Property: Deeds

A document containing words of transfer, including warranties of title.
- These tend to be very long.
- Many states have statutorily shortened them
- Signed, sealed, and delivered"
- Deeds have had to be signed since the 1677 Statute of Frauds
- Deeds no longer need to be sealed.
* A forged deed is void: the grantor whose signature is forged prevails over all persons, including subsequent bona fide purchasers from the grantee who does not know the deed is forged.
* A deed procured by fraud and subsequently sold - Subsequent bona fide purchaser prevails
- In a dispute between two innocent parties, the law places the loss on the person who could have prevented the loss to the other - in this case, the person who was defrauded is "more at fault" than the one who innocently purchased the title

Rule: A covenant of quiet enjoyment can be breached by constructive eviction, but unless the covenantee's right to possession is interfered with, there is no constructive eviction, and, therefore, no breach of the covenant.
* The covenant of quiet enjoyment can only be breached by disturbing the covenantee's right of possession. - no one was on the property attempting to extract minerals yet
- Mere existence of a paramount title does not constitute a breach of the covenant if the possession and enjoyment of the premises has been unhindered.
* You cannot adversely possess minerals by taking the surface but you can have something open, notoriously, or histily extracting the minerals and be adversely possessed.

Rule: A latent violation of a restrictive land use statute does not constitute a violation of the warranty against encumbrances.
* The warranty against encumbrances may not be used to cure violations of a restrictive land use statute.
- This isn't an encumbrance period, it is an environmental statute. Not something you would find in a title search. Even if it has been violated it is not an encumbrance because (not something you'd find in a title record) and is more like a building code violation. Uncertainty of title.

1. A pecuniary charge against the premises, such as mortgages, judgment liens, tax liens, or assessments
2. Estates or interest in the property less than the fee, like leases, life estates, or dower rights
3. Easements or servitudes on the land, such as rights of way, restrictive covenants and profits

Rule: Conditional delivery to a grantee vests absolute title in the grantee. The court found that John intended to give the property to Maurice, that he delivered the title, and the Maurice accepted by continuing to operate the tavern.
*Some jurisdictions follow the rule in Sweeney, some find these types of grants are testamentary and therefore invalid (made in lieu of a will; not to take effect until after death), and some ruling as to the intention of the parties.
*Intent overwhelms delivery
*To be effective, a deed must be delivered with the intent that it be presently operative
Escrow Agent - one who holds both the payment and the deed, and delivers both to the appropriate party once both are delivered to him.

1. INTENT
2. Delivery
3. Acceptance

Rule: Where a grantor delivers a deed but retains a right of retrieval and states that the deed is operative only after the grantor's death, the delivery is not legally sufficient.
* Delivery requires a present intent to pass title, even though possession may be postponed. Legal delivery requires the conference of ownership.
They should have just put it in a will.
*Similar to Sweeney b/c they continued to use the land.

Holding: Court tells the couple if they wanted to leave it to the nephew that they should have put it in a will or a revocable trust.
a. Trust - divides the title into equitable title and legal title.
b. Legal Title - Trustee
c. Equitable Title - Beneficiary
d. Revocable Trust - Trustee is holding the legal title, but the equitable title is in someone else (or somebody's).
e. Concurrent Interest - two people having interests at the same time in the same property.

- Note: legal document that captures the information of the debt.
- Mortgage: provides the property interest as security
- Deed of Trust: deed being held by a third party. Same as a mortgage - like holding your car title
- Title/Lien
a. Title Theory of Mortgages - The lender has the title to the property
b. Lien Theory of Mortgages (Majority Jurisdiction) - The title is in the buyer, but there is a lien (security interest) that will be paid out of the value of the property.

Rule: A mortgagee executing a power of sale has a duty to protect the interests of the mortgagor and exercise good faith and due diligence in obtaining a fair price for a mortgagor's property. (Fiduciary duty)
-Uniform Land Transaction Act: Act produced by the National Conference of Commissioners of Uniform State Laws. (No State has adopted this)
**Requirement that the sale be conducted in a reasonable manner, including the advertising aspects, requires that the person conducting the sale use the ordinary methods of making buyers aware that are used when an owner is voluntarily selling his land.
• Not just legal notices in newspaper.
• List the property with a realtor.
The lender has this duty b/c they have superior knowledge.

