32.2 Deeds, Delivery, Title Covenants & Transfers at Death
Key Takeaways
- A deed must be in writing, signed by the grantor, identify the parties, contain words of conveyance, and describe the land adequately; consideration, the grantee's signature, and recording are not required for the deed to be valid between the parties.
- A deed transfers title only when delivered with the grantor's present intent to make it operative; handing a deed to the grantee with an oral condition usually makes the delivery absolute, while a deed placed in escrow can be conditioned on a later event.
- A forged deed or a deed never delivered is void and passes nothing even to a bona fide purchaser, while a deed induced by fraud, duress, or undue influence is voidable and can pass good title to a later bona fide purchaser.
- A general warranty deed contains present covenants of seisin, right to convey, and against encumbrances, which are breached if at all at delivery, and future covenants of quiet enjoyment, warranty, and further assurances, which are breached by later interference and run to successors.
- When land passes at death, a specific devise of land the testator no longer owns adeems, most states no longer exonerate mortgages, a devise to a beneficiary who dies first lapses unless an anti-lapse statute substitutes the beneficiary's descendants, and many states permit transfer-on-death deeds.
32.2 Deeds, Delivery, Title Covenants & Transfers at Death
Title usually passes during life by deed and at death by will or intestacy. For a deed, first confirm the formalities, delivery, and validity of the instrument, and then determine what title covenants, if any, the grantor made.
Deed Formalities & Execution Requirements
To effectively convey legal title to real property, a deed must satisfy five basic formal requirements:
┌────────────────────────────────────────────────────────────────────────────┐
│ ESSENTIAL FORMALITIES OF A VALID DEED │
├─────────────────────────────────────┬──────────────────────────────────────┤
│ 1. Writing │ Must be written; satisfies SoF │
├─────────────────────────────────────┼──────────────────────────────────────┤
│ 2. Identifiable Parties │ Identifies competent Grantor and │
│ │ identifiable Grantee │
├─────────────────────────────────────┼──────────────────────────────────────┤
│ 3. Words of Conveyance │ Operative words of grant (e.g., │
│ │ 'conveys', 'grants', 'transfers') │
├─────────────────────────────────────┼──────────────────────────────────────┤
│ 4. Unambiguous Land Description │ Provides a 'good lead' to locate the │
│ │ exact boundaries of the parcel │
├─────────────────────────────────────┼──────────────────────────────────────┤
│ 5. Signature of Grantor │ Signed by grantor (Grantee signature │
│ │ is NOT required!) │
└─────────────────────────────────────┴──────────────────────────────────────┘
Critical Testing Distinctions Regarding Formalities
- No Consideration Required: A deed is an executed conveyance, not an executory contract. A grantor can validly gift real property. The complete absence of consideration does not affect the validity of a deed.
- Grantee in Blank: If a deed delivers with the grantee's name omitted in blank:
- If the grantor gave the recipient express or implied authority to fill in the grantee's name, the deed becomes fully valid once the name is inserted.
- If the name is never filled in before delivery, the deed is void.
- Deed to a Deceased Grantee: A deed that names a deceased individual as grantee is void ab initio because there is no living person capable of taking title.
- Description of Land: Extrinsic (parol) evidence is admissible to resolve a latent ambiguity (e.g., "my farmhouse in Springfield" when grantor owns only one farmhouse in that city). However, if the description is totally indefinite or contains a patent defect that cannot be cured (e.g., "one acre of my 100-acre farm"), the deed is void for uncertainty.
Delivery and Acceptance
Title does not pass until the deed is delivered by the grantor and accepted by the grantee.
THE DELIVERY TEST
│
▼
┌──────────────────────────────────────────────────┐
│ Did the Grantor have the PRESENT INTENT to │
│ immediately transfer legal title to the Grantee? │
└────────────────────────┬─────────────────────────┘
│
┌───────────────────┴───────────────────┐
▼ ▼
YES NO
│ │
VALID LEGAL DELIVERY DEED IS VOID
(Title passes immediately; (No title passes;
Grantor cannot revoke) Grantor remains owner)
1. The Legal Standard of Delivery
- Present Intent Governs: Delivery does not require physical, manual transfer of the parchment. The sole legal inquiry is whether the grantor exhibited a present intent to part with legal control and immediately vest title in the grantee.
