Chapter 1 Unit 10

Warrant of further assurance

Assures that the grantor will assist in clearing any title problems discovered later

Warrant of encumbrances

Assures that there are no encumbrances on the property except those expressly named

Guardian's deed

Used by a court-appointed guardian to transfer property of minors, or mentally incompetent persons.

Personal representative's deed

Used by an executor to convey a decedent's estate; also called an executor's deed.

Partition deed

Used to convey co-owned property in compliance with a court order resulting from a partition suit; a partition suit terminates an estate when one or more co-owners want to dissolve their relationship and are unable to do so without the assistance of a court.

Sheriff's deed

Used to convey foreclosed property sold at public auction; usually executed pursuant to court order.

Master deed

Used to convey land to a condominium developer; accompanied by the condominium declaration when recorded.

Tax deed

Used to convey property sold at a tax sale.

Deed of trust

Used to convey property to a third party trustee as collateral for a loan; on satisfaction of the loan terms, the trustee uses a reconveyance deed to convey the property back to the borrower.

Deed in trust

Used to convey property to the trustee of a land trust. Not to be confused with deed of trust.

Patent deed

Used to transfer government property to private parties.

Eminent Domain

Various government and public entities can transfer private property to the public sphere by the power of eminent domain. The transfer is involuntary, even though the owner receives compensation.

Types of Will

A will generally takes one of the following forms: Witnessed Holographic Approved Nuncupative

Eminent Domain

As noted in the previous page , Eminent Domain is the right of the government (federal, state and local) to take private property for a necessary public good. To take property from an owner, three things must take place: The property owner must be paid "just" compensation for the property. The property must be for the public good* The owner must have due process in the courts.

Abandonment

Property that has been abandoned for a statutory period may also escheat to the state or county.

Warranty against grantor's acts

States the assurance of a trustee, acting as grantor on behalf of the owner, that nothing has been done to impair title during the fiduciary period

A private grant that occurs when the owner dies is a transfer by

Will

A deed is a legal instrument used by

an owner, the grantor, to transfer title to real estate voluntarily to another party, the grantee.

Wills

last will and testament: voluntary transfer to heirs after death maker: devisor or testator; heir: devisee; estate: devise Law of Situs; Law of Domicile

Transfer tax

state tax on conveyances based on price

The term for the author of the will is

testator

Types of will

witnessed; holographic; approved; nuncupative

Voluntary Alienation by Will

(Wills are voluntary in the planning sense - not in the implementation.)

When an owner dies testate

(with a valid will), property may transfer to others.

Foreclosure

A property owner who fails to fulfill loan obligations or pay taxes may lose an estate through foreclosure.

A special-purpose deed is

A special-purpose deed is one tailored to the requirements of specific parties, properties, and purposes. The principal types are: Personal representative's deed Guardian's deed Sheriff's deed Deed of trust Deed in trust Master deed Partition deed Patent deed Tax deed

Tenendum clause

Identifies property being conveyed, in addition to land.

Law of Situs:

Real Property, whether devised or inherited, is distributed according to the laws of the state in which the property is located - regardless of where the deceased held legal residence People who own real property in more than one state should be sure their will meets each jurisdiction's laws, or they may be determined intestate even if they died testate in their home jurisdiction.

Transferring Title

Transfer of title to real estate, also called alienation, occurs voluntarily and involuntarily. When the transfer uses a written instrument, the transfer is called a conveyance.

Validity

adult; competent; indicates "last will and testament"; signed; witnessed; voluntary

A living owner makes a private grant by means of a

deed of conveyance, or deed.

A beneficiary of a will is called an

heir or devisee.

Probate

if testate, estate passes to heirs; if intestate, to successors by descent; if intestate with no heirs, estate escheats to state or county

Witnessed

in writing and witnessed by two people

Nuncupative

made orally, and written down by a witness; generally not valid for the transfer of real property

Recording is not necessary to make a deed

valid. However, it is in the grantee's best interests to do so. Recording the deed gives the public constructive notice of the grantee's ownership.

When an owner dies intestate

(without a will), the property descends to the legal heirs who inherit according to the State's Statute of Descent and Distribution.

