Section III Real Estate Contracts and Agency

Deeds & Conveyances

Scenario: Maria buys a property from John. John signs a deed transferring ownership but does not guarantee the title is clear.

Question: What type of deed did John most likely use, and what risk does Maria face?

Hint: Think “no promises about title quality.”

2. Title & Legal vs. Equitable Title

Scenario: A buyer has signed a contract and paid a deposit, but the deed hasn’t been delivered yet. Who has legal title and who has equitable title?

Hint: One title is recognized in court as ownership; the other is “beneficial interest.”

3. Encumbrances

Scenario: Alice buys a house, but a neighbor’s fence is partly on her land. What type of encumbrance might this be, and how could it affect her ownership?

Hint: Think about physical intrusions on property.

4. Easements

Scenario: A utility company has the right to run power lines through your backyard. You want to build a shed in that area.

Question: What legal concept allows the utility company to maintain this right, and can you stop them?

Hint: Rights someone else has on your property.

5. Liens

Scenario: Tom owes property taxes, and the city places a lien on his house. He wants to sell it.

Question: How does the lien affect the sale?

Hint: Think “claim against property for debt.”

6. Joint Ownership

Scenario: Two sisters buy a property together as tenants in common. One sister dies without a will. Who inherits her share?

Hint: Tenants in common vs. joint tenancy with right of survivorship.

7. Condemnation

Scenario: A city wants to widen a road that runs past David’s house. They offer him compensation for part of his land.

Question: What process is being used, and what rights does David have?

Hint: Government takes private property for public use.

8. Fee Simple Estate

Scenario: Emily buys a property with no restrictions on ownership, and she can sell or will it to anyone.

Question: What type of estate does she hold?

Hint: The “fullest” form of ownership.

9. Consideration

Scenario: James sells his car for $1 to his neighbor to help him out. What legal element is still present in this sale?

Hint: Something of value exchanged for a contract.

10. Quitclaim Deed

Scenario: Karen wants to clear a cloud on her property title caused by an old family claim. She asks her cousin to sign a document transferring any interest they might have.

Question: What type of deed is this, and does Karen get a guarantee of clear title?

Hint: “Transfers whatever interest exists—no promises.”