- Rebuttable Presumptions:
- Presumption of Delivery: Arises if the deed is physically handed to the grantee, or if the deed is formally recorded in the county registry.
- Presumption of Non-Delivery: Arises if the grantor executes a deed but retains physical possession in their private desk, safe, or lockbox.
2. Conditional Delivery Directly to Grantee vs. Escrow
This is one of the highest-frequency testing traps on the MBE:
- Delivery to Grantee with Oral Condition (ABSOLUTE DELIVERY): If a grantor physically hands a valid deed directly to the grantee, but orally states a condition (e.g., "Take this deed, but you only own the house if you survive me" or "...if you marry my son"), the oral condition is VOID as a matter of law, and the delivery is ABSOLUTE. Title vests immediately in the grantee unconditionally. Parol evidence is inadmissible to contradict the absolute written terms of the deed.
- Delivery to a Neutral Third Party (Escrow): A grantor may validly attach conditions to delivery by depositing the deed with an independent third-party escrow agent with written instructions (e.g., deliver to Grantee upon payment of $100,000, or upon Grantor's death).
- Death Escrow: A grantor deposits a deed with an escrow agent instructing: "Deliver to Grantee upon my death." If the grantor retains no right to recall or revoke the deed, this creates a valid present transfer in which the grantor keeps a life estate and the grantee receives a vested remainder.
- The Relation-Back Doctrine: Once the condition is satisfied, title relates back to the date the deed was originally deposited into escrow. Courts apply this doctrine when needed to avoid injustice, such as when the grantor dies or becomes incompetent before the condition occurs; many courts will not apply it against an intervening bona fide purchaser or creditor who lacked notice.
3. Acceptance
Acceptance by the grantee is legally required to complete the transfer, but acceptance is presumed if the conveyance is beneficial to the grantee (which is virtually always the case unless the grantee expressly rejects it).
Types of Deeds & Warranties of Title
There are three primary categories of deeds utilized in property conveyances, distinguished entirely by the scope of title warranties they contain.
TYPES OF DEEDS
│
┌────────────────────────────────┼────────────────────────────────┐
▼ ▼ ▼
┌──────────────────┐ ┌──────────────────┐ ┌──────────────────┐
│ GENERAL WARRANTY │ │ SPECIAL WARRANTY │ │ QUITCLAIM │
│Six full covenants│ │Warrants against │ │Zero covenants │
│covering entire │ │defects arising │ │Conveys only what │
│chain of title │ │DURING grantor's │ │grantor owns │
│ │ │ownership ONLY │ │ │
└──────────────────┘ └──────────────────┘ └──────────────────┘
1. General Warranty Deed: The Six Covenants of Title
A General Warranty Deed warrants against all defects in title, regardless of whether the defect was created by the immediate grantor or by a distant predecessor in the chain of title. It contains six distinct covenants:
A. Present Covenants (Breached, if at all, AT DELIVERY)
Present covenants are breached, if ever, at the exact instant the deed is delivered. The statute of limitations begins running on the date of closing. Crucially, under the common law majority rule, present covenants do NOT run with the land and cannot be enforced by a remote subsequent purchaser.
- Covenant of Seisin: Grantor promises that they legally own the exact estate and quantity of land they purport to convey.
- Covenant of Right to Convey: Grantor promises that they possess the legal power, authority, and capacity to transfer the estate.
- Covenant Against Encumbrances: Grantor promises that the property is unburdened by any physical or financial encumbrances (e.g., mortgages, liens, easements, restrictive covenants) not expressly excepted in the deed.