Warrant of quiet enjoyment

Assures that the grantee will not be disturbed by third party title disputes

Warranty forever; warranty of title

Assures that the grantee will receive good title, and that grantor will assist in defending any claims to the contrary

Warrant of seizen

Assures that the grantor owns the estate to be conveyed, and has the right to do so

Validity Depending on state law, a deed must meet the following requirements for validity. The deed must:

Be delivered and accepted. Have a competent grantor and legitimate grantee. The grantor must be living, of legal age, and mentally competent. If the grantor is a corporation, the signing party must be duly authorized. The grantee must be living or have legal existence, but need not be of legal age or mentally competent. Be in writing. Contain a legal description. Contain a granting clause. The deed must express the grantor's present desire and intention to transfer legal title to the grantee. Include consideration. The deed must be accompanied by valuable (monetary) or good (love and affection) consideration, but the amount need not reflect the actual price in most cases. Be signed by the grantor. The deed must be signed by the grantor, but need not be signed by the grantee unless the deed contains special provisions requiring the grantee's acceptance. Grantors may give power of attorney to other parties, authorizing them to execute deeds on their behalf. The power of attorney authorization should be recorded to ensure a valid conveyance. Be acknowledged. The grantor must declare, before a notary or other authorized person, that the grantor's identity and signature are genuine, and that the deed execution was a free, voluntary act. The grantor then receives a certificate of acknowledgment signed by the notary. Some states require acknowledgment to complete a valid conveyance. Most states require it before they will record the deed. A deed without an acknowledgement, therefore, tends to endanger one's claim to a property.

Delivery And Acceptance

Execution of a valid deed in itself does not convey title. It is necessary for the deed to be delivered to and accepted by the grantee for title to pass. To be legally valid, delivery of the deed requires that the grantor: be competent at the time of delivery intend to deliver the deed, beyond the act of making physical delivery Validity of the grantee's acceptance requires only that the grantee have physical possession of the deed or record the deed. Once accepted, title passes to the grantee. The deed has fulfilled its legal purpose and it cannot be used again to transfer the property. If the grantee loses the deed, there is no effect on the grantee's title to the estate. The grantor, for example, cannot reclaim the estate on the grounds that the grantee has lost the deed after it was delivered and accepted. Nor can the grantee return the property by returning the deed. To do so, the grantee would need to execute a new deed.

Wills: Probate

Generally settles a decedent's estate, whether the person has died testate (having left a valid will) or intestate (having failed to do so). Real property may be exempted from probate if it is held in a land trust. Probate of real property occurs under jurisdiction of courts in the state where the property is located, regardless of where the deceased resided. The probate court's objectives are to: validate the will, if one exists identify and settle all claims and outstanding debts against the estate distribute the remainder of the estate to the rightful heirs If the will does not name an executor, the court will appoint an administrator to fulfill this role. There are three possible channels of probate deliberation, depending on whether there is a will and heirs: testate proceeding, intestate with heirs, and intestate without heirs.

Intestate Proceeding With No Heirs

If an intestate decedent has no heirs, the estate escheats, or reverts, to the state or county, after all claims and debts have been validated and settled.

Bargain And Sale Deed

In a bargain and sale deed, the grantor covenants that the title is valid but may or may not warrant against encumbrances, or promise to defend against claims by other parties. If there is a warrant of defense, the deed is a full warranty bargain and sale deed. The overall bargain and sale covenant is: "I own, but won't defend."

Special Warranty Deed

In a special warranty deed, the grantor warrants only against title defects or encumbrances not noted on the deed, which may have occurred during the grantor's period of ownership or trusteeship. The deed does not protect the grantee against claims that predate the owner's period of ownership. Special warranty deeds are often used by trustees and grantors who acquired the property through a tax sale. The overall special warranty covenant is: "I own and will defend against my acts only."

Involuntary Alienation

Involuntary alienation is a transfer of title to real property without the owner's consent. Involuntary alienation occurs primarily by the processes of descent and distribution, escheat, foreclosure, eminent domain, adverse possession, and estoppel.

Name and briefly explain the two legal principles that affect transferring property by will.

Law of Situs - real property is distributed according to the laws of the state in which the property is located. Law of Domicile - personal property is distributed according to the laws of the state in which the deceased held legal residence, regardless where the property is located.

Two legal principles affect transfer of ownership to property by will.

Law of Situs: Law of Domicile:

Name the forms of involuntary alienation of title.

Laws of descent, abandonment, foreclosure, eminent domain, escheat, adverse possession, estoppel, dedication.

Law of Domicile:

Personal property is distributed according to the laws of the state in which the deceased held legal residence, regardless of where the property is located.

Reddendum clause, or reserving clause

Recites restrictions and limitations to the estate being conveyed, e.g., deed restrictions, liens, easements, encroachments, etc.

What is the function of a deed?

The deed is a transaction document, not an ownership document. It conveys title, when properly delivered and accepted (and registered, in Torrens counties), then ceases to have any transfer function except as evidence that a conveyance occurred, and as evidence of the warrants the conveyor made.

