Deed Covenants of Title and the Preparation of Deeds: Theory, Law, and Practice in Arkansas

By Lynn Foster and J. Cliff McKinney, II | 34 U. ARK. LITTLE ROCK L. REV. 53 (2011).

Deed covenants for title are still an important part of real estate law today.  American common law recognizes six covenants of title that must be expressed in a deed to be enforced:  the covenants of seisin, the right to convey, against encumbrances, quiet enjoyment, general warranty, and further assurances.  This article discusses the treatment of these covenants in Arkansas case law, including the measure of damages and the issue of attorney’s fees, in breach of deed covenant cases.  Special considerations regarding mineral rights are also discussed.  The article explores the differences among the three types of deeds: general warranty, special warranty, and quitclaim.   The authors discuss the nature of warranties that are supplied by Arkansas statutory law when the phrase “grant, bargain, and sell” is included in deed, noting that these do not exactly coincided with the six warranties of common law.  The authors studied more than 300 deeds to determine what Arkansas practitioners are really doing when it comes to preparing deeds.

Typical title commitments used in Arkansas contain “standard exceptions.”  These “standard exceptions” leave the buyer with no coverage for some breaches of warranty of title.   In these situations, buyers must rely on the deed covenants as their only remedy.   Sophisticated sellers will often insist on deed language that incorporates all matters listed as exceptions to the title policy.  However, none of the deeds in the sample that the authors looked at contained these exceptions, although a majority (67.8%) did contain some express exception to the covenants of title.  The authors conclude that this practice leaves the grantor exposed to several common legal problems, including issues related to the conveyance of mineral rights, encumbrances, and boundary line disputes.

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