hard · National Real Estate Exam transfer-title
A deed states the consideration as "$10 and other good and valuable consideration." In the same instrument the grantor warrants that the property is free of all encumbrances. After closing, the grantee discovers a recorded utility easement that predates the deed and was visible on the ground. The grantee sues on the covenant against encumbrances.
Which analysis is correct?
- The covenant against encumbrances is breached the moment the deed is delivered if the easement exists, regardless of the grantee's notice, though damages may be nominal if value is unaffected
- The covenant is not breached because a recorded, visible easement is excepted by operation of law from any general warranty
- The covenant is unenforceable because the recited '$10 and other valuable consideration' fails to state real consideration and voids the warranties
- The covenant runs with the land as a future covenant, so the claim does not accrue until the utility actually interferes with the grantee's use
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