CHAPTER 3 A REVIEW OF BASIC LAWS GOVERNING TITLE TO REAL PROPERTY AND LOCAL RECORDING SYSTEMS, AND THEIR IMPACT ON MINERAL TITLE EXAMINATION
| Jurisdiction | United States |
(Sep 2007)
A REVIEW OF BASIC LAWS GOVERNING TITLE TO REAL PROPERTY AND LOCAL RECORDING SYSTEMS, AND THEIR IMPACT ON MINERAL TITLE EXAMINATION
Attorney
Elias, Books, Brown & Nelson
Oklahoma City, Oklahoma
Timothy C. Dowd is an attorney with Elias, Books, Brown & Nelson, P.C., in Oklahoma City, Oklahoma. Mr. Dowd's primary area of practice is oil and gas law, including the rendering of title opinions, litigation and the drafting and negotiations of industry contracts for over 25 years. Mr. Dowd is a past President of the Oklahoma City Mineral Lawyers Society and former Chairperson of the Oklahoma Bar Association Mineral Law Section. Mr. Dowd is also the author of the chapter on Oil and Gas Titles in West Publishing Company's Oklahoma Real Estate Forms and Practice. Mr. Dowd is a member of the Oklahoma Bar Association, the Mineral Law Section, as well as a member of the Oklahoma City Mineral Lawyers Society and Oklahoma City Real Property Lawyers. Mr. Dowd has written numerous articles for publication including: Oklahoma Oil and Gas Title Law - A Review of Fifty Common Title Issues, Landman, Nov. 2007; Preferential Rights to Purchase in Oil and Gas Package Sales, 77 Okla. B. J. 2459 (September 2, 2006); Preferential Rights to Purchase in Oil and Gas Transactions, 49 Rocky Mountain Mineral Law Institute (2003); Due Diligence and Title Considerations When Purchasing Property in Oklahoma, Oil, Gas and Energy Resources Law Section Report of State Bar of Texas, Vol. 27, No. 2 (December 2002); A Comparative Review of Oil and Gas Law in Texas, Oklahoma, Arkansas, New Mexico, Mississippi & Louisiana, Landman (November/December 2002); Common Title Issues: An Oklahoma Perspective, Landman (September/October 1999)
A. CONVEYANCES
The greatest volume of records that make up a chain of title are the voluntary transfers that individuals and business entities make. Conveyances include all instruments that have the effect of passing a present interest in property.2
The provisions that are usually recited as being the essential elements of a conveyance are the following:
1) Parties, e.g. grantor and grantee;
2) Words of grant;
3) Description of premises; and
4) Signature of the party to be bound.3
Some states also require attestation seal and an acknowledgement for a conveyance to be legally effective.4 However, in most states, an acknowledgement is a prerequisite for recording, but is not essential for the validity of a conveyance of the parties.5
While most real estate professionals tend to use standard forms for transactions, legally, any writing suffices to transfer title as long as it contains the essential elements of a conveyance,6 and does not violate the state's rule against perpetuities.7
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1. Deeds
Though a deed may contain many other clauses, generally, the only requirements are a) words of grant, b) parties to the grant, c) description of the premises, and d) signature of the party to be charged.8 Although acknowledgments are requirements for a deed to be recorded, they are not generally essential for the validity of the conveyance.9
Two other elements that are mentioned to be essential are delivery and acceptance.
Although the intention of the parties to a deed will be given effect if this can be done consistently with the rules of law, generally, the operation of a deed on the legal title is governed by law and is not controlled by such intention. The courts keep in mind, however, the primary purpose and effect of a deed is to transfer title to real property, or the incidents flowing from title, or some right, such as possession, which depends on title.10
A complete and delivered deed has the effect of transferring the grantor's title, or so much thereof, as the deed purports to convey, to the grantee, and divesting the grantor thereof. The grantor may, of course, convey whatever part of his interest in land he chooses to convey where no principle of law prevents him from doing so.11
The question of the operation of a deed executed by a grantor having an undivided fractional interest in a tract of land to convey all or part of his fractional is, in the main, a question of the grantor's intention as determined from the deed, and if that is ambiguous, from surrounding facts and circumstances. In a number of cases where the grant purports to be of a designated undivided fractional part or interest in the property, the grant has been enlarged to cover the grantor's entire fractional interest therein where the deed contains a further clause indicating this to be his intent.12
There are numerous types of deeds. However, the three most common deeds are a) the Warranty Deed, b) the Quit Claim Deed, and c) the Special Warranty Deed.