General Warranty Deeds

The general warranty deed, or warranty deed for short, is the most commonly used deed. It contains the fullest possible assurances of good title and protection for the grantee. The deed is technically a bargain and sale deed in which the grantor promises to defend against any and all claims to the title. The overall general warranty covenant is: "I own and will defend."

statutory deeds

The most common deeds are -, in which the covenants are defined in law and do not need to be fully stated in the deed. The prominent types are the following. It guarantees the grantor holds and is transferring full and legal title to the property. Using either a statutory or general warranty deed provides the most protection to the buyer of the property.

Granting clause, or premises clause

The only required clause; contains the conveyance intentions; names the parties; describe the property; indicates nominal consideration

"taking."

This means that the government did not fulfill its obligation and that the land was taken illegally.

List and briefly explain the two types of title transfer.

Voluntary alienation - an unforced transfer of title by sale or gift from the owner to another party. Involuntary alienation - a transfer of title to real property without the owner's consent.

Voluntary Alienation

Voluntary alienation is an unforced transfer of title by sale or gift from an owner to another party.

Describe the four types of will.

Witnessed—written, two witnesses Holographic-handwritten or typed, signed by testator Approved-on a pre-printed form approved by the state Nuncupative-written by a witness from testator's oral statement; generally not valid for real estate transfer

When the transfer uses a written instrument, the transfer is called

a conveyance.

A will, or more properly, a last will and testament, is

a legal instrument for the voluntary transfer of real and personal property after the owner's death. It describes how the maker of the will, the testator or devisor, wants the property distributed. A beneficiary of a will is called an heir or devisee. The property transferred by the will is the devise. A will takes effect only after the testator's death. It is an amendatory instrument, meaning that it can be changed at any time during the maker's lifetime.

Real property is said to transfer by

devise to the devisees.

Holographic

in the testator's handwriting, dated and signed; some states also regard typed wills signed by the testator to be holographic

Adverse Possession

is someone who enters, occupies, and uses another's property without the knowledge or consent of the owner, or with the knowledge of an owner who fails to take any action over a statutory period of time.A property registered in the Torrens system cannot be lost to adverse possession.

Condemnation

is the court action used when the right of eminent domain is exercised. It does not refer to deteriorating buildings in this case.

Statutory Dedication

is the mean by which an owner or developer transfers private property to the state. It may be in the form of a requirement for any new subdivision to set aside land for streets, parks or future schools. The dedication is a statement on the subdivision plat map giving such lands over to the government. At the moment the plat is recorded, title transfers to the city/county.

Approved

on pre-printed forms meeting the requirements of state law

Deed clauses and covenants

premises clause: granting clause habendum clause: type of estate reddendum clause: restrictions tenendum clause: other property included

Estoppel

prevents a person from claiming a right or interest that is inconsistent with the person's previous statements or acts. As a basis for involuntary alienation, the doctrine of estoppel can prevent an owner from re-claiming a property that was transferred under false pretenses.

If the transferor is a government entity and the recipient is a private party, the conveyance is a

public grant.

Conveyance clauses and covenant, or warrant, clauses

set forth all the necessary provisions of the conveyance.

Special purpose deeds

used for different purposes, to convey certain interests, or by certain parties

Quitclaim Deed

A quitclaim deed transfers real and potential interests in a property, whether an interest is known to exist or not. The grantor makes no claim to any interest in the property being conveyed and offers no warrants to protect the grantee. The quitclaim is typically used to clear title, rather than convey it. Where there is a possibility that prior errors in deeds or other recorded documents might cloud (encumber) the title, the relevant parties execute a quitclaim deed to convey "any and all" interest to the grantee. If a party responsible for encumbering title refuses to quitclaim the interest, the owner may file a quiet title suit. This requires the lienor to prove the validity of an interest. If the defendant is unable to do so, the court removes the cloud by decree. The overall quit claim covenant is: "I may or may not own, and I won't defend."

To claim legal title, the adverse possessor must:

Be able to show a claim of right or color of title as reason for the possession. A claim of right is based on the adverse possessor's occupying and maintaining the property as if he or she were the legal owner. Color of title results when a grantee has obtained defective title, or received title by defective means, but occupies the property as if he or she were the legal owner. A court may hold that a claim of right or a claim of colored title is a valid reason for the possession. Have notorious possession, which is possession without concealment. Maintain a consistent claim of hostile possession, which is a claim to ownership and possession regardless of the owner's claims or consent. Notorious possession and hostile possession give constructive notice to the public (including the legal owner), that a party other than the legal owner is occupying and claiming to own the property. It is possible for such notice to prevail over notice by recordation as the dominant evidence of legal ownership, provided the possessor has occupied the property continuously for the statutory period of time. Occupy the property continuously for a statutory period of time. In some states, the possessor must have paid taxes over a prescribed period to obtain title. However, if the possessor has paid rent of any kind, the claim of ownership might be refuted. In some states, pay taxes. An owner can avert the danger of involuntary alienation by adverse possession by periodically inspecting the property within statutory deadlines and evicting any trespassers found. The owner may also sue to quiet title, which would eliminate the threat of the adverse possessor's claim to legal title.

