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FIN3351_Ch.3_Notes

FIN3351_Ch.3_Notes - Chapter 3 Conveying Real Property...

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Chapter 3: Conveying Real Property Interests I. Introduction o Reasons for Complexity in Conveying Real Estate Real property is a complex bundle of rights Rights to land are enduring - rights available today depend on transactions long ago Land is a continuous surface – boundaries not obvious or natural, and boundary errors always hurt someone II. Deeds – a special form of written contract used to convey a permanent interest in real property (ex: fee simple absolute, life estates, easements, conditional fees, oil/mineral/water rights.) o Requirements of a Deed All deeds contain a number of elements: Grantor (w/signature) and grantee Grantor – the person or entity conveying the real property interest Grantee – the recipient Recital of consideration Words of conveyance Serve 2 main purposes: (1) assure that the grantor clearly intends to convey an interest in real property, (2) indicate the type of deed offered by the grantor. Covenants – legally binding promises for which the grantor becomes liable; if promises are false, grantee can sue for damages 3 normal covenants: 1. Covenant of seizin – a promise that the grantor truly has good title and the right to convey it 2. Covenant against encumbrances – a promise that the property is not encumbered with liens, easements, or other such limitations except as noted in the deed. 3. Covenant of quiet enjoyment – a promise that the property will not be claimed by someone with a better claim to title. Habendum clause – defines or limits the type of interest being conveyed Exceptions and reservations clause – can contain a wide variety of limits on the property interest conveyed.
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