Real Estate: Transfer Of Property
Special Warranty Deed
-Covenant of SEISIN -Covenant against ENCUMBRANCES -Covenant of QUIET ENJOYMENT -Covenant of FURTHER ASSURANCE *Only warrants during the period of ownership by the seller.
General Warranty Deed
-Covenant of SEISIN -Covenant against ENCUMBRANCES -Covenant of QUIET ENJOYMENT -Covenant of FURTHER ASSURANCE -Covenant of WARRANTY FOREVER *Most common deed used in real estate- gives the purchaser the greatest protection.
Estate Taxes
1. $5 million of estate is exempt from taxes. 2. May change as tax policy is amended.
Homeowner Exclusion
1. $500,000 is excluded from taxes for married couples. 2. Exclusion is $250,000 if single. 3.Must live in the home for a min. of 2 of the last 5 yrs. 4. Gains of max. exception are taxed at ordinary rates.
Testate
A person who died WITH a will; the will decides what happens to the property; takes effect after the death of the testator-until death, property covered by will can be conveyed by owner prior to death.
Intestate
A person who died WITHOUT a will; decedent's real estate and personal property passes to heirs.
Cloud on Title
Any claim / encumbrances that may impair the title to a property.
Attorney's Opinion of Title
Buyer's attorney examines the abstract for flaws and prepares a written opinion of the condition of ownership.
Voluntary Alienation
By gift or sale; owner willingly transferred property to another. Transfer title during his/her lifetime. * Owner must use some form of deed conveyance.
Abstract of Title
Condensed history of all instruments on record affecting the title to the property. Includes all buyer's, seller's and encumbrances.
Quiet title Action
Court action to settle disputes concerning ownership.
Laches
Court doctrine that bars a legal claim because of undue delay to assert the claim; Statute of limitations has expired on making the claim; Too much time has passed.
Extended Coverage Policies
Covers additional risks that may be discovered only by inspection of the property, unrecorded rights of persons in possession, or by examination of an accurate survey.
Parole Evidence Rule
Document speaks for itself and cannot be altered by oral or written explanation.
Standard Coverage Policies
Does NOT cover situations arising from questions involving the survey, defects the policyholder does or does not have knowledge or unrecorded documents
Adverse Possession
Exclusive and continuous possession of another's land under a claim of title; periods of time may be tacked on by successive owners/tenants.
IRA Withdrawls
First time homebuyers may withdraw money for down payment from IRAs penalty free; $10,000 limit.
Types of Deeds
General Warranty Special Warranty Bargain and Sale Quitclaim
Erosion
Gradual wearing away of land by natural forces.
Deed Requirements
Grantor Grantee Consideration Granting Clause Habendum Clause Description of real estate Acknowledgement Delivery and acceptance Exceptions and reservations("subject-to clauses")
Bargain and Sale Deed
Grantor acknowledges ownership but makes no warranties.
Quitclaim Deed
Grantor does not make any warranties or guarantees of title; used to transfer unsure interests in property & clear clouds on titles. *Grantor does not claim to be the owner.
Actual Notice
If a Deed is unrecorded it is valid to those who 'actually know' of the transfer, but not binding on those who do not actually know of the transfer.
Lis pendens
Latin for "action pending". Recorded document creating constructive notice that an action, lawsuit, relating to a certain property and may affect the value or the right to transfer the property.
Statute of Decent and Distribution
Law deciding how property is transferred when a person dies.
Statute of Limitations
Law that requires certain contracts be in writing before they can be enforced.
Constructive Notice
Legally all persons are responsible for knowing what is recorded on the public record. *Purpose of recording a Deed is to give constructive notice.
Certificate of Title
Name of document prepared by an attorney.
Relicition
New land is acquired as water recedes.
Legal Title
Owner has actual legal title to property. *Lien property states- owner has legal title during loan. *Title theory states- owner gives legal title to trustee, but has equitable title.
Equitable Title
Owner has title rights, but no legal title. *Title Theory states- owner gives legal title to trustee but has equitable title. *Buyer has equitable title rights from the time he or she signs a purchase agreement up until the act of sale.
Escheat
Person dies intestate (w/o a will) and leaves no heirs or abandons the property. The title to their real estate passes to the state.
Escrow Agent
Person who handles the money, makes sure paperwork is accurate and signed by ALL parties at closing; Records documents on the public record; Makes sure title passes and sale is completed. *The buyer(s) & seller(s) appoint an independent third party; A notary in some states; Attorney or licensed escrow agent; Trained broker.
Writ of Attachment
Prevents a debtor from transferring property during a lawsuit.
Foreclosure
Process of taking property and using the proceeds to pay off the debt of the property [because the owner defaulted].
Involuntary Alienation
Property is transferred without the owner's consent.
Title Insurance
Protects the insured against loss resulting from defects in the title. *Protection against the possibility that their title is not valid.
Eminent Domain
Right of government to take private property for public use.
Appurtenances
Rights belonging to the land that pass with the title to the property.
Accretion
Slow accumulation of soil, rock, etc. deposited by the movement of water [on the owner's property].
Avulsion
Sudden tearing away of land by water or earthquake
Novation
To cancel a contract by putting a new one in place.
Assignment
Transfer of rights / duties under a contract. Rights may be assigned but not the obligation to perform. *If assignee defaults, assignor will be required to perform.
Torrens System
Used in some states instead of title insurance; fee is paid to the state when the title is recorded-state insures a valid title; property cannot be obtained through adverse possession in those states.
Deeds
Written instruments of conveyance from the owners (grantors) to recipients (grantees); documents that transfer title; a contract.