequent purchaser (1) is without notice of the prior instrument and (2) records before the prior instrument is recorded. A Subsequent bona fide purchaser without notice always wins in a notice-jdx. The policy behind the Notice Jdx is to record |
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Chain of Title
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The recorded sequence of transactions by which title has passed from a sovereign to the present claimant. Also has the more technical meaning which refers to the period of time for which records must be searched and the documents must be examined within that time period.
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Guillette v. Daly Dry Wall
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If the deed is on public record and gives notice to the world, then that is sufficient for it to be valid for one to be on notice.
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Recording Systems and Protected Individuals
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Dift jdxs allow their recording systems to protect dift people; many protect purchasers and not donees or devisees. Sometimes it is difficult to figure out what the line is as to much much you have to pay in order to be a legitimate purchaser.
Pro Tanto Rule – protects the buyer to the extent of the payments made prior to the notice, but no further |
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Bona Fide Purchaser
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Takes title to real property without notice of the interests of others. A buyer who, prior to the payment of any consideration receives notice of an outstanding interest, pays the consideration at his or her peril with respect to the holder of the outstanding interest. Such a buyer is not protected as a bona fide purchaser and takes the property bound by the outstanding interest. But many jdxs have relaxed this rule and have protected buyers to the extent of the payments made prior to notice, but no further.
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3 Types of Deeds
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(1) General Warranty (2) Special Warranty (3) Quit Claim
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Bona Fide Purchasers and Quit Claim Deeds
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In a few jdxs, a purchaser by quitclaim deed cannot claim the position of a bona fide purchaser without notice
This rests upon the idea that a refusal of the grantor to warrant title should create a strong presumption that the title is defective It may even be held that a quitclaim deed in the chain of title puts all subsequent purchasers on inquiry notice |
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Three types of notice
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(1) actual – arises where one is personally aware of a conflicting interest in real property, often due to another's possession of the property
(2) constructive – notice that the law deems you to have regardless of your actual knowledge a. record – notice that one has based on properly recorded instruments b. inquiry – based on facts that would cause a reasonable person to make inquiry into the possible existence of an interest in real property |
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Waldorff v Eglin
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I: Whether Waldorf's occupancy, together with the purchase agreement, was sufficient notice so as to make Waldorff's interest in Unit 111 superior to that of the bank? R: A contract to convey legal title to real property on payment of the purchase price creates an equitable interest in the purchaser. Actual possession is constructive notice to the world.
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Marketable Title acts
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The purpose of Marketable Title Acts are to limit title searches to a reasonable period, typically the last 30 or 40 years. Thus, except for interests excepted by statute, title searches may be safely limited to the number of years specified in the statute. Marketable title acts are intended to operate in conjunction with, rather than as a substitute for, the recording acts. They seek to extinguish old title defects automatically with the passage of time.
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Torrens System v. Title Insurance: An Economic Analysis of Land Title Systems
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The Torrens System differs from the traditional recording system in that it establishes a legal procedure whereby the state guarantees the owner’s title
The key difference b/t the Torrens system and the recording system is that under the latter, a good-faith purchaser bears the risk of losing his interest in the land if a claimant later appears, whereas under the former the owner’s certificate defeats any competing claims not declared at the initial proceeding The principal advantage of land registration is that it clears clouded titles, thereby promoting land’s marketability and development |
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Title Insurance
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Developed b/c of the inadequacies and inefficiencies of the public records in protecting private titles
Has no fixed term and continues for as long as the insured maintains an interest in the property Title Insurance creates liability to the insured only and does not run with the land to subsequent purchasers Title Insurance guarantees that the insurance company has searched the public records and insures against any defects in the public records, unless such defects are specifically excepted from coverage in the policy Walker Rogge v. Chelsea Title and Guaranty: R: A Title Insurance Policy is a contract of indemnity under which the insurer for a valuable consideration agrees to indemnify the insured in a specified amount against loss through defects of title to, or liens or encumbrances upon realty in which the insured has an interest Title policies are liberally construed against the insurer and in favor of the insured Notwithstanding tat principle of construction, courts should not write for the insured a better policy of insurance than the one purchased Anyone who buys real estate without the aid of a surveyor runs the risk that he or she may not receive all the land of which he or she paid. In brief, title insurance is no substitute for a survey |
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Marketable Title
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Title free from reasonable doubt about its validity in the mind of a reasonable person; a defect must be substantial and injurious to render the title unmarketable; the facts must create reasonable doubt about the title
Difference b/t marketability of title and marketability of land |
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6 express warranties
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1 - Covenant of Seisin; 2 - Covenant of Right to Convey; 3 - Covenant Against Encumbrances; 4 - Covenant of General Warranty; 5 - Covenant of Quiet Enjoyment; 6 - Covenant of Future Assurances
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covenant of seisin
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A Present Warranty; you have and can seize the property and the grantee has the right to convey the land a promise that the grantor owns the interest that the deed purports to convey. the covenant of seisin will not be breached by defects in the title as long as the grantor has the legal rights the grantor purports to convey through that deed.
