Question

For example, when grantee is taking title subject to encumbrances placed on property by seller, grant deed needs to state the property is "subject to" encumbrances of record, and list each of these encumbrances.

a) True
b) False

Answer 1

The statement is true; a grant deed must state any encumbrances on the property to inform the grantee about existing legal obligations.

Step-by-step explanation:

The direct answer to whether a grant deed needs to state the property is "subject to" encumbrances of record is True. When a grantee is taking title subject to encumbrances placed on the property by the seller, it is necessary for the grant deed to list those encumbrances. This ensures that the grantee is aware of any legal responsibilities or limitations associated with the property. Encumbrances can include liens, easements, or restrictive covenants that affect the property's use.

An accurate property title is vital in real estate transactions such as when farmers might sell their land for development due to increasing expenses and decreasing profits in agriculture. Understanding the specifications on the deed helps both parties avoid disputes and legal complications post-sale. This protects both parties and prevents any potential disputes or misunderstandings in the future regarding the encumbrances on the property.