Transfer of Title by Deed; Recording

A court is least likely to reform a deed that __________.

Contains a prior agreement the parties wish to change A court is least likely to reform a deed that contains a prior agreement the parties wish to change. Reformation is an equitable action in which the court rewrites a deed to make it conform to the parties' intention. Reformation will be granted if the deed does not express what the parties agreed to for any of the following reasons: 1. It reflects the parties' mutual mistake; 2. It contains a drafting error; or 3. It reflects one party's mistake—but only if that mistake was induced by the other party's misrepresentation or inequitable conduct. However, if property has passed to a bona fide purchaser for value who relied on the original language of the deed, the court will not reform it.

If a deed containing each of the following descriptions of land results in an ambiguity, to which will a court afford the most weight?

"From Moss Lake to the oak tree" If a deed containing each of the following descriptions of land results in an ambiguity, a court will afford the most weight to the description "from Moss Lake to the oak tree." A deed must identify the land to be conveyed. When a mistake or inconsistency in the description leaves in doubt the exact location of the property, and the court otherwise lacks clear evidence of the parties' intent, the following rules of construction apply: 1. Natural monuments (e.g., "from Moss Lake to the oak tree") prevail over all other methods of description, including artificial monuments, courses and distances, and quantity measurements; 2. Artificial monuments (e.g., stakes, buildings) prevail over all but natural monuments; 3. Course measurements (e.g., "North 25 degrees to Main Street") prevail over distance measurements (e.g., "East 45 feet to Grace Street"); and 4. All of the foregoing prevail over general descriptions such as name or quantity (e.g., "10 acres of land known as Blackacre").

In order to prevail over a prior grantee under a notice statute, when must a subsequent bona fide purchaser record?

A bona fide purchaser will prevail over a prior grantee under a notice statute without ever recording. A bona fide purchaser will prevail over a prior grantee under a notice statute without ever recording. A notice statute is a recording act that alters the common law rule of "first in time, first in right" to protect a subsequent bona fide purchaser ("BFP")—i.e., one who gives valuable consideration and lacks notice of the prior conveyance. A notice statute requires only that the subsequent purchaser have no actual or constructive (i.e., record or inquiry) notice at the time of her conveyance. While a prior grantee can prevent the existence of a subsequent BFP by recording, a BFP will be protected even if she does not record. A subsequent BFP need not record before she learns of the prior grant. As is explained above, notice statutes protect subsequent BFPs regardless of whether they record. Additionally, the notice requirement of BFP status is measured from the time of the conveyance—not from the time of recording. Similarly, a subsequent BFP under a notice statute need not record before the grantor records. She will prevail simply because she took for value and lacked notice of the prior grant at the time of her conveyance. Also, a subsequent BFP need not record before the prior grantee records. This is the requirement only of race and race-notice statutes.

Which of the following correctly states a presumption regarding the delivery of a deed?

A grantor's acknowledgment of a deed before a notary and subsequent recordation constitutes a valid delivery The following correctly states a presumption regarding the delivery of a deed: A grantor's acknowledgment of a deed before a notary and subsequent recordation constitutes a valid delivery. A deed will not transfer an interest in land unless it has been delivered by the grantor and accepted by the grantee. Delivery is presumed if the deed is: (i) handed to the grantee, or (ii) acknowledged by the grantor before a notary and recorded. A grantee's return of a deed is NOT a reconveyance to the grantor. Title passes to the grantee upon effective delivery, and returning the deed to the grantor has no effect. To effect a reconveyance, the grantee must execute and deliver a new deed. A grantee does NOT reject a deed because she failed to expressly accept it. In most states, the opposite is true—acceptance is presumed if the conveyance is beneficial to the grantee, regardless of whether the grantee knows of it. In other states, acceptance is presumed only where the grantee knows of the grant and fails to reject it. In all states, acceptance IS presumed if the grantee is an infant or an incompetent.

Which of the following always is required in order to transfer legal title to real property?

