FIn 3305 Real Estate Exam 2
Quiet Enjoyment
The right of an owner or lessee legally in possession of property, to uninterrupted use of the property without interference from the former owner, lessor or any third party claiming superior title.
Dedication of land
When a developer sets aside a portion of the land for common area, parks, or sidewalks. - land is gifted from owner to the public - public is responsible for maintaining the land NOTE: There are "dedicated" streets on old subdivision maps which were never officially accepted and, in effect, belong to no one.
Deed
Written legal document that transfers ownership of real property amongst parties
Testator/Testatrix
a person who makes a will
Adverse Possession
acquisition of land through prolonged and unauthorized occupation - method of acquiring title by pocessing land for a specified period of time under certain conditions
accretion
acquring natural land via lake, river, or ocean due to gradual accumulation of rock, sand, and soil
Right to cancel timeshare
any purchaser can cancel contract for timeshare interest before 6th day after contract signed
Dedication by deed
developer prepares a deed that identifies the streets and grants them to the city
Unit Deed
each purchaser receives deed
List types of leasehold estates
estate for years, periodic estate, estate at will, and tenancy at sufferance
Gross lease
flat rent; rentals paid in leases that don't change during the term
Covenants
legally binding promises for which the grantor becomes liable that are in writing
Land description
metes and bounds, rectangular survey, lot block and track
Lessor
owner; landlord
Texas Timeshare Act
regulates the creation and sale of timeshare interests in development properties - Real estate license required to market unit, unless otherwise exempt - register property with TREC - grants power to investigate all aspects of the dev to TREC
Statute of Frauds
requires that transfers of real estate ownership be in writing and signed in order to be enforceable in a court of law.
Fee Simple Timeshare
right to fee ownership of 1-2 weeks each year into perpetuity (no maturity date)
Estate for years
specific starting and ending date
Under TX laws, when someone dies, testate or intestate, that person's real or personal property passes to ____
the person's heir or beneficiaries
Probate Court
where deceased's will must be filed with court having power to admit and certify wills - checks validity of will - properly signed, witnessmed and testator was of sound mind when he did will
formal will
written document prepared in most cases by an attorney
Periodic estate
•one that renews itself automatically
Reversion define:
•right of owner to retake possession at end of lease period. (owner doesn't want reversion, they want the lease to renew for the lessee)
Lease
•written legal document conveying a possessory interest in RE from lessor to lessee - both a conveyance and contract
Option clause
(for tenant) The right at some future time to purchase or lease a property at a predetermined price
Guardian's deed
- Used to convey a minor's interest in real property - Deed must state legal authority that permits the guardian to convey the minor's property
Reversion
- can occur when deed contains a condition or limitation - if the condition is breached, the grantor can reacquire title
Sheriff's deed or trustee's deed
- in event of a foreclosure is issued to the new buyer when a person's real estate is sold as the result of a mortgage or other court-ordered foreclosure sale - carries 1 covenant
Special Warranty Deed
A deed in which the grantor warrants, or guarantees, the title only against defects arising during the period of his or her tenure and ownership of the property and not against defects existing before that time, generally using the language, "by, through, or under the grantor but not otherwise." · Grantee can protect against gap in warranty by buying title insurance
codicil
A written supplement or modification to a will. A codicil must be executed with the same formalities as a will.
Seperate Elements
Areas in the condominium that are exclusively owned and used as fee simple estate
condominium conversion
Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.
Gift deed
Created by simply replacing the recitation or money and other valuable consideration with the statement, "in consideration of his love and affection
Real Property that is willed is called
Devise, recipient, a legatee
Testate
Dying with a valid will
Who executes the deed by signing it?
Grantor
What Makes a Written Doc a Deed?1. Identify the _______ & the ______2. Must state _________3. Words of _______4. Land description that cannot be _________5. Grantor executes deed by _______ it
Grantor, Grantee, Consideration, Conveyance, misunderstood, signing
Cooperative apartments
Organized by forming a non-profit corporation
Testator or testatrix
Person who made the will and names the persons or organizations who are to receive the property.
Escalation clause
Provision in a lease for upward and downward rent adjustments.
Net lease rent
Rentals that are paid to the landlord; the tenant pays all expenses (property tax, insurance, repairs, utilities)
Uniform Condominium Act
Requires seller to furnish copies of bylaws / rules and regulations of the association for buyers review. You have 5 days to review and this should be given before the offer
What are the fastest ways to accomplish the transfer of title in a dedication case?
Statutory dedication or dedication
Quitclaim Deed
- A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest. - a legal instrument used to convey whatever title the grantor has; it contains no covenants or warranties, nor implication of grantor's ownership
Public Grant (patent)
- A transfer of land by a govt body to private individual - Some plausible but not completely clear-cut indication of ownership rights
Adverse Possession Requirements
- Actual - Exclusive - Open and notorious - Hostile - Continuous for statutory period
Date and Acknowledgment
- Deed has the date it was executed by grantor, but not essential to deed's validity - Acknowledgment: the grantor appears before a notary public and formally declare that he signed the deed as a voluntary act - Not necessary in Texas to make deed valid conveyance
Types of Deeds
- General warranty deed - Special Warranty Deed - Bargain and sale deed - Quitclaim deed
Owners' association (condo vs coop)
- HOA can control how coop uses property - coop HOA has right to accept or reject new shareholders and sublesses
Timesharing
- Method of dividing up and selling a living unit at a vacation facility for specified lengths of time each year - exclusive use of a property for a specfied number of days in a year
Possible problems with condominium converision
- tenants who are forced to move out of building during conversion - the condo was not originally a condo, was converted. (structure issues)
· Correction deed or deed of confirmation
-Used to correct an error in previously executed and delivered deed Ex: misspelling of name
Upon the death of a spouse in a community property passes to the surviving spouse if: what conditions are met?
