RE Law 4338

Tacking

Tack on his years of adverse possession with those of his predecessor in Interest so that the adverse possessions can cumulatively total the requisite number Of years to acquire title by limitation.

Demand

do not have specific maturity dates on them. Only is due on demand of the lender. Usually gives a few days' notice.

Freehold

estate interests in real estate having unlimited duration; titled interests

Community property

every parcel of real property acquired after marriage becomes Community property, which means the property of both spouses.

Fee on conditional limitation

exist where the estate is limited to the happening of a certain event, and when such event happens, the estate is terminated and reverts to the original owner

Defenses to mutual assent:

fraud, misrepresentation, mutual mistake of fact, duress, menace (Threats), undue influence (excessive persuasion)

Sheriff's deed

given pursuant to a court order or a forced sale by execution.

Creation of homestead / termination

located within the limits of a municipality or extraterritorial jurisdiction , or plat in subdivision; and served by police protection, fire protection, and at least 3 of the Following services: Electric Natural gas Sewer Storm sewer Water

partially amortizing

partial amortizing loan involves paying part of it during its term and then a lump sum or balloon payment at its maturity date.

Water rights

permit holder has no title to the water, he does have a property interest in the right to use the water. As with other property, a water right may be sold, leased, or transferred to another person.

Adverse possession

possession of land owned by someone else may acquire valid title to it, so long as certain common law requirements are met, and the adverse possessor is in possession for a sufficient period of time, as defined by a statute of limitations.

Regular Life Estate

property is generally all conveyed to a grantee for the term of the grantee's life

Cemetery lots

requires that all cemeteries have a perpetual care fund for the administration and maintenance of the cemetery.

Deed in lieu of foreclosure

sure by a lender. Borrower Acknowledges his default, the lien priority and lender's right to foreclose, but deeds the property Back to prevent the foreclosure. Lender must accept the deed and exercise dominion or control over it.

Standard financing documents

tandard financing documents: most mortgage procedures in Texas require two instruments: The Promissory note and the Deed of Trust. The promissory note is the actual promise to pay The deed of trust pledges the real property as collateral

Fixed/variable interest

Fixed (interest rate stays the same) / Variable (interest varies on what the interest rates do in the market)

Pur autre vie

Life estates for the life of another person

Why finance?

No money or capital needed, don't want to tie up your own money, builds credit.

Common law marriage

Common- law marriage can exist if the following elements are present: There is an agreement, express or implied, presently to be husband and wife. The couple are living together in cohabitation as man and wife The parties hold each other out to the public as husband and wife

Correction deed

used to correct a prior erroneous deed to correct a mutual mistake made in The original deed through consideration is required.

Types of remainder interests: vested / contingent

vested, meaning that it is certain to become possessory in the future, and cannot be divested. Contingent - either someone hasn't been Identified or most likely the person in the remainder interest has not satisfied a condition.

Right of First Refusal

If there is a ROFR, this means that before the seller can sell to anyone else the tenant has the right to match or exceed the offer on the table to buy the property. Owner is required to make a reasonable disclosure of the terms of the proposed sale.

Rule Against Perpetuities

Perpetuities and monopolies are contrary to the genius of a free gov, and Shall never be allowed, nor shall the law of primogeniture or entitlements ever be in force in this state.

Wills

Person conveying the property by will conveys his property to a definite grantee.

Statutory estates

Personal

Payment

Principal pmt every month that is due

Note / Guaranty

Promissory note (promise) / Guaranty - deed of trust (real property collateral)

Pros and cons of using form contracts

Pros: Neutral Ready made treatment of details Prorations Inspections Performance dates Many others Local real estate boards are a good source. Up to date with current law. Generally neutral between buyer and seller. Cons May treat some issues too lightly Perpetual struggle on contract detail Attorneys: more detail reduces future disputes Brokers: Long contracts put a chill on negotiations General familiarity with the NTCAR Commercial Contract of Sale (and provisions discussed in class)

Purchaser's rights & obligations under a contract

Purchaser: Right to obtain clear & marketable title Receive property and improvements in same condition as when contract was signed To terminate in certain situations Obligated to pay purchase price

Option contracts

Requires consideration before contract can be binding Usually a unilateral contract : only signed by the seller because he is the only party to be charged in performance. The seller offers the buyer the option to buy a property by a specified period of time at a fixed price. The buyer purchases the option to buy or not buy the property by the end of the holding period

Special Warranty Deed

Same language as a general warranty deed but only covers during the Period of time for which the seller owned it. (used more in commercial real estate)

late fees

The charge borrowers pay if they are late on their payment. Paying extra for not paying on time.