A Warranty Deed containing warranties of title, is generally considered (a) to convey to the grantee the whole interest of the grantor, (b) to be deemed a covenant at the time of making the deed that the grantor is legally seized of an indefeasible estate in fee simple of the premises, (c) that the grantor has good right and full power to convey the same, (d) that the premises are free and clear of all encumbrances and liens, (e) that the grantor warrants to the grantee, his heirs and assigns, quiet and peaceable possession of the property, (f) that the grantor will defend the title against all person who may lawfully claim the same, and (g) the covenants and warranty shall be binding upon the grantor, his heirs and personal representatives as if written at length in the deed.
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Under a Warranty Deed, the important element to title examiners is that the deed has the effect of passing to the grantee a title subsequently acquired by the grantor. A grantor who executes a deed purporting to convey to which he has no title or to which he has a defective title at the time of the conveyance will not be permitted, when he afterward acquires good title to the land, to claim in opposition to his deed as against the grantee or any person claiming title under him. This is known as the Doctrine of After Acquired Title.13
A Quit Claim Deed is typically used where the grantor intends to convey only such interest as he has. Further, in a Quit Claim Deed, the grantor does not warrant title. A Quit Claim Deed is effectual to convey whatever interest the grantor has in the subject of the deed as any other form of conveyance.14
A Special Warranty Deed, sometimes referred to as a Limited Warranty Deed, warrants title against any lien imposed against the grantor or any defect arising out of anything done or not done by the grantor. The warranty of title in a Special Warranty Deed does not extend to any defect in the title which existed before the grantor received title to the property, to stray instruments, or to any claims arising which are not based on any action or default of the grantor.
Mineral Deeds are commonly used to convey all or a fractional interest in the minerals. They are designed to only convey an interest in the minerals and not impact the title to any surface of the conveyed tract.
a. Granting words
The words of grant are the most important part of the deed in construing the deed. Although other clauses may be used in determining the intent of the parties, these clauses will not be given effect if they are repugnant to the grant.15 There are no magic words to the transfer of a property interest, but the words used must show a present intent to convey title.16
b. Parties
Traditionally, all persons intending to convey their interest in a deed must be listed in the granting clause. It is not enough for the party to sign a deed.17 It is insufficient for a wife to convey her homestead interest in a piece of property by signing a deed that lists only the husband as grantor,18 or by releasing her dower or homestead right.19 However, many
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jurisdictions have done away with this rule completely,20 while others will give effect to a deed where the grantor is not specifically named as grantor, as long as they are identified.21
A grantor in a deed must be of the age of majority and mentally competent to execute a deed. Generally, a deed executed by a minor is voidable,22 even as to subsequent innocent purchasers,23 which means that it is good unless and until the grantor repudiates his grant. A deed executed by a person who is mentally incompetent at the time of grant is voidable if that person is not under a guardianship,24 and void if that person is under a guardianship.25 A grant by a mentally incompetent person not under a guardianship cannot be disaffirmed as to a purchaser who did not have notice of person's mental state.26 If the records show a person to be mentally incompetent prior to a deed executed by that person, the grantor is presumed to have been mentally incompetent at the time of the grant.27
A deed executed by a record title owner under a different name than the record shows is effective as a conveyance, but creates unmarketable title. Where a woman's name changes because of marriage, a recitation in the deed that she is the same person will suffice for marketable title. In the case of any other name changes, including corporations, separate evidence showing the legal validity of the name change is required.28
Of course, any valid deed must have a grantee. The proper name of the grantee, however, is not required as long as the identity of the grantee can be ascertained with reasonable certainty.29 A deed to the "heirs",30 "trustees",31 or "children"32 of an identified person have been held to be sufficient, as long as they are living or in existence. Where a father and son have the same name, and the deed does not identify which is the grantee, the presumption is that the father is the grantee.33 A grantee must be a person or legal entity in existence at the time of grant.
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Grants to unborn, deceased, and fictitious persons, as well as...
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