The Various Covenants of a Deed - dummies

The Various Covenants of a Deed

By Alan R. Romero

Grantors typically make broad promises about the quality of title — warranties — and then customize those promises by making exceptions for title defects that they anticipate or already know about. All title defects can be grouped into two categories:

  • Possessory interests belonging to other people

  • Nonpossessory interests belonging to other people

Different covenants address these two categories. Some covenants promise that no such defects exist; others promise that no one else will assert such rights. In all, grantors commonly include six title covenants in their deeds.

Covenants of seisin and right to convey

The covenant of seisin is essentially a covenant that the grantor owns the estate that the deed says it conveys to the grantee. This covenant promises that no one else has any conflicting possessory interests, present or future. If someone else owns some part of the described land, that would violate the covenant of seisin.

Likewise, if a deed says it conveys a fee simple absolute, but someone else owns a future interest in the property, that future interest would violate the covenant.

The covenant of right to convey is similar. As the name suggests, it’s a promise that the grantor has the right to convey the described estate. Obviously, if the grantor doesn’t own all of the described estate, then she doesn’t have the right to convey it all.

In general, the same title defects breach both the covenants of seisin and right to convey. But in some situations, the grantor has seisin but not the right to convey, such as when the property is subject to a valid covenant preventing the grantor from conveying the property to the grantee.

On the other hand, the grantor may have the right to convey but not seisin, such as when the grantor is acting as an agent for the owner.

Covenant against encumbrances

An encumbrance is any title problem that isn’t a lack of title that would breach the covenants of seisin and right to convey. Mortgages, liens, easements, and covenants are all encumbrances. The covenant against encumbrances is a covenant against encumbrances. It’s a promise that no such interests encumber the property.

Of course, few properties are unencumbered, so a grantor would almost certainly not promise that the property is free from encumbrances. Rather, the deed would say that the grantor covenants that there are no encumbrances except for certain specified encumbrances, which the deed then proceeds to name.

The deed may do so specifically, as in “subject to an easement in favor of Utility Company.” Or it may do so generally, as in “subject to easements, covenants, and other interests of record.”

In some situations an encumbrance doesn’t violate the covenant even though the deed doesn’t exclude it from the covenant. Here are some of those situations:

  • The grantee knew of the encumbrance. If the grantee knew about an encumbrance when the grantor gave her the deed, some courts would hold that the encumbrance doesn’t violate the covenant, even if the deed doesn’t say that the encumbrance is an exception to the covenant.

    However, most courts would say that the deed covenant means what it says and that the grantee’s knowledge of an encumbrance doesn’t negate the grantor’s covenant to pay damages for the existence of the encumbrance.

  • The encumbrance was visible. Courts commonly hold that an encumbrance that’s open and visible, like an easement for a public street, doesn’t violate the covenant against encumbrances, even though the encumbrance isn’t mentioned as an exception.

    Such decisions reason that the grantee must have intended to accept the property subject to such encumbrances, or she wouldn’t have gone forward with the purchase. But the lawyer drafting a deed should be explicit about which encumbrances the grantor doesn’t covenant against.

  • The encumbrance is beneficial. Some courts have held that encumbrances that make the property more valuable, like utility easements, don’t breach the covenant against encumbrances. They figure that the covenant was meant only to protect the grantee from harm resulting from title defects, so if an encumbrance actually benefits the grantee, it doesn’t breach the covenant.

  • Code violations exist. Some cases have held that existing violations of local building, housing, and zoning codes may breach the covenant against encumbrances. However, most courts agree that such violations don’t violate the covenant because they don’t affect title to the property at all.

Covenants of quiet enjoyment and warranty

Like the covenants of seisin and right to convey, the covenants of quiet enjoyment and warranty go together because they’re essentially the same. But why make only one covenant when two will do the job just as well?

  • Covenant of quiet enjoyment: A covenant that the grantee can use and enjoy the property without interference by the legal claims of other people who have valid interests in the property

  • Covenant of warranty: A covenant that the grantor will warrant and defend the grantee’s title against the legal claims of other people who have valid interests in the property

Both covenants promise that other interest holders won’t interfere with the grantee’s use and enjoyment. Such interference may result from a possessory interest, like someone else actually owning title to some portion of the land the deed purported to convey, or a nonpossessory interest, like an easement or covenant. In either case, if the owner of such an interest interferes with the grantee’s use of the property, the covenants are breached.

Covenant of further assurances

The covenant of further assurances is a promise that, upon demand by the grantee, the grantor will execute any additional documents in the future that are needed to fix any defects in the grantee’s title. This covenant applies only when the grantor himself has the power to fix a title defect.