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Covenant of the right to convey
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(present warranty)The covenant of right to convey is the grantor's promise that the grantor has the right to convey the interest in the property identified in the deed.
As long as there are no restrictions on the grantor's ability to transfer the interest described in the deed, the grantor does not breach the covenant of right to convey. However, if the grantor's right to convey is somehow limited at the time the grantor delivers the deed to the grantee and, as a result, the grantor does not have the right to convey the interest described in the deed at the time the grantor executes and delivers the deed, the grantor will breach the covenant of right to convey. |
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Covenant Against Encumbrances
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(present warranty)the grantor promises the grantee that there are no encumbrances affecting the title to the property. As long as there are no encumbrances at the time the grantor delivers the deed to the grantee, the grantor will not breach this covenant.
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Covenant of General Warranty
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(future warranty)a promise (1) to defend the grantee against any lawful claim made against the grantee's title and (2) to compensate the grantee for successful claims made against title.
Under the terms of this covenant, the grantor would be held liable for: (1) the cost of litigation in defending the grantee's title including, but not limited to, reasonable attorney's fees associated with the defense of the title, and (2) damages for the loss caused by the title defects or encumbrances. Since the grantor is obligated to defend the title, the covenant is breached when the defense is needed and not provided. So to be held liable for breach of this covenant, one of the following two things must have occurred: (1) the claimant must have been evicted (actually or constructively) or (2) process to enforce the claim must have been started and the covenantor has failed to provide the defense. The mere existence of the title defect is not, by itself, a basis for liability. |
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Covenant of Quiet Enjoyment
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(future warranty) – grantee will not be disturbed by claims of superior title; the grantor is promising in regard to the property described in the deed that (1) no one who has a superior title to or interest in the property (2) will interfere with the grantee's rights to and possession. Notice how this differs from the covenant of warranty. The covenant of warranty is a promise about the grantor's future behavior (i.e., that grantor will provide a defense if the title is challenged by someone with paramount title). In contrast, the covenant of quiet enjoyment focuses on what will happen to the covenantee, i.e., that the covenantee will not be evicted by someone with paramount title.
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Covenant of Future Assurances
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(future warranty) - In providing the covenant of further assurances, the grantor is promising to take whatever steps are necessary, e.g., provide additional documentation as needed, in order to perfect (and thereby protect) the grantee's title. This usually addresses title defects, if any, that were present at the time the grantor delivered the executed deed to the grantee.
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Encumbrances
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Generally, an encumbrance is (1) a right affecting or an interest in the property that is the subject of the deed that is held by a person other than the grantor or grantee and (2) which is not inconsistent with or does not make nonexistent the title the grantor supposedly is transferring through the deed in question. are defined by statute as ‘taxes, assessments, and all liens upon real property’
The Court finds that the term ‘encumbrance’ does not extend to the presence of hazardous substances alleged in this case encumbrance on a title – include only liens, easements, restrictive covenants, and other such interssts or rights to the land held by a third person |
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Easements - How Easements are Created
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(1) Express - granted
(2) Easement by Estoppel - an irrevocable license (where a license is oral or written permission given by the occupant of land allowing the licensee to do some act that otherwise would be a trespass) (3) Implied - Easement Implied from Prior Use; Easement Implied by Reasonable Necessity (4) Easement by Prescription - Easement by Adverse Possession |
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Easement Implied from Prior Use - AKA Quasi Easement
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1. common owner – meaning prior to the division it had to be owned by the same person; and the unity of the ownership was severed
2. reasonable necessity – the prior use must be reasonably necessary for the use and enjoyment of the benefit of estate; the easement is reasonably necessary for the enjoyment of the dominant estate 3. pre-existing or prior use – the use was in place before the parcel was severed 4. apparent – the grantee could discover the existence of the use upon reasonable inspection (things that are non-visible can still be apparent, like a sewage pipe) 5. continuous use (not constant, but can't be sporadic) 6. intended continuation – both parties at the time of the division must intend that the use be continued |
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Easements Implied by Necessity
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you have to have it to get to your land. Implied when one tract of land is divided in such a way that one sub-parcel is land-locked from public roads or use (technically anything that is a complete necessity, but it is almost always that the necessity is that you need the easement to get to your land)
1. common owner – prior unity of ownership 2. necessity must exist at the time of severance (to enter, leave, or turn) 3. that particular, individual easement is strictly necessary for egress and ingress; an easement by necessity only exists so long as the need is present |
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Types of Easements
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(1) Appurtenant - benefits the land-owner of the dominant estate and it burdens the land-owner of the servient estate; you must have a burdened and benefited property here
(2) Gross - there is only a burdened property and a person who benefits from it; i.e. Duke Power |
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Negative Easement vs. Affirmative Easement
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Affirmative - gives the holder a right to go onto the servient estate for a specific purpose; permission to do something on another's land
Negative - gives the holder a right to prevent the possessor of the servient estate from doing some act on the servient estate; preclusion from doing something on your own land |
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Easement
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An irrevocable right to use another's land for a specific purpose; Covered under Statute of Frauds
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Real Covenants
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are agreements b/t 2 or more land owners that they will or wont do something with the land. It is enforceable by and against assignees. (A covenant that is enforceable is one which runs with the land.) Refers to a promise made by the promisor to the promisee which the promisee may enforce against the promisor in court.
