Real Property: Land Conveyancing: The Closing: Covenants for title and the 3 types of deed

Covenants for title and the 3 types of deed:
  • Quitclaim [worst deed a buyer could hope for] –contains no covenants. The grantor isn’t even promising that he has title to convey.
    • Grantor did implicitly promise in the land contract to provide marketable title at the closing, but such a promise is a time-limited promise. The seller is off the hook for any problems that arise post-closing.
  • General warranty deed [best deed a buyer could hope for] – warrants against all defects in title including those attributable to grantor’s predecessors. Typically contains 6 covenants (3 present covenants and 3 future covenants).
    • Present covenants: breached, if ever, at the time deed is delivered. Thus, statute of limitations for breach of a present covenant begins running from the instant of delivery.
      • Covenant of seisin – grantor promises he owns the estate he know purports to convey
      • Covenant of right to convey – grantor promises he has the power to make this transfer. There are no temporary restraints or restrictions against a grantor’s power to sell.
      • Covenant against encumbrances – grantor promises that there are no servitudes or mortgages on the land.
    • Future covenants: a future covenant is not breached, if ever, until grantee is disturbed in possession. Thus, statute of limitations for breach of future covenant will not begin to run until that future date.
      • Covenant for quiet enjoyment – grantor promises that grantee will not be disturbed in possession by a third party’s lawful claim of title.
      • Covenant of warranty – grantor promises to defend grantee should there be any lawful claims of title brought by others.
      • Covenant for further assurances – grantor promises to do whatever future act/acts are necessary to perfect the grantee’s title if it later turns out to be imperfect.
  • Statutory special warranty deed: Deed provided for by statute; contains two promises that grantor makes only on behalf of himself. (Note: Grantor makes no representations on behalf of his predecessors in interest.)
    • Grantor promises that he hasn’t conveyed this estate to anyone other than grantee, and
    • Grantor promises that the estate is free from encumbrances made by grantor.