Question

To avoid liability arising out of the implied covenants in a grant deed, the deed needs to state what? These conditions are or are not agreed to by the buyer in the purchase agreement.

a) All the encumbrances
b) All the warranties
c) All the conditions
d) All the terms

Answer 1

To avoid liability from implied covenants in a grant deed, the deed must state all the encumbrances. These include restrictive covenants and may be accepted by the buyer in the purchase agreement.

Step-by-step explanation:

To avoid liability arising out of the implied covenants in a grant deed, the deed needs to explicitly state all the encumbrances. Encumbrances can include liens, easements, or other burdens on the property. By fully disclosing these in the deed, a seller provides clear notice to the buyer, who may then agree to accept the property subject to these conditions in the purchase agreement.

Restrictive covenants are a type of encumbrance that can limit use of the property, such as by setting building aesthetic guidelines or prohibiting certain activities. In historical contexts, restrictive covenants have been used discriminately to control the geographic distribution of various ethnic groups, a practice now declared unconstitutional and illegal.

Keep in mind that some states have statutes regarding the disclaimer or limitation of warranties, which may affect the ability to waive certain covenants or obligations in a deed.