REAL PROPERTY - TITLES QUESTION-

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espressounius

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REAL PROPERTY - TITLES QUESTION-

Postby espressounius » Wed Jun 13, 2018 8:49 am

I am hoping that there is a kind-hearted, compassionate Real Property Afficionado out there who can help me with this type of question.


This fact pattern shows up a lot , and confuses me :

"O gives Blackacre to A with a quitclaim deed; for $300,000. A does not record. But lives on the property, improves the property bla bla.

Turns out, O did not have good title yet when he gave to A; because turns out he is a donee benny whose deed is being held in trust by his grandfather's lawyer.

Grandfather dies. Atty delivers the warranty deed to O.

O now owns Blackacrre in fee simple.

O is a jerk, or very forgetful, AND he now conveys Blackacre to B for $800,000. What can A do?"

Because A got with a quitclaim deed, I always tend analyze that he cannot bring a claim based on any warranties of title. But neither does A prevail over B, who is a Bona Fide Purchaser. So, what are A's options? Can he sue for what he paid + what improvements he made ?

Thank you kindly.

Nightcrawler

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Re: REAL PROPERTY - TITLES QUESTION-

Postby Nightcrawler » Wed Jun 13, 2018 11:02 am

Under the after-acquired title doctrine, O will be held as having conveyed good title to the first purchaser. So generally, O doesn't own the land anymore. The dispute is between A and B. I guess that the determining factor in that case would be whether B is a BFP or not (and the relevant recording statute).

albanach

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Re: REAL PROPERTY - TITLES QUESTION-

Postby albanach » Wed Jun 13, 2018 11:08 am

espressounius wrote:I am hoping that there is a kind-hearted, compassionate Real Property Afficionado out there who can help me with this type of question.


This fact pattern shows up a lot , and confuses me :

"O gives Blackacre to A with a quitclaim deed; for $300,000. A does not record. But lives on the property, improves the property bla bla.

Turns out, O did not have good title yet when he gave to A; because turns out he is a donee benny whose deed is being held in trust by his grandfather's lawyer.

Grandfather dies. Atty delivers the warranty deed to O.

O now owns Blackacrre in fee simple.

O is a jerk, or very forgetful, AND he now conveys Blackacre to B for $800,000. What can A do?"

Because A got with a quitclaim deed, I always tend analyze that he cannot bring a claim based on any warranties of title. But neither does A prevail over B, who is a Bona Fide Purchaser. So, what are A's options? Can he sue for what he paid + what improvements he made ?

Thank you kindly.


If O has a future interest in Blackacre, wouldn't it have been conveyed with the quitclaim? If O had no interest, then there was nothing to transfer, but your fact pattern looks like O did have an interest to transfer.

FinallyPassedTheBar

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Re: REAL PROPERTY - TITLES QUESTION-

Postby FinallyPassedTheBar » Wed Jun 13, 2018 11:52 am

I am tempted to say A has good title under the doctrine of after acquired title. But because of the quitclaim deed from O to A, I am going to say A has nothing and that A has no recourse against O nor B. I am not positive of my answer though.

espressounius

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Re: REAL PROPERTY - TITLES QUESTION-

Postby espressounius » Wed Jun 13, 2018 12:57 pm

albanach wrote:
espressounius wrote:I am hoping that there is a kind-hearted, compassionate Real Property Afficionado out there who can help me with this type of question.


This fact pattern shows up a lot , and confuses me :

"O gives Blackacre to A with a quitclaim deed; for $300,000. A does not record. But lives on the property, improves the property bla bla.

Turns out, O did not have good title yet when he gave to A; because turns out he is a donee benny of Blackacre whose deed is being held in trust by his grandfather's lawyer.

Grandfather dies. Atty delivers the warranty deed to O.

O now owns Blackacrre in fee simple.

O is a jerk, or very forgetful, AND he now conveys Blackacre to B for $800,000. What can A do?"

Because A got with a quitclaim deed, I always tend analyze that he cannot bring a claim based on any warranties of title. But neither does A prevail over B, who is a Bona Fide Purchaser. So, what are A's options? Can he sue for what he paid + what improvements he made ?

