Unit 6- Transfer of title

Exceptions and Reservations

A deed may specifically note any encumbrances, reservations, or limitations that affect the title being conveyed. Include restrictions and easements that run with the land.

Consideration

A valid deed must contain a clause acknowledging that the grantor has received something in return for deeding the described property to the grantee.

Bargain and Sale Deed

Contains no express warranties against encumbrances, but it does imply that the grantor holds title and possession of the property. May be used in foreclosures and tax sales. Buyer should purchase title insurance if not provided by the seller.

Requirements for a valid deed

Grantor Grantee Consideration Granting Clause Habendum Clause Legal description of real estate Exceptions and reservations Acknowledgement Delivery and acceptance

Legal description of real estate

Land is considered adequately described if a professional surveyor can locate the property and accurately mark its boundaries using the description.

Special Warranty Deed

Limits the grantors defense of the title transferred by warranting: That the grantor received title. That the property was not encumbered during the time the grantor held title, except as otherwise noted in the deed. Grantor promises to defend the title as provided in the convenants of a general warranty deed, but only against the grantors actions, not those of earlier owners of the property. " grantor remises, releases, alienates, and conveys.."

Grantors tax on conveyances of real estate. .

May be paid by either the seller or buyer, or split between them, depending on the sales contract.

Transfer of title by will

Must be delivered during the lifetime if the grantor and that conveys present interest in property. Only property owned by the testator at the time of their death may be transferred by will. For the title to pass to the devisee, state laws require that the will be filed with the court and probated. Cannot supersede the state laws of dower, curtesy, and homestead.

Grantee

Must be specifically named so that the person to whom the property is being conveyed can be readily identified from the deed itself.

Quitclaim Deed

Provides the grantee with the least protection of any deed. It carries no covenants or warranties and generally conveys only whatever interest the grantor may have when the deed is delivered. Used to convey less than a fee simple estate Frequently used to cure a title defect, called a cloud on the title. Used when a grantor has apparently inherited property but it is not certain that the descendents title was valid.

General warranty deed

Provides the greatest protection to the buyer because the grantor is legally bound by certain covenants or warranties. Convenant of seisin Convenant against encumbrances Convenant of further assurances Convenant of quiet enjoyment Convenant of warranty forever

Grantor

The individual who conveys the ownership rights of real property. Must be of lawful age and legal competent.

Reconveyance Deed

Used by a trustee to return title to the trustor. Used to reconvey title to property back to the borrower once a debt has been paid on a deed of trust; also called a release deed.

Acknowledgement

A formal declaration under oath that the person who signs a written document does so voluntarily and that the signature is genuine. Made before a registered notary public of an authorized public officer, such as a judge, justice of peace, or some other person as prescribed by law.

Probate

A formal judicial process to confirm a will's validity and to see that assets are distributed correctly. Decedents debts must be satisfied before any property is distributed to the heirs. Applicable federal estate taxes and state inheritance taxes must be paid before any distribution. To avoid the delay and expenses of probate, establish a living trust and transferring title to real and personal property to the trust.

Adverse Possession

An individual who makes a claim to a certain property, takes exclusive possession of it by excluding the true owner and any other title claimants, and USES IT, may take tile away from an owner who fails to use it or inspect the property for a period of years. ONCHA Open- obvious to anyone that looks. Notorious- known by others. Continuous- uninterrupted. Hostile- without the true owners consent. Adverse- against the true owners right of possession.

Deeds that may be exempted from tax

Deeds from subsidiary to parent corporations for cancellation of stock. Gifts of real estate. Deeds not made in connection with a sale. Conveyances to, from, or between government bodies. Deeds by charitable, religious, or educational institutions. Deeds securing debts. Partitions. Tax deeds. Deeds pursuant to merges of corporations.

Deed executed pursuant to a court order

Deeds that are established by state statute and are used to convey title to property that is transferred by court order or will. Executors and administrators deeds, masters deeds, and sheriffs deeds.

Involuntary Alienation

Escheat by state or county. Condemnation by eminent domain by government body or designated authority. Foreclosure by creditors. Adverse possession by adverse possessor.

Types of deeds

General warranty deed Special warranty deed Bargain and sale deed Quitclaim deed Deed of trust Re conveyance deed Trustees deed Deed executed pursuant to a court order

Voluntary Alienation

Legal term for the transfer of title during the property owner's lifetime. An owner may transfer title by making a gift or by selling the property.

Title

The right of ownership of the land. It represents the owners bundle of legal rights.

Delivery and Acceptance

The transfer of title requires both delivery and acceptance of the deed.

Execution of Corporate Deeds

Two basic rules must be followed: A corporation can convey real estate only by the the authority defined in its bylaws or on the basis of a resolution passed by its board of directors. If all or a substantial portion of a corporations real estate is being conveyed, usually a resolution authorizing the sale must be secured from the shareholders. A deed conveying corporation owned real estate can be signed only by an authorized officer.

Trustee's Deed

Used when a trustee conveys real estate held in the trust to anyone other than the trustor. Conveyance from trustee to third party.

Conveyance of a Decedent's Property

When a person dies, ownership of real estate is passed to: - the co owner by virtue of a joint tenancy with right of survivorship or tenancy by the entirety. - the party or parties named in a valid will. - the statutory heirs determined by the states law of decent and distribution.

Habendum Clause

When it is necessary to define or explain the ownership to be enjoyed by the grantee. May follow the granting clause. Usually begins with the words to have and to hold.

Granting Clause

words of conveyance that states the grantor's intention to convey the property. "I, ABC, convey and warrant..." "I, ABC, remise, release, alienate, and convey.." "I, ABC, grant, bargain, and sell..." "I, ABC, remise, release, and quitclaim..."