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Episode Transcript

Constructive Delivery
Episode 40: October 27, 2007

Hello, and welcome to Legal Lad’s Quick and Dirty Tips for a More Lawful Life.

But first, a disclaimer: Although I am an attorney, the legal information in this podcast is not intended to be a substitute for seeking personalized legal advice from an attorney licensed to practice in your jurisdiction. Further, I do not intend to create an attorney-client relationship with any listener.

Today’s topic is constructive delivery. Maria wrote:

Last week, I signed up with a rental agency to help me find an apartment. I found a great place and told the rental agent that I wanted it. The agency approved me, and gave me the lease to sign, which I did. I gave the lease back to the agency to get the owner to sign. The owner signed it and gave it back to the rental agency, but the agency never gave it back to me. The bottom of the lease said that the lease was not effective until the signed lease was “delivered” to me by the owner, and that the owner could still find other renters between the time he signed it and “delivered” it.

After he signed the lease, the owner found a family friend that wanted to live in the apartment, and told the agency not to give the lease to me. Now, he will not honor my lease because the rental agency never gave the signed lease back to me. The owner says that he never “delivered” the lease because he only gave it back to the rental agency, but not to me. Is this fair?

Maria has effectively asked whether the act of handing the signed lease back to the rental agency constitutes “delivery” under the law. The short answer to your question is that what the owner is doing is not only unfair, but violates the terms of the contract. When the owner signed the lease and gave it back to the rental agent for the purpose of giving it back to you, the owner delivered the lease and the contract became binding on both of you.

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Back to the issue.

Delivery of documents under the law can be either actual or constructive. Actual delivery is easy to spot; it occurs when someone physically hands you a document with the intent to hand it over. So, if the owner had signed the lease and handed it back to Maria, then actual delivery would have taken place, and the lease would have become immediately effective.

But under the law of most states, delivery is not confined to physically handing something over. Rather, delivery is a question of intent. Constructive delivery occurs when a person shows a present intent to unconditionally divest himself of his property, and to relinquish all control over it. When the owner signed the document and gave it to the rental agency with the intent that the agency would pass it along to Maria, the owner constructively delivered the leasehold interest to Maria. After the lease was constructively delivered, the condition that the lease would only become effective upon “delivery” was fulfilled. The moment the owner handed that lease to the agency, the lease became effective. Maria’s lease is valid, and the owner is stuck with Maria as a tenant for as long as the lease term runs.

Constructive delivery is an important concept in land transfers. To effectively convey a grant of land, aka real property, most states require that the deed must be “delivered.” But, delivery in this context can also be actual or constructive, and the intent of the parties will control.

This issue often comes up in disputes over wills. Imagine the following scenario: Dad wants his ranch to go to his daughter, but wants to live there until he dies. So, Dad executes a deed in favor of the daughter and puts it in his safety deposit box with instructions to give the deed to the daughter when he dies. After he dies, the family finds a will that gives all his property to the local church. The question becomes whether Dad delivered the deed to the daughter when he executed it, but only put it in his safety deposit box instead of giving it to her.

A court looking at this case would not focus on the time at which the deed was physically given to the daughter. The court would focus on what Dad intended when he wrote and signed the deed, and put it in his safety deposit box. Most courts looking at this situation would agree that Dad constructively delivered the deed to his daughter when he signed it and put it away for safekeeping.

This is different from the situation where Dad simply promises to give his property away at a later date. In that situation, a court would not find any constructive delivery of a deed because Dad did not exhibit the intent to presently give away his property. He only exhibited a future intent to do so, which cannot constitute constructive delivery.

In Maria’s situation, the owner exhibited a present intent to give away the leasehold interest in the apartment, and thus delivery occurred. The owner might argue that the delivery was not valid because he changed his mind, and so his signature was only conditional. Most courts would reject this argument because once the owner signed the lease, he gave up the leasehold interest. It was no longer his to place any conditions on. If he wanted to condition his signature, he should have done so expressly.

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Comments (1) for Constructive Delivery | Subscribe to Comment

legallayman Says:
9/12/2008 11:39:13 AM

Response to "Constructive Delivery" of lease or deed. Not to be too offensive but are you really a licensed attorney? I agree with your statement that Delivery is a fact issue of "intent" but disagree that physical control of the instrument is not also required. Not discussed but also required is the act of acceptance - in contract law and conveyance of title via a written deed. Your analysis of the case discussed and the hypothetical example are both incorrect. In fact your hypothetical example is the actual subject of multiple case laws in multiple states - for example a case in Texas where a father properly executed a deed to his daughter and where he was on his way in a car to deliver the deed to his daughter and where he undisputedly intended to deliver the deed to his daughter - but - prior to delivery died - the Texas Supreme Court found that delivery was not sufficient and voided the deed filed by the daughter, who found the deed in the trunk of the father's car, and remanded to have title vest in the father's estate per his will which left the land equally to his daughter and son. Or even more on point would be several cases in Alabama and Georgia where a father properly executed a deed and gave it to his agent or attorney for "safekeeping" or placed the deed in his bank's vault and in all cases the deeds were found void for ineffective delivery. Proper delivery of a deed from the grantor to the grantee is an essential element of its effectiveness. In addition, the grantor must make some statement or perform some act that implies his or her intention to transfer title. Both physical act and intent must occur to constitute delivery as it is insufficient for a grantor to have the mere intention to transfer title, in the absence of further conduct that consummates the purpose. There is no particular prescribed act, method, or ceremony required for delivery, and it is unnecessary that express words be employed or used in a specified manner. The deed need not be physically delivered to the grantee or his or her agent. It is sufficient to mail a deed to the grantee. Delivery of the deed to the grantee by the agent or attorney who has written the instrument for the grantor is also adequate. Unless otherwise provided by statute, a deed becomes effective upon its delivery date. However, the mere fact that the grantee has physical possession of the deed does not constitute delivery, unless it was so intended by the grantor and the intent of the grantor’s agent or attorney is ineffective to the intent of the grantor. A deed must be accepted by the grantee in order for proper transfer of title to land to be accomplished. Acceptance by the grantee can only occur after delivery by the grantor. There are no fixed principles regarding what acts are sufficient to effect acceptance, since the issue is largely dependent upon the grantee’s intent. Acceptance of a deed need not be made by express words or in writing, absent a contrary statutory provision. A deed is ordinarily accepted when the grantee retains it upon delivery from the grantor or obtains a mortgage on the property at issue.