Thank you kindly.


If O has a future interest in Blackacre, wouldn't it have been conveyed with the quitclaim? If O had no interest, then there was nothing to transfer, but your fact pattern looks like O did have an interest to transfer.


Hi Thanks for your response.

O's grandfather told him he is giving him Blackacre as a birthday present when he reaches 21 and has completed undergrad; but that the deed will be held in trust for him in his attorney's possession before.

When O grants Blackacre with a quitclaim to A; O has, say a life estate, or a leasehold; but he mistakenly thinks that Blackacre belongs to him in fee simple. He conveys quitclaim to A this way; A does not record. Later; when attorney delivers the deed upon O reaching 21 and graduating, O now has fee simple. He sells Blackacre for a much higher value to BFP, B. O skips town. What does A do?

albanach

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Re: REAL PROPERTY - TITLES QUESTION-

Postby albanach » Wed Jun 13, 2018 1:11 pm

espressounius wrote:When O grants Blackacre with a quitclaim to A; O has, say a life estate, or a leasehold; but he mistakenly thinks that Blackacre belongs to him in fee simple. He conveys quitclaim to A this way; A does not record. Later; when attorney delivers the deed upon O reaching 21 and graduating, O now has fee simple. He sells Blackacre for a much higher value to BFP, B. O skips town. What does A do?


So I think A gets good title either way.

A quitclaim deed transfers O's entire interest at the time of the transfer. So, if there was any valid future interest, I think that transfers too.

If there was no valid future interest, or if the interest did not transfer then, as nightcrawler points out, the after-acquired doctrine kicks in. That doctrine applies to quitclaim deeds that conveyed title in FSA.

estefanchanning

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Re: REAL PROPERTY - TITLES QUESTION-

Postby estefanchanning » Wed Jun 13, 2018 1:38 pm

If O conveys property she doesn't own to A by quitclaim deed, but O later acquires title to that land, then A owns nothing. This is because O passed her interest to A with a quitclaim deed; at the time of the conveyance, O's interest was nothing, so she passed nothing. A has no recourse, and estoppel by deed is never implicated.

Estoppel by deed prevent a grantor from denying the truth of the deed. Here, the truth of the quitclaim deed was nothing, no interest.

estefanchanning

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Re: REAL PROPERTY - TITLES QUESTION-

Postby estefanchanning » Wed Jun 13, 2018 1:42 pm

Also, a bigger issue is that A didn't record. Even if O conveyed to A title in fee simple, the fact that A did not record will foreclose her from asserting ownership rights. This is because B only has to search as far back in the records registry as the person he's purchasing from (here, it's O). So even the most detailed searched by B would never uncover A's "interest" (this is assuming B is a SBFP)

A can argue B was on inquiry notice since A was actually living on the property (and thereby vitiating SBFP status), but your hypo doesn't give enough facts.

albanach

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Re: REAL PROPERTY - TITLES QUESTION-

Postby albanach » Wed Jun 13, 2018 4:05 pm

estefanchanning wrote:Also, a bigger issue is that A didn't record.


But we don't know what kind of recording statute Blackacre's state uses. If it's notice-based, we know A is living there and has made improvements. Failure to record may not be fatal.

estefanchanning

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Re: REAL PROPERTY - TITLES QUESTION-

Postby estefanchanning » Wed Jun 13, 2018 4:08 pm

albanach wrote:
estefanchanning wrote:Also, a bigger issue is that A didn't record.


But we don't know what kind of recording statute Blackacre's state uses. If it's notice-based, we know A is living there and has made improvements. Failure to record may not be fatal.


Yes I mentioned that in my answer. The reason I'm not sure is because OP said "A is living there...bla bla." So idk if OP threw in those facts or those were the actual facts of the question.

espressounius

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Re: REAL PROPERTY - TITLES QUESTION-

Postby espressounius » Thu Jun 14, 2018 1:07 am

estefanchanning wrote:
albanach wrote:
estefanchanning wrote:Also, a bigger issue is that A didn't record.


But we don't know what kind of recording statute Blackacre's state uses. If it's notice-based, we know A is living there and has made improvements. Failure to record may not be fatal.