1. no children 2. if all surviving children of the deceased spouse are also children of the surviving spouse
Adverse possession types
3year, 5year, 10year, 25year
Alienation
A change of ownership of real property -voluntary: deed or will -involuntary: adverse possession, natural causes ex: involuntary: foreclousre
Color of title
A consecutive chain of transfers down to the person in possession.
General Warranty Deed
A deed in which the grantor fully warrants good, clear title to the premises. Used in most real estate deed transfers, a general warranty deed offers the greatest protection of any deed.
Proprietary lease
A lease issued by a cooperative corporation to its shareholders. - tenant is also owner in building
Tenancy at Sufferance
A tenancy that occurs when a tenant that is supposed to vacate does not, but continues to pay rent, and the landlord accepts it. holdover tenant
Holographic Will
A will written entirely by the testator with his own hand with no witnesses -legal in 19, 31 states don't recognize it
Delivery and acceptance
Actual delivery of the deed by the grantor and either actual or implied acceptance by the grantee. · Deed does not transfer title to the grantee until grantor voluntarily delivers it to grantee and grantee willingly accepts it
Condominium and Cooperative Abuse Relief Act
Allows unit owners to terminate certain management contracts or portions thereof that were created while developer was in control of project
Results of Accretion are known as
Alluvion and reliction
Easement by Prescription
An easement acquired by continuous, open, and hostile use of the property for the period of time prescribed by state law. The use of must occurred over a period of 10 years
Transfer on Death Deed
Enabled by Texas Legislature as means to transfer title to property upon death
Covenant against encumbrances
Estate is free and clear of all encumbrances, except those specified upon execution of the deed
Other types of deeds
Gift deed, Guardian's deed, Sheriff's deed or trustee's deed, Correction deed or deed of confirmation, Tax Deed, Transfer on death deed
Covenant of Seisen
Grantor has not conveyed the same estate in any form previously to anyone but the grantee
executor's
If the testator owned real property, its ownership is conveyed using an ________ deed prepared and signed by the executor
Condominiums
Individual ownership of airspace and undivided ownership of common elements
Planned Unit Development (PUD)
Individually owned lots and houses with community ownership of common areas -ownership of land by unit owner - used for both condos, townhouse development
cooperative apartment (co-op)
Land and building owned or leased by a corporation which , in turn, leases space to its shareholders - can legally discriminate
Bylaws
Rules that govern how the HOA will be run
Tittle by descent or intestate succession
State law directs how the deceased's assets shall be distributed if she is intestate
Ownership by Accession
The altering of one's ownership of real estate caused by man-made or non man-made causes ex: home nearby ocean loses land bc ocean level is higher
Grantor
The individual who conveys the ownership rights of real property - the person giving up ownership - grantor must be of legal age and sound mind
Grantee
The person acquiring ownership from grantor
Tax Deed
Used to convey title to property that has been sold by the state or local government because of the nonpayment of real property taxes
oral or nuncupative will
Will that is spoken by a person who is very near death. Promptly put in writing.
condominium declaration
a document that converts a given parcel of land into a condominium subdivision
Cooperator
a shareholder (purchaser) in a cooperative apartment
Warranty
an assurance or guarantee that something is true as states
Common elements
areas owned by all the unit owners -common areas: lobby, hallways, stairways, elevators, pool, gym
Limited Common Elements
common elements whose use is limited to certain owners - ex: exclusive parking lot
Statutory dedication
developer prepares a map showing the streets, has a map approved by local government officials and then records it as a public document
Intestate
dying without a valid will
Step-up or graduated rental
escalations in leases the provide for reimbursement to the landlord for increases in expenses and costs
Covenants, Conditions, and Restrictions (CC&Rs)
filed list of restrictions by which all owners must abide
Lessee
tenant
Estate at will
terminated any time by either party
Grant
the act of conveying ownership
Alluvion
the increase of land that result when waterborne soil is gradually deposited to produce firm dry ground. slow accretion or erosion of soil, sand, and other parts of land.
Undivided Interest
two or more persons have an interest in a property held under the same title
Reliction (or dereliction)
when a lake, sea, or river permanently recedes, exposing dry land
Dedication
when an owner makes a voluntary gift for the use of land to the public
8 Conditions of Deed/ Title Transfer
§ In writing § Identify grantor and grantee § Grantor must be of legal age and sound mind § Identify property § Contain words of conveyance § State that consideration was given § Signed by grantors only to execute deed § Delivery and acceptance of deed (generally when deed recorded)
Bargain and Sale Deed
· a deed that contains no covenants, but does imply that the grantor owns the property being conveyed · Since there is nothing in writing, there is no assurance that the grantee acquired the title
Consideration
· anything of value given to induce another to enter a contract · if conveyance is gift, then consideration is not required
Legislation Against Abuses
• Uniform Condominium Act • Conversions (from apartments) • HOAs • Cooperative Apartments • Timesharing
Right-to-use timeshare
•contractual right to occupy a living unit for 1-2 weeks a year for 20-40 years