B. Future Covenants (Breached Upon ACTUAL INTERFERENCE)
Future covenants are not breached at delivery. They are breached only when the grantee's quiet possession is actually or constructively disturbed by a third party asserting lawful superior title. The statute of limitations begins running only when the eviction/disturbance occurs. Crucially, future covenants RUN WITH THE LAND to all remote subsequent grantees.
- Covenant of Quiet Enjoyment: Grantor promises that the grantee will not be disturbed in possession or evicted by a third party with lawful superior title.
- Covenant of Warranty: Grantor promises to defend the grantee against lawful third-party claims of superior title and to compensate the grantee for any financial loss resulting from superior title.
- Covenant of Further Assurances: Grantor promises to execute any subsequent documents (e.g., corrective deeds, release of liens) necessary to perfect the grantee's title.
2. Special Warranty Deed
A Special Warranty Deed (similar to a grant deed or a bargain and sale deed with covenants against the grantor's acts in some states) contains the same covenants as a general warranty deed, but with one vital limitation: the grantor warrants ONLY against title defects and encumbrances created by, through, or under the grantor. The grantor makes no warranties regarding defects created by prior predecessors.
3. Quitclaim Deed
A Quitclaim Deed contains no covenants of title whatsoever. The grantor conveys whatever legal or equitable interest they currently possess—which may be fee simple absolute or absolutely nothing. The grantee takes the property at their own peril and has zero recourse against the grantor under the deed if title fails entirely.
More on Deeds
Persons Authorized to Convey
- Agents: An agent may sign a deed for the grantor, but many states require that an agent's authority to convey land be in writing.
- Entities and fiduciaries: Corporations and limited liability companies convey through authorized officers or managers. Trustees convey within the powers the trust gives them, and guardians or conservators often need court approval.
- Minors and incompetent persons: A deed by a minor is voidable. A deed by a person who has been judicially declared incompetent is void in many states; a deed by a person who is incompetent but not so declared is usually voidable.
- Spouses: Homestead and marital property statutes in many states require both spouses to sign a deed to certain property, such as the family home.
Void and Voidable Deeds
| Void Deeds (Pass No Title, Even to a Bona Fide Purchaser) | Voidable Deeds (A Later Bona Fide Purchaser Can Take Good Title) |
|---|---|
| Forged deeds | Deeds induced by fraud about the deal, such as lies about the land's value |
| Deeds never delivered, including stolen deeds | Deeds obtained by duress or undue influence |
| Deeds obtained by fraud in the execution, where the grantor did not know she was signing a deed | Deeds by minors or by incompetent persons not judicially declared incompetent |
| Deeds to a grantee who does not exist, such as a person who has died | Deeds made in breach of a fiduciary duty |
Descriptions and Boundaries
- Conflicting description elements: When parts of a description conflict, courts generally prefer natural monuments, then artificial monuments, then directions, then distances, and finally the stated area.
- Roads and streams: A deed to land bordering a road or a non-navigable stream presumptively conveys to the center line if the grantor owns that far.
- Construction: Courts construe ambiguous deeds against the grantor and may reform a deed that does not reflect the parties' agreement because of mutual mistake.
- Water boundaries: When a river gradually shifts (accretion), the boundary moves with it; when it suddenly changes course (avulsion), the boundary stays where it was.
Damages for Breach of Title Covenants
- Seisin and right to convey: The grantee may recover the purchase price paid, or a proportionate share for a partial failure of title, usually with interest.
- Against encumbrances: For an encumbrance the grantee can remove, such as a mortgage, the grantee recovers the reasonable cost of removal up to the purchase price. For an encumbrance that cannot be removed, such as an easement, the grantee recovers the resulting reduction in the land's value.
- Warranty and quiet enjoyment: An evicted grantee may recover the value lost, commonly limited to the price the covenantor received, plus the costs of defending title if the grantee notified the covenantor and asked it to defend.
- Minority views: Some states treat the covenant of seisin or against encumbrances as running with the land to later owners.