A living grantee A living grantee always is required in order to transfer legal title to real property. Property cannot be conveyed to a grantee who does not exist. Thus, a deed to a grantee who is dead at the time of delivery is void. Manual transfer of a written deed is not always required in order to transfer legal title to real property. While a delivery is necessary for a deed to pass title, delivery need not consist of a physical handing over of the deed. Delivery merely requires some act coupled with a present intent to pass title. For example, a deed recorded by the grantor is presumed to have been delivered. Moreover, if the grantor is physically disabled, words alone, or even nods or gestures, may accomplish a delivery. A competent grantor is not always required in order to transfer legal title to real property. While title may be transferred through operation of law, land typically is conveyed by deed. To be valid, a deed must be in writing, identify the land and the parties, and be signed by the grantor. A deed that is defective may be classified as either void or voidable. Voidable deeds include those executed by one without capacity (e.g., because of minority or insanity). While a void deed can be set aside by the court at any time, a voidable deed will be set aside only if the property has not yet passed to a bona fide purchaser. Moreover, a court may appoint a guardian or conservator to execute a deed on behalf of an incompetent grantor. Consideration is not required in order to transfer legal title to real property. A grantor can convey real property by inter vivos gift if (i) he has donative intent, (ii) the deed is delivered, and (iii) the deed is accepted. Consideration is not necessary.

O conveys Blackacre to A on Monday. O conveys Blackacre to B on Tuesday. A records on Wednesday. B records on Thursday. If both parties paid valuable consideration for the land, and neither knew of the other's deed, who owns Blackacre?

A, under a race or race-notice statute If both parties paid valuable consideration for the land, and neither knew of the other's deed, A owns Blackacre under a race or race-notice statute. A race statute is a recording act that alters the common law rule of "first in time, first in right" to protect the first party to record. Notice is irrelevant. Thus, a later transferee who records first takes title even if she knew of the prior conveyance. Here, A prevails over B under race statute because A recorded first. Under a race-notice statute, a subsequent bona fide purchaser ("BFP")—i.e., one who pays valuable consideration and lacks notice of the prior conveyance—prevails over a prior grantee only if she records before the prior grantee. Here, A prevails—and NOT B—under a race-notice statute because B did not record first. A would not own Blackacre under a notice statute (and thus not under every recording act). Under a notice statute, a subsequent BFP need not record in order to prevail over a prior grantee who failed to record. A notice statute requires only that the subsequent purchaser have no actual or constructive (i.e., record or inquiry) notice at the time of the conveyance. Here, if B had no notice of the O-A conveyance at the time of her conveyance from O, B would prevail over A even though B did not record her deed first. Because A prevails over B under a race or race-notice statute, B does not own Blackacre under every recording act.

A deed must contain which of the following in order to be valid?

An identification of the grantor A deed must contain an identification of the grantor in order to be valid. A deed must identify the parties (grantor and grantee) by name or other description (e.g., "my eldest son"). Note, however, that if a deed is delivered with the identity of the grantee left blank, courts will presume that the person taking delivery of the deed has the authority to fill in the grantee's name. A deed need not contain the metes and bounds of the land in order to be valid. A deed must unambiguously identify the land, but the description need not be formal and may incorporate extrinsic evidence. Thus, metes and bounds is only one of several permissible methods of description. A deed need not contain a recitation of the consideration paid in order to be valid. In fact, no consideration is required. A deed may validly convey property by inter vivos gift so long as there is donative intent, delivery, and acceptance. A deed need not contain the grantee's signature in order to be valid. Even if the deed contains covenants on the grantee's part, her acceptance of the deed is sufficient to make those covenants enforceable.

What is a present covenant for title?

Covenant against encumbrances The covenant against encumbrances is a present covenant for title. A general warranty deed contains covenants for title through which the grantor warrants against title defects created by herself and prior titleholders. The usual covenants for title include present covenants, which can be breached only at the time of conveyance; and future covenants, which can be breached only upon eviction (i.e., interference with the possession of the grantee or his successors by someone with better title). Through the covenant against encumbrances, the grantor warrants that there are no encumbrances (e.g., easements, profits, or mortgages) against the title or interest conveyed. Because this covenant will be breached, if at all, at the time of conveyance, it is a present covenant. The covenant for quiet enjoyment is a future covenant for title. Through it, the grantor warrants that the grantee will not be disturbed in his possession or enjoyment of the property by a third party's lawful claim of title. The covenant of warranty is a future covenant for title. Through it, the grantor agrees to defend the grantee's title from any third party's lawful or reasonable claims of title and to compensate the grantee for any related loss. The covenant of further assurances is a future covenant for title. Through it, the grantor promises to perform whatever acts are reasonably necessary to perfect the title conveyed if it turns out to be imperfect.

