21. Deeds

Question 1

What is the purpose of a deed?

Answer 1

Transfers title (by law) to a party interested in real property after the land sale contract

Question 2

What is required for a deed?

Answer 2

1) Writing (SOF)

2) Signed by Grantor (SOF)
- NOT Grantee (NOT necessary)

3) Description
- Parties (reasonable description) (otherwise delivering party presumed to fill in missing party’s name)
- Land (unambiguous description) (otherwise VOID)

Question 3

Is consideration required for deeds?

Answer 3

NO

Question 4

What is the difference between deeds and land sale contracts?

Answer 4

Deed
- Signed by Grantor

Land sale contract
- Signed by Grantee

Question 5

When may defective deeds be void?

Answer 5

Forgery

NOT delivered

NOT issued to existing Grantee
- Including dead persons

Question 6

When may defective deeds be voidable?

Answer 6

Grantor’s lack of capacity

• Minor
• Incapacitated

Duress/Undue influence

Mistake

Fraud in the inducement (Grantor’s creditors will set aside)

• Grantor’s intent to hinder/delay/defraud his creditors
• NO reasonable equivalent value in exchange for transfer + Debtor is insolvent

Breach of fiduciary duty

Question 7

How may defective deeds be set aside?

Answer 7

Void
- Court will set aside (even if delivered to BFP)

Voidable

• If NOT delivered to BFP => Court/Grantor’s creditors will set aside
• If delivered to BFP => NOT set aside

Question 8

How may land description issues in deeds be resolved?

Answer 8

Parol evidence
- Resolve patent/latent ambiguities

Reformation
- Resolve mistake (bilateral/unilateral)

Question 9

What documents must be provided at closing?

Answer 9

Closing disclosure (Lender => Debtor)

• At least 3 business days before closing
• Details (Principal + Interest; Closing costs; Potential surprises to Debtor)
• Otherwise Debtor can cancel mortgage + recover damages

Notification of defects (Seller => Buyer)

• At closing
• Seller’s knowledge of potential defects
• Otherwise Seller liable for defects

Environmental report (Seller + Buyer)
- Identify environmental guarantees by Seller (to avoid guarantee compliance with all environmental laws)

Question 10

What is the difference between deeds and charitable trusts in terms of the parties’ identities?

Answer 10

Deeds
- Must be ascertained

Charitable trust
- Must NOT be ascertained