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When do covenants run with the land?
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Covenants which compel the covenanter to submit to some restriction on the use of his property, touch or concern the land, and that the burden of a covenant which requires the covenanter to do an affirmative act, even on his own land, for the benefit of the owner of a “dominant” estate, does not run with the land.
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Like with easements, a real covenant or equitable servitude creates two types of land:
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** the benefited land, i.e., the land enjoying the benefit of the promise, and
** the burdened land, i.e., the land bearing the burden of the promise. |
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How do the courts determine if a covenant should run with the land?
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Ultimately, the gist of the courts' inquiries is whether there is acceptable evidence the parties intended there be a limitation on the use of the property by the one currently owning or possessing it, even if the one currently owning or possessing it was not the original promisor. If so, the courts find the parties created a real covenant or equitable servitude; On the other hand, if the promise is merely personal, i.e., unconnected with the acquisition and use of a real property interest, in the majority of jurisdictions it cannot be a restriction, covenant or equitable servitude within the context of our inquiry.
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For a covenant to run with the land, it must
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(1) be in writing, (2) it must include the successors, (3) must touch and concern the land (effect of covenant must increase the usefulness or value of land to one or the other) (4) a successive relationship to the land, privity of estate, which is some sort of successive relationship.
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Negative Covenant vs. Affirmative Covenant
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A negative covenant is a promise to refrain from using the property in a particular way. An affirmative covenant is a promise to use the property in a particular way.
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Neponsit v Emigrant Savings Bank
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R: Regardless of the intention of the parties, a covenant will run with the land and will be enforceable against a subsequent purchaser of the land at the suit of one who claims the benefit of the covenant, only if the covenant complies with certain legal requirements. Elements of a Covenant: (1) It must appear that the grantor and grantee intended that the covenant should run with the land; (2) it must appear that the covenant is one 'touching' or 'concerning' the land with which it runs; (3) it must appear that there is 'privity of estate' b/t the promisee or party claiming the benefit of the covenant and the right to enforce it, and the promisor or party who rests under the burden of the covenant. (4) be in writing. Test for covenant: Does the covenant impose, on the one hand, a burden upon an interest in land, which on the other hand increases the value of a dift interest in the same or related land?
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Western Land v. Truskolaski:
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Even though nearby avenues may become heavily traveled thoroughfares, restrictive covenants are still enforceable if the single-family residential character of the neighborhood has not been adversely affected, and the purpose of the restrictions has not been thwarted. R: As long as the original purpose of the covenants can still be accomplished and substantial benefit will inure to the restricted area by their enforcement, the covenants stand even though the subject property has a greater value if used for other purposes.... Even if the property is more valuable for uses for which it is restricted, law trumps policy.
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Rick v. West:
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Restrictive covenants in respect of land will be enforced by preventive remedies while the violation is still in prospect, unless the attitude of the complaining owner in standing on his covenant is unconscionable or oppressive.
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Common Interest Communities
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R3P §6.2: The distinctive feature of a common-interest community is the obligation that binds the owners of individual lots or units to contribute to the support of common property, or other facilities, or to support the activities of an association, whether or not the owner uses the common property or facilities, or agrees to join the association.
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Condominiums
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Each unit is owned separately in fee simple by an individual owner. The exterior walls, the land beneath, the hallways, and other common areas are owned by the unit owners as tenants in common.
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