The Closing – controlling document is
the deed (passes legal title from S to B)
- How does the deed pass legal title from seller to buyer? It must be Lawfully Executed and Delivered (LEAD).
- Lawful execution of a deed – must be in writing and signed by grantor. (note: deed need not recite consideration, nor must consideration pass to make deed valid)
- Land description does not have to be perfect. The law requires an unambiguous description and a good lead. (EX: “All of O’s land in Essex Co.” = OK because with research we can discern what all land is; “Some of O’s land in Sussex Co” = NOT OK, because even with some research, we couldn’t know what “some” means)
- Delivery requirement – satisfied when grantor physically or manually transfers deed to grantee. It is permissible to use the mail, an agent, or a messenger. HOWEVER, delivery does not necessarily require actual physical transfer of the instrument itself.
- Standard for delivery is a legal standard, and is a test solely of present intent. Ask: Did grantor have the present intent to be immediately bound irrespective of whether or not the deed itself was literally handed over?
- When recipient expressly rejects the deed, delivery is defeated.
- If a deed, absolute on its face, is transferred to grantee with an oral condition: the oral condition drops out—it is not provable and delivery is accomplished.
- EX: O conveys a deed to Blackacre that is absolute on its face, but says to grantee, “Blackacre is yours only if you survive me.” The oral condition is void. Delivery is done.
- Delivery by escrow = OK. Grantor may deliver an executed deed to a third party (escrow agent) with instructs that the deed be delivered to grantee once certain conditions are met. And once those conditions are met, the title passes automatically to grantee.
- Advantage of escrow à If grantor dies or becomes incompetent or is otherwise unavailable before the express conditions are met, title still passes from escrow to grantee once the conditions are met.