Escheat

Because property must always belong to someone, the state steps in if there is no will and no heirs. Only the state where the property is located can do this: it is not a right of the federal government.

Conveyance Clauses

Conveyance clauses describe the details of the transfer. The principal conveyance clauses are: Granting clause, or premises clause Habendum clause Reddendum clause, or reserving clause Tenendum clause

Covenant, or Warrant, Clauses

Covenant clauses present the grantor's assurances to the grantee. A deed of conveyance usually contains one or more of the following covenants, depending on the type of deed. Warrant of seizen Warrant of quiet enjoyment Warrant of further assurance Warranty forever; warranty of title Warrant of encumbrances Warranty against grantor's acts

List the eight requirements of a deed's validity.

Delivered and accepted Competent grantor and legitimate grantee Be in writing Contain legal description Contain granting clause Include consideration Signed by grantor Acknowledged

Habendum clause

Describes the type of estate being conveyed (fee simple, life, etc.)

Testate Proceeding

If the decedent died with a valid will, the court hears the claims of lienors and creditors and determines their validity. First in line are the superior liens: those for real estate taxes, assessment taxes, federal estate taxes, and state inheritance taxes. If the estate's liquid assets are insufficient to pay all obligations, the court may order the sale of personal or real property to satisfy the obligations. The court must also hear and satisfy legal life estate claims, including those for dower, curtsey, homestead, and elective share. These interests may prevail even if the will does not provide for them. Once all claims have been satisfied, the balance of the estate's assets passes to the rightful heirs free and clear of all liens and debts.

Intestate Proceeding With Heirs

If the decedent died without a valid will, the estate passes to lawful heirs according to the state's laws of descent and distribution, or succession. Laws of descent stipulate who inherits and what share they receive, without regard to the desires of the heirs, or the intentions of the deceased.

Laws of Descent

Involuntary alienation occurs when a title-holder dies without a valid will. The state's statutes of descent and distribution identify heirs and the respective shares of the estate they will receive. In the absence of heirs, title transfers to the state or county by escheat.

Personal Property transferred through a will

Is a bequest left to a legatee

What is an adverse possessor?

It is someone who enters, occupies, and uses another's property without the knowledge or consent of the owner, or with the knowledge of an owner who fails to take any action over a statutory period of time.

What does an estoppel do?

It prevents a person from claiming a right or interest that is inconsistent with the person's previous statements or acts. It can prevent an owner from reclaiming a property that was transferred under false pretenses.

Validity of Will

State law establishes requirements for a valid will. The law generally requires that: the testator be of legal age and mentally competent the testator indicate that the will is the "last will and testament" the will be signed the completion of the will be witnessed and signed by the witnesses the will be completed voluntarily, without duress or coercion

documentary stamp tax

State law usually requires payment of a ___ on a conveyance of real property. The tax is based on the actual price of the property conveyed, thus enabling taxing authorities to ascertain current market value for ad valorem tax purposes. Payment of the tax is evidenced on the deed. Exemptions from transfer tax include: transfer within the immediate family consideration less than a certain amount transfer between government entities or non-profit organizations trust deed transfer and reconveyance tax deed

What is the reason an owner would sue for "taking"?

The owner's property was taken by the government under eminent domain, but the owner feels the government did not fulfill its obligation to adequately compensate, did not use the property for public good, or did not give the owner his day in court. Therefore, the owner believes the property was taken illegally.

What happens to Joe's real estate in your state if Joe dies leaving a) a wife, children, and a will; b) a wife and children, but no will; c) no legal heirs, and no will?

a) after all claims have been satisfied (including those of legal life estates), the estate goes to the heirs according to the will. b) after all claims have been satisfied (including life estates), the estate goes to the heirs according to the state's laws of descent and distribution. c) after all claims have been satisfied (here, there can be no life estate), the estate goes to the state by escheat.

Transfer of title to real estate, also called

alienation

Statutory deeds

bargain and sale: "I own but won't defend" general warranty: "I own and will defend" special warranty: "I own and warrant myself only" quitclaim: "I may or may not own, and won't defend"

An amendment or addition to a will is called a

codicil.

Commonly, the testator names an

executor, or personal representative, to oversee the settlement of the estate. If a minor is involved, the testator may identify a guardian to handle legal affairs on behalf of the minor

If the transferor is a private party, the conveyance is a

private grant.

Warrants

seizen; quiet enjoyment; further assurance; forever; encumbrances; grantor's acts