Transfers at Death
Intestacy and Wills
- Intestacy: Land owned by a person who dies without a will passes to heirs under the intestacy law of the state where the land is located, subject to the estate's debts and administration.
- Wills: A will must meet the formalities required by law. Because a will transfers nothing until death, a deed intended to take effect only at the grantor's death is testamentary and invalid unless it meets those formalities. A grantor can accomplish a similar result by delivering a deed that reserves a life estate or by using a death escrow.
Common Problems with Devises of Land
| Doctrine | Traditional Rule | Modern Variations |
|---|---|---|
| Ademption by extinction | A specific devise of land fails if the land is not in the estate at death | The Uniform Probate Code gives the devisee certain replacement property and unpaid sale proceeds, condemnation awards, or insurance proceeds |
| Exoneration | A devisee of mortgaged land may require the estate to pay off the mortgage | Most states and the Uniform Probate Code pass the land subject to the mortgage unless the will specifically directs payment; a general direction to pay debts is not enough |
| Lapse | A devise to a beneficiary who dies before the testator fails and passes under the residuary clause or by intestacy | Anti-lapse statutes give the devise to the predeceased beneficiary's descendants if the beneficiary was a relative covered by the statute |
| Survivorship language | In most states, an express survivorship condition ("if she survives me") prevents the anti-lapse statute from applying | The Uniform Probate Code treats survivorship words alone as insufficient to override the statute |
- Abatement: When estate assets cannot pay all debts and gifts, gifts are usually reduced in this order: property passing by intestacy, the residuary gift, general gifts, and finally specific gifts.
- Transfer-on-death deeds: Many states, often through the Uniform Real Property Transfer on Death Act, allow an owner to record a deed naming a beneficiary who takes the land at the owner's death without probate. The deed must be recorded before the owner dies, can be revoked, requires no delivery or consideration, and passes the land subject to existing liens.
An elderly landowner owned a 40-acre farm in fee simple. Wishing to provide for his daughter, the landowner executed a valid warranty deed naming his daughter as grantee. He handed the deed directly to his daughter and said, 'The farm is yours now, but this deed is good only if you outlive me.' The daughter placed the deed in her safety deposit box without recording it. One year later, after a falling out with his daughter, the landowner executed a second deed conveying the same farm to his son as a gift, and the son immediately recorded it. The landowner then died. The daughter and the son each claim sole ownership of the farm. Who owns the farm?
Grantor conveyed Blackacre to Buyer 1 by a general warranty deed. At the time of the conveyance, Blackacre was burdened by an outstanding, valid $50,000 recorded mortgage held by a commercial bank, which Grantor failed to disclose or satisfy. Two years later, Buyer 1 conveyed Blackacre to Buyer 2 by a quitclaim deed. One year after taking title, Buyer 2 learned of the $50,000 mortgage. The bank had made no demand for payment, threatened no foreclosure, and taken no legal action. Buyer 2 immediately initiated an action against Grantor (the original grantor) for breach of the covenant against encumbrances and the covenant of quiet enjoyment. What is the proper resolution of Buyer 2's lawsuit against Grantor?
An owner's nephew forged the owner's signature on a deed conveying the owner's lake cottage to the nephew and recorded it. The nephew then sold the cottage to a buyer who paid fair value, had no notice of the forgery, and recorded her deed. In an unrelated transaction, a con artist persuaded a widow to sign and deliver a deed to her farm by lying about the farm's value, and then sold the farm to a purchaser who paid value without notice of the fraud. The owner and the widow each sue to recover their land. What is the likely result?
A testator's will left 'my house on Elm Street to my sister' and the residue of her estate to a charity. The sister died before the testator and was survived by a son. Two years before her own death, the testator also sold a lake lot that her will left 'to my friend,' and she used the proceeds to buy stock. The jurisdiction's anti-lapse statute applies to devises to the testator's siblings, and the jurisdiction follows the traditional rule on ademption. Who takes the Elm Street house, and what does the friend receive?