Chapter 5: Transfer of Property

Cloud of Title

A claim, encumbrance or condition which impairs the title to real property until disproved or eliminated by, for example, a quitclaim deed or a quiet title action.

Contingency

A condition that needs to be met before escrow can proceed to closing.

Probate Sale

A court managed sale of a property during the probate process.

Transfer by Deed

A deed is a written instrument which conveys title to real estate. Title by deed passes either: • voluntarily by agreement with the owner, as in a sale in the open market or foreclosure on a trust deed or assessment bond; or • involuntarily without agreement, such as the enforcement of a creditor's judgment or tax lien. No matter the form of writing, the individual conveying real estate is called the grantor. The individual acquiring title is called the grantee. A deed: d — A deed does not need to be recorded to be valid, but must be recorded to give constructive notice (answer selection A). Implied warranties are not included in a: a — The quitclaim deed is the exception here. There are no guarantees or warranties with a quitclaim deed. A grant deed has been executed once it has been: d — A signature completes the execution. The transfer process requires delivery and acceptance to be complete.

Chain of Title

A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be vested in current owner.

Adverse Possession

A method of acquiring title to real property by a person other than the owner of record through open possession of the property for a five year statutory period and payment of property taxes.

Vesting

A method of holding title to real estate, including joint tenancy in common, community property and community property with the right of survivorship.

Impounds Account

A monetary reserve of a mortgage borrower's funds held by a lender or carryback seller to pay for annual property obligations owed by the owner to others.

California Veteran (CalVet) Loan

A program administered by the State Department of Veterans Affairs for the direct financing of farm and home purchases by eligible California veterans of the armed forces.

Sheriff's Sale

A public auction of property held by the sheriff pursuant to a court order to seize and sell the property to satisfy a money judgment.

Preliminary Title Report (prelim)

A report constituting a revocable offer by a title insurer to issue a policy of title insurance used by a buyer and escrow to initially establish the current vesting and encumbrances attached to title of a property as reflected by public record.

Abstract of Title

A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title.

Conveyance

A transfer of a interest in title to property from one person to another, such as is effected by a deed or a trust deed.

American Land Title Association (ALTA)

A type of title insurance issued by title insurance companies which expands the risks insured against under the standard type policy to include unrecorded mechanic's liens; unrecorded physical easement; facts a physical survey would show; water and mineral rights; and rights of parties in possession, such as tenants and buyers under unrecorded instruments.

Transfer by Contract

Another alternative means of transferring property is through a land sales contract. Under a land sales contract, the seller retains title to the property until all or a prescribed part of the purchase price has been paid. A land contract, when compared to a grant deed transfer, is different in the: d — All of these will differ between a contract and a deed.

Tenancy in Common

Co-ownership of property by two or more persons who each hold an undivided interest, without right of survivorship; interests need not be equal.

Tax Deduction on Personal Residence

Expenses related to real estate ownership that may be deducted from income for purposes of income tax reporting.

Title

Indicates fee position of lawful ownership and right to property. Bundle of Rights possessed by an owner. Combination of all elements constituting proof of ownership.

Personal Property

Movable property which is not classified as real estate, such as trade fixtures and furnishings.

Severalty

Ownership by one person.

Joint Tenancy

Ownership of an interest in property concurrently conveyed to two or more individuals who share equally and have the right of survivorship.

Delinquent Taxes

Property taxes not paid prior to becoming delinquent.

Proration

Provisions entitling the seller to a credit for the portion of prepaid sums which have not accrued on obligations a buyer assumes on the day escrow closes, or entitling the buyer to a credit for amounts assumed which accrued unpaid through the day prior to the close of escrow.

Ad Valorum

Real estate taxes imposed on property based on its assessed value.

Property Tax Assessment

The annual property taxes an owner of a home needs to pay are determined by: a. assessing the land and improvements separately, then multiplying the total by one tax rate.

Adjusted Basis

The cost of a property after the application of additions for further improvements and deductions of improvements and depreciation.

Escrow

The depository process employed to facilitate the gathering of instruments and funds for use to transfer real estate interests between two persons.

Recording

The process of placing a document on file with the Recorder for a county as the designated public official for public notice.

Recurring Costs

The regular and continuing costs of a buyer incurred in the closing of an escrow to acquire property. Distinguished from non-recurring costs.

Tax Foreclosure Sale

The sale of a property by the County Tax Collector to pay unpaid property taxes.

California Land Title Association (CTLA)

The standard title insurance policy.

Transfer Stamp

Which of the following would be an incorrect amount for documentary transfer tax stamps? a. $110.00. c. $220.00. b. $55.00. d. $111.00. d — Transfer stamps come in multiples of $0.55.