Developer ABC Corp. sells a lot in a new Tampa subdivision to the Johnsons using a general warranty deed. Two years later, the city discovers that ABC Corp. never properly acquired title to a 10-foot strip along the rear of the lot from the previous owner. The city threatens to take action against the Johnsons. What recourse do the Johnsons have?
Correct Answer
B) They can sue ABC Corp. for breach of the covenant of seisin and covenant against encumbrances
ABC Corp. breached the covenant of seisin (warranting they owned what they conveyed) and potentially the covenant against encumbrances by conveying property they didn't fully own. The Johnsons can sue for breach of these warranties. Buyers are entitled to rely on warranty deed covenants. Quitclaiming back to ABC Corp. wouldn't solve the title problem. Damages aren't limited to the original purchase price and may include current value and costs.
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What is the main difference between a general warranty deed and a special warranty deed in Florida?
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Lisa receives a deed to property in Gainesville but discovers it was signed by someone who forged the true owner's signature. She records the deed and sells the property to Mike, who has no knowledge of the forgery and pays fair market value. What is Mike's legal position?