In most states, a buyer who has paid only part of the purchase price under an installment land contract:

Is protected by recording acts only to the extent of payments made In most states, a buyer who has paid only part of the purchase price under an installment land contract is protected by recording acts only to the extent of payments made. Notice and race-notice recording acts protect bona fide purchasers ("BFPs") from prior unrecorded conveyances of the same property. A BFP is a purchaser who takes land without notice of a prior instrument and pays valuable consideration. In a dispute between a subsequent purchaser under an installment land contract and a prior claimant of the same land, the court may: 1. Award the contract purchaser a share of the property equal to the proportion of payments made as a tenant in common with the prior claimant; 2. Award the land to the prior claimant, but give the contract purchaser a lien on the property to the extent of the amount paid; or 3. Award the land to the contract purchaser, but give the prior claimant a lien on the property to the extent of the balance still owed. Thus, in most states, a purchaser who has paid only part of the purchase price under an installment land contract DOES qualify as a purchaser and is somewhat protected by the recording acts (as stated above), but he is NOT protected by recording acts to the extent he would be had he purchased the property outright.

A grantor hands a deed to a grantee and says, "I want you to hold on to this deed so you can have my land when I die." Will a court likely rule that delivery occurred?

No, because the grantor's statement is admissible to show that the deed was not delivered No, a court will not likely rule that delivery occurred, because the grantor's statement IS admissible to show that the deed was not delivered. A deed is not effective to transfer an interest in realty unless it has been delivered. This delivery requirement is satisfied through words or conduct evidencing the grantor's intent that that title pass immediately and irrevocably, even if the right of possession is postponed until some future time. Parol evidence is admissible to prove that the grantor lacked this intent. Here, the grantor merely wanted the grantee to "hold on to this deed" but indicated that title should not pass until the grantor died. The grantor's statement is NOT admissible to show that delivery of the deed was conditional. Although parol evidence is admissible to show that no delivery was intended, if a deed is unconditional on its face and given directly to the grantee, parol evidence is inadmissible to show that the delivery was in fact subject to a condition. Although delivery is presumed if a deed is handed to the grantee, the presumption may be rebutted by, for example, evidence that the grantor did not intend the deed to have a present operative effect.

What is one effect of properly recording a deed to real property?

Raising a presumption that the deed is authentic. Raising a presumption that the deed is authentic is one effect of properly recording a deed to real property. A deed need not be recorded to be valid. However, properly recording a deed has several advantages, such as raising rebuttable presumptions that the instrument was validly delivered and that it is authentic. A significant effect of recording a deed is to give parties constructive notice of its existence and contents. Putting the world on record notice protects the landowner by preventing title from being taken by a subsequent bona fide purchaser from the same grantor. Preventing third parties from acquiring title by adverse possession is not an effect of properly recording a deed to real property. Recordation does not protect against interests that arise by operation of law (e.g., title by adverse possession), rather than from a recordable document. Because there is no instrument to record to perfect such interests, the recording acts do not apply. Making a properly executed deed enforceable is not an effect of properly recording a deed to real property. Recordation is wise because it prevents a later grantee from being a bona fide purchaser and raises the presumptions discussed above. However, recordation is not necessary for a valid conveyance; a deed is effective and enforceable between the original parties to it without being recorded. Validating an improperly executed deed is not an effect of properly recording a deed to real property. To be valid, a deed must be a writing, signed by the grantor, that identifies the land and the parties. A deed is not effective unless it has been delivered and accepted. While proper recording raises the presumption that a deed is authentic and was validly delivered, these presumptions are rebuttable. Recording a deed does not validate any aspect of an otherwise invalid conveyance (e.g., a forged or undelivered deed).

If a deed never was delivered, but the listed grantee discovers the deed and records it, the deed is:

Void If a deed never was delivered, but the listed grantee discovers the deed and records it, the deed is void. A deed is not effective unless it has been delivered and accepted. While proper acknowledgment and recording raises the presumption that a deed is authentic and was validly delivered, this presumption is rebuttable in most states. Recording a deed, by itself, does not validate any aspect of an otherwise invalid conveyance (e.g., a forged or undelivered deed). Here, the grantor never delivered the deed; thus, it is not valid (i.e., void). A void deed will be set aside by a court even if title purportedly has passed to a bona fide purchaser. If a deed never was delivered, but the listed grantee discovers the deed and records it, the deed is not voidable. In contrast with void deeds, voidable deeds will be set aside only if the property has not passed to a bona fide purchaser. Deeds considered voidable include those executed by incapacitated persons (e.g., minors) or obtained through fraud in the inducement, duress, undue influence, mistake, and breach of fiduciary duty.

