Unit 2: Legal Issues
I. The Nature and Purpose of a Deed
A Deed is a written legal document by which ownership (title) of real estate is conveyed from one party to another. While the "Title" is an abstract concept of ownership, the "Deed" is the physical paper that proves it.
Essential Elements of a Valid Deed:
Grantor: The person selling or giving the property. Must be of sound mind and at least 18 years old.
Grantee: The person receiving the property. Must be identifiable (needs a name and address).
Act of Conveyance (Granting Clause): Words that state the grantor’s intent to transfer the property (e.g., "does hereby grant and release").
Consideration: Something of value (usually money) given in exchange. In many deeds, this is listed as "$10.00 and other valuable consideration."
Legal Description: A specific description of the land. In NY, we use three main types:
Metes and Bounds: Starts at a "point of beginning" and uses distances and directions.
Monuments: Uses physical markers (rocks, trees, streams).
Lot and Block: Used in subdivisions (referencing a plat map).
Habendum Clause: Follows the granting clause and defines the extent of ownership (begins with the words "To have and to hold").
Subject-to Clause: Lists any encumbrances, easements, or restrictions that "run with the land."
Signature of the Grantor: Only the grantor is required to sign the deed.
Delivery and Acceptance: Title does not transfer until the deed is voluntarily delivered by the grantor and accepted by the grantee.
II. Common Types of Deeds
Different deeds provide different levels of protection to the buyer (grantee).
Full Covenant and Warranty Deed: The "Gold Standard." It provides the greatest protection. It includes:
Covenant of Seizin: Grantor guarantees they own the property.
Covenant Against Encumbrances: Guarantees no hidden liens.
Quiet Enjoyment: Guarantees no one with a superior title will kick the buyer out.
Further Assurance: Grantor will provide any documents needed to fix title issues.
Warranty Forever: Grantor will defend the title against all claims.
Bargain and Sale Deed (with Covenants): Most common in Downstate NY. The grantor only warrants that they have not done anything to encumber the property while they owned it.
Quitclaim Deed: Provides the least protection. It conveys only what interest the grantor might have. Commonly used to clear "clouds on title" or in divorce settlements.
Executor’s Deed: Used to convey property of a person who died with a will (Testate).
Referee’s Deed: Used in foreclosure auctions or partition sales.
III. Conveyance After Death
When a property owner dies, the transfer of their real estate is governed by whether they had a valid will.
1. If the owner dies TESTATE (With a Will):
Probate: The legal process of proving the will in Surrogate's Court.
Executor/Executrix: The person named in the will to carry out its terms.
Devise: The gift of real property by will.
Devisee: The person receiving the real property.
2. If the owner dies INTESTATE (Without a Will):
Administration: The court process for estates without a will.
Administrator: The person appointed by the court to handle the estate.
Title by Descent: The transfer of property to Heirs based on NY state law (EPTL 4-1.1).
Escheat: If no heirs can be found, the property reverts to New York State.
⚠️ EXAM ALERT: QUICK FACTS
Acknowledgment: This is a formal declaration before a Notary Public. In NY, a deed must be acknowledged to be recorded, even though an unrecorded deed may still be valid between the parties.
Recording: Recording a deed provides Constructive Notice to the world of your ownership. The recording fee and transfer tax are paid at the County Clerk's office.
Lien Law Section 13: Every NY deed must contain a "Lien Covenant," stating the grantor will hold the sales proceeds as a trust fund to pay for any improvements made to the property first.
Intestate Successors: In NY, if you die without a will and have a spouse and children, the spouse gets the first $50,000 plus 50% of the balance, and the children split the rest.
KEY TERMS
Accession: The acquisition of title to real or personal property by its joining or being added to property already owned.
Accretion: The gradual increase of land through the natural action of water (such as the deposit of soil), which becomes the property of the landowner.
Acknowledgement: A formal declaration made before a public officer (usually a notary public) by a person who has signed a document, stating that the signing was a free and voluntary act.
Adverse Possession: A method of acquiring title to real property by possession for a statutory period (10 years in New York) under certain conditions, such as being open, notorious, and hostile to the owner's interest.
Alluvion: The actual soil or silt increase deposited by the natural action of water through accretion.
Avulsion: The sudden and perceptible loss of land or change in its configuration, typically caused by a natural event like a flood or a change in the course of a river.
Bargain and Sale Deed: A deed that carries with it no warranties against liens or other encumbrances but does imply that the grantor has the right to convey title.
Consideration: Something of value given by one party in exchange for the promise or act of another; it is an essential element of a valid deed.
Conveyance: The legal process of transferring an interest in real property from one person or entity to another by way of a written instrument, such as a deed.
Dedication/Dedication by Deed: The voluntary transfer of private property by its owner to the public for some public use, such as for streets or parks.
Delivery and Acceptance: The final step in a real estate transfer; the deed must be delivered by the grantor and accepted by the grantee to be effective.
Description: The legal identification of a specific parcel of land, often using systems like metes and bounds or lot and block.
Executor: A person appointed in a will to carry out the instructions and requests of the deceased person and to manage their estate.
Full Covenant and Warranty Deed: Considered the "best" deed for a buyer, it contains the strongest guarantees of title, where the grantor warrants the title against defects existing before and during their ownership.
Grantee/Grantor: The Grantor is the person conveying the title; the Grantee is the person receiving the title.
Habendum Clause: The part of a deed beginning with the words "to have and to hold," which defines the extent of the ownership being granted (e.g., fee simple or life estate).
Involuntary/Voluntary Alienation: Voluntary Alienation is the transfer of title by a gift or sale with the owner's consent; Involuntary Alienation is the transfer of title without the owner's consent (e.g., foreclosure or eminent domain).
Land Patent: The legal document used by the government to transfer ownership of public lands to an individual.
Lot and Block: A method of legal description that identifies a parcel of land by reference to a recorded plat map filed in the public records.
Metes and Bounds: A method of legal description that identifies the boundaries of a parcel of real estate by tracing its perimeter using terminal points and angles.
Public Grant: A transfer of title to real property from the government to a private individual.
Quitclaim Deed: A deed that conveys only whatever interest the grantor may have in the property at the time, without any warranties or even the implication that the grantor has any interest at all.
Referee's Deed: A deed used to convey title to property sold by court order, such as in a foreclosure sale or a partition proceeding.
Reference to a Plat: A method used in legal descriptions to identify a property by referring to a recorded subdivision map (plat).
Survey: The process by which boundaries are measured and land areas are determined; the resulting map shows the location of the land and any improvements or encroachments.
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