Yes I mentioned that in my answer. The reason I'm not sure is because OP said "A is living there...bla bla." So idk if OP threw in those facts or those were the actual facts of the question.


I certainly threw in those facts. I apologize that my hypo is definitely missing facts about the recording statute and is leaving open the question to what extent B can be imputed with notice of A's possession.

I think what I was testing myself to understand with this hypo (and I am sincerely grateful for all who have helped me figure this out) was what happens in the event that there is a quitclaim deed and estoppel by deed cannot be implicated; but that same land is later granted with a general warranty deed to someone else. Whenever this happens; ALL kinds of theories ricochet around in my head like : 1)adverse possesion?? 2)after acquired title?? etc.

It is just counter-intuitive to me (but it does not seem to be to Bar examiners) that someone be living on their land for a while that they had a quitclaim deed for, but the grantor later grants the same land to someone else before dissappearing. I now understand that here is what I should be looking out for :

1) Is B a BFP?
-Can B imputed with notice of A's ownership?
- If not, then the land is B's.
-A has no recourse to either O or B.

2) After-acquired title depends. Not enough facts in this hypo - ? WHY?
- By the same logic that estoppel by deed does not apply, after acquired title would not apply if A got quitclaim when O in fact did not own. When O did own, he sold to a BFP, who is B.
a) IS B a BFP?
- In this case, the "after acquired title" ness depends on the question of what is B aware of before closing? Can B be imputed with ANY notice at all?
- IF B CAN BE IMPUTED WITH ANY NOTICE, HE IS NOT A BFP --- > SO A has after acquired title . (is this correct?)
- IF B CANNOT BE IMPUTED WITH NOTICE, HE IS IN FACT BFP --- > SO B has title by general warranty deed.

3) Estoppel by deed does not apply to quitclaim deeds.
- It just doesnt... Suck it up espressounius (me)

espressounius

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Re: REAL PROPERTY - TITLES QUESTION-

Postby espressounius » Thu Jun 14, 2018 1:11 am

albanach wrote:
estefanchanning wrote:Also, a bigger issue is that A didn't record.


But we don't know what kind of recording statute Blackacre's state uses. If it's notice-based, we know A is living there and has made improvements. Failure to record may not be fatal.


Thank you albanach! Please see my response below. My hypo is not that great and is certainly ambiguous on some key issues!

estefanchanning

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Re: REAL PROPERTY - TITLES QUESTION-

Postby estefanchanning » Thu Jun 14, 2018 1:21 am

After acquired title and estoppel by deed are the same thing. They're synonyms for each other. The reason that estoppel by deed doesn't apply to quitclaim:

When you convey a quitclaim deed, you are basically saying "I will vacate the property and you can now live here. But I don't make any promises as to whether my interest is valid sooo kthxbai." For that reason, quitclaim deeds are mostly used between family members or by adverse possessors. You don't see a quitclaim deed being "sold" to someone, and if it is, the price of the property would be substantially less than FMV to reflect lack of covenants.

O cannot be "estopped" by A because A got the full interest she bargained for in the quitclaim deed because quitclaim deeds come with no warranties.

Dw686

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Re: REAL PROPERTY - TITLES QUESTION-

Postby Dw686 » Thu Jun 14, 2018 2:42 am

Sadly you are being led down the wrong path. Because the grandfather is holding the interest in trust and because O could die tomorrow and the grandfather could live over 21 yrs after, that entire conveyance violates the rule against perpetuities. Therefore, the grandfather still owned the land and given he is now dead, it will be distributed through his estate.

espressounius

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Re: REAL PROPERTY - TITLES QUESTION-

Postby espressounius » Thu Jun 14, 2018 3:11 am

Dw686 wrote:Sadly you are being led down the wrong path. Because the grandfather is holding the interest in trust and because O could die tomorrow and the grandfather could live over 21 yrs after, that entire conveyance violates the rule against perpetuities. Therefore, the grandfather still owned the land and given he is now dead, it will be distributed through his estate.


Yeah ? Thanks that's very helpful! - sarcastic-



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