Grace purchases a home in Union County, New Jersey, using a bargain and sale deed with covenants against grantor's acts. Three years later, she discovers that a contractor had recorded a mechanic's lien against the property before the previous owner (the grantor) acquired title. The lien was never disclosed. Under New Jersey law, which of the following BEST describes Grace's legal position?

Correct Answer

D) Grace has no warranty recourse against the grantor because the lien arose before the grantor's period of ownership, outside the scope of the covenant

A bargain and sale deed with covenants against grantor's acts in New Jersey only warrants title against encumbrances or defects created by or through the grantor during the grantor's period of ownership. Since the mechanic's lien was recorded before the grantor acquired the property, it falls outside the scope of the grantor's covenant. Grace cannot rely on the deed's covenant to seek recourse against the grantor for this pre-existing lien. This is a key limitation of this deed type compared to a general warranty deed.