*Contract for Deed is a mortgage.
- When a buyer defaults on an installment land sale contract, his or her payments are not forfeited as long as he or she has already paid a substantial amount on the contract.
- Seller has the legal title to the property and money already paid.
- Buyer has an equitable title (equitable lien in the property).

1. Chain of title
2. Puts subsequent purchaser on notice (world then has knowledge)

Rule: Instruments recorded with "Mother Hubbard" clauses are valid with regard to the parties to it, but do not provide constructive notice for subsequent purchasers.

Notice:
1. Actual: it happened
a. Record - (you can have actual knowledge because you did a search and saw something - you could see a defective deed that would give you state of the title)
b. Non-record (somebody told you that the person you're buying form doesn't own the property)
2. Constructive: law says it happened
a. Record - if you had looked in accordance with what your jurisdiction defines as a title search, you would have found the record
b. Inquiry - you know something that doesn't tell you what the title is/who owns it but gives you enough information to signify that you should go do some more checking (i.e. drive by a house that has two stories in a neighborhood that only has one story homes)

Rule: Requiring a title searcher to examine title records for other spellings of the grantor's name would be an undue burden on the transfer of property.
- Court rejects idem sonas - they should have spelt the name correctly in the first place (malpractice suit)

"Having the same sound"; Term given to doctrine that states though a person's name has been inaccurately written, the person's identity will be presumed from the similarity of pronunciation between the correct and incorrect spellings of the person's name.
- Usually doesn't apply to names with different first letters (i.e. Cain and Kane)

1. The person who wins the race by recording the deed wins
2. Actual notice is irrelevant. It's all about the race.
Only 2 or 3 states do this.
*won't be on exam

1. When you record is irrelevant. If you are a subsequent BFP and don't have notice, you win.
2. Subsequent purchasers do not have to record to win.

Subsequent purchaser needs to be without notice AND the first to record.
*You are only entitled to be in the race if you are a bona fide purchaser without notice

1. buy blackacre for value
2. without notice that someone else got there first
*Recording acts don't protect donee or devisees (one who receives a gift of the property and one who receives the property through inheritance)

1. The recorded sequence of transactions by which title had passed from sovereign to present claimant
2. All documents that would be picked up by properly done title search in a given jurisdiction

An instrument that is not properly acknowledged is not entitled to be recorded and does not give notice.
Rules:
1. Proper procedure for a notary is needed, can't do it over the phone.
2. If the requirements of the statute are not followed, then the document is not entitled to be recorded.
- Not going to get the benefits of the recording statute for a document not entitled to be recorded even though it was there.
- This document not entitled to be recorded would give the opposing side actual notice, not just constructive notice. Then they can't be a bona fide purchaser.

Rule: A deed from a grantor outside the chain of title, even if recorded, is treated as though it were unrecorded and gives no constructive notice.
*It doesn't matter what kind of deed it is for notice purposes - the buyer is not put on notice by the deed alone.
*In order to be the first to record and benefit from the recording act, your entire chain must be recorded.

Deed that gets recorded late that would produce a complete chain of title. And unless that complete chain of title is recorded (alternate chain of title). The entire chain has to be recorded to defeat a subsequent purchaser.

Courts are split on:
IF YOU BUY A LOT IN A SUBDIVISION YOU HAVE CONSTRUCTIVE NOTICE OF EVERY DEED FROM THE DEVELOPER FOR THAT SUBDIVISION - OF ANY RESTRICTIONS THAT THAT COMMON GRANTOR PUT IN ANY OF THE DEEDS
Half jurisdictions disagree about whether you need to search all the deeds from a common grantor (aka say it depends on the jurisdiction)/there's a split about whether you have to search all the deeds from the common grantor.

If you have a deed that refers to some other instrument that is lost, you have constructive inquiry notice of that other instrument.
*Inquiry notice (duty to ask questions and find out) can defeat a subsequent purchaser

Actual possession of the property gives you constructive inquiry notice - you are required to check what interests those possessors have
BUT
Just because you have an inquiry notice doesn't mean that you lose. The court could find that you reasonably investigated that no one else has an interest in the property.
ON EXAM Say in this situation the subsequent purchasers has inquiry notice and might not prevail under the recording statute