When a watercourse or body of water forms the boundary of a parcel of real property, the legal boundary line is __________.

changed by a slow, imperceptible change in the watercourse When a watercourse or body of water forms the boundary of a parcel of real property, the legal boundary line is changed by a slow, imperceptible change in the watercourse. When a river or stream serves as a boundary, the slow erosion of the bank results in the owner losing title to that area. Similarly, the slow deposit of soil—i.e., accretion—belongs to the owner of the abutting land. Where accretion builds up in an irregular pattern over the lands of several adjacent property owners, courts determine title to it by (i) extending each owner's property line out into the water, or (ii) dividing up the newly formed land in proportion to the owners' interests in the adjoining lands. When a watercourse or body of water forms the boundary of a parcel of real property, the legal boundary line is NOT changed by a sudden change in the watercourse. When a river or stream serves as a boundary, the sudden, perceptible change of the watercourse—i.e., avulsion—does not change property rights. The boundaries remain where they were, even if this results in a landowner who had river access finding himself landlocked. When a watercourse or body of water forms the boundary of a parcel of real property, the legal boundary line is NOT changed by the encroachment of the body of water. When property is encroached upon by a body of water (e.g., a lake enlarges), previously fixed boundary lines do not change and ownership rights are not affected. The boundary lines can be proven even if the land is completely under water. When a watercourse or body of water forms the boundary of a parcel of real property, the legal boundary line CAN be changed by movement of the water alone. Through accretion or erosion, discussed above, a slow, imperceptible change in a watercourse will extend or retract the property line.

A recording act that provides: "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded," is a __________.

notice statute A recording act that provides: "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded," is a notice statute. Under a notice statute, a later purchaser of land will prevail over an earlier grantee if she takes without actual or constructive (e.g., record) notice of the earlier grant. The above language is not a race-notice statute. An example of a race-notice statute is: "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded." Under a race-notice statute, a later purchaser will prevail over an earlier grantee only if she takes without actual or constructive (e.g., record) notice of the earlier grant and records before he does. The above language is not a pure race statute. An example of a pure race statute is: "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser whose conveyance is first recorded." Under a race statute, notice is irrelevant. The first party to record, regardless of the date of her conveyance, wins. The Statute of Frauds is not a recording act. Every conveyance of an interest in land with a duration long enough to bring into play a particular state's Statute of Frauds (typically one year) must be evidenced by a writing, signed by the party to be charged.

Parol evidence generally will not be admitted to show __________.

oral conditions on the delivery of a deed given to a grantee Parol evidence generally will not be admitted to show oral conditions on the delivery of a deed given to a grantee. In most jurisdictions, parol evidence is not admissible to show that a facially unconditional deed given directly to a grantee was in fact subject to a condition. The condition will be ignored. This is not the case when the deed is deposited with an escrow. Parol evidence generally will be admitted to show oral conditions on the delivery of a deed placed in escrow. A grantor may deliver a deed by giving it to a third party (i.e., an escrow) who is instructed to give it to the grantee. Parol evidence generally is admissible to show the conditions and terms on which the deed was placed in escrow, even though the deed itself is unconditional. This is not the case when the deed is given directly to a grantee. Parol evidence generally will be admitted to show that a grantor did not intend to deliver a deed. Delivery requires that the grantor intend the deed to have a present operative effect. Parol evidence is admissible to prove that the grantor lacked this intent. Note that courts will allow such evidence to show that no delivery was intended, but will not allow it to show that delivery was conditional. Parol evidence always will be admitted to show that a deed was intended only as security for an obligation. If a court concludes by clear and convincing evidence that a deed was really given for security purposes, it will treat the transaction as an equitable mortgage. An equitable mortgage may be evidenced by: (i) the grantor's debt; (ii) the grantee's promise to return the land if the debt is paid; (iii) the amount advanced to the grantor being much lower than the property value; (iv) the degree of the grantor's financial distress; and (v) the parties' prior negotiations.