Quitclaim

Which the grantor quitclaims unto the grantee all of his rights, title, and interests In the property. Grantor does not claim to have any interest but is saying that if he does have Any interest in that property, he conveys it to the grantee. Quitclaims have value because its Used to help clear up any clouds of title.

prepayment right

a right a consumer has as the borrower to repay the loan at an earlier date / ahead of schedule without incurring any penalties.

Community property / separate property

any income from separate property or any offspring of said community property is community property. This does not include the increase in value of Separate property after marriage.

Cemetery lots / perpetual care funds

are established as charitable trusts, which are specifically exempt from the Rule against perpetuities.

Life Estate

is an estate for the life of some person, along with a second estate that is termed a remainder interest.

Trustee's deed

is generally thought of as a foreclosure deed. Title is perfectly valid, and it Contains all the covenants of general warranty, which bind the previous owner, not the trustee.

Leasehold

ownership of a temporary right to hold land or property in which a lessee or a tenant holds rights of real property by some form of title.

Fee on condition subsequent

the distinction is that the fee on conditional limitation has an automatic reversion upon the happening of that event, but the fee on condition subsequent. Gives the grantor the right to terminate the estate by reversion, rather than the automatic reversion provided for by the fee on conditional limitation. (right of reentry)

Freehold estate

the estate continues beyond the life of the holder and descends to their living heirs upon death as specified by the will or by law

Types of life estates

Regular, Pur autre vie, Homestead

Assignment

Assignment of contract takes place when one party to a contract (the assignor) transfers the legal obligations of the contract to another party. The recipient of the assignment (the assignee) then assumes responsibility for the terms of the contract.

Competency of minors:

At least 18 yrs old Sane Sober Read and understand contract

Bargain & sale / deed without warranty

Contains no warranties at all. Does purport to Convey property. Grantor conveys whatever interest the grantor has.

Statute of Frauds / oral agreements

Contract is not enforceable unless: In writing Signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.

Right of redemption

Debtor has right of redemption; the debtor has the right to buy back his propertyIf he pays the statutory penalties for doing so.

Estate in Land

Defines the degree, quantity , nature and extent of an owners interest in real property

Involuntary conveyances: Eminent domain / condemnation

Eminent domain - whereby property may be taken for a public purpose. And there must be Compensation. Condemnation - is the process of which eminent domain takes.

Types of deeds

General warranty, Special Warranty, Bargain & sale / deed without warranty, Quitclaim, Trustee's deed, Sheriff's deed, Correction deed, Deed in lieu of foreclosure, Statutory and legal requirements for a deed

Term

How long it will be held for

Seller's rights & obligations under a contract

Seller: Right to receive sales price Obligated to deliver clear & Marketable title To maintain property until closing To pay broker commissions

Inspection rights of buyer

Should be specific provisions made for remedies Representations are often omitted by granting purchaser a right of inspection prior to closing, and agreeing to buy property as is.

How long are funds from the sale of a homestead protected?

Six months

Closing

The final step Miscellaneous provisions contained in the contract form "magic words or phrases"

Fee on condition precedent

.title is passed by a deed such that the title will not take effect in the named grantee until a condition is performed.

Statutory periods for enforcement of a contract / statute of limitations / laches

2 years for oral and 4 for written laches : unreasonable delay

4 Elements of a contract / 2 additional elements for contracts involving real property

4 Elements of a contract: Competent Parties, Consideration, Legal subject matter, and mutual assent 2 Additional Elements: In writing and proper description of property.

Types of freehold estates

Fee Simple, Life Estate, Fee on conditional limitation, Fee on condition subsequent, Fee on condition precedent

Electronic transactions

A contract may not be denied legal effect solely because it is in electronic form or because an electronic signature was used. You might have a binding contract if you reply to an offer letter "ok." Texas uniform Electronic Transaction Act contracts to be written and signed electronically.

Permanent mortgages: fully amortizing, partially amortizing, interest-only

A fully amortizing loan is when a loan gets fully paid off at the end of its term.

Homestead

A place where you live, or a place to exercise the calling or business for a family Or single adult person.

Allowable liens against a homestead: Limitations on homestead: rural and urban

A rural homestead shall be not more than 200 acres In one or more parcels and must include the home; An urban homestead shall consist of a lot or Contiguous lots amounting to not more than 10 acres of land, together with any improvements.

Waiver

A waiver of notice is a document individual sign which legally waives their rights to receive formal notices regarding certain probate issues

Installment Contract / Contract for Deed

An installment land contract is a contract for the sale of real estate that extends over a long period of time. It is a contract entered into between the buyer and seller to deliver a deed at some future date. The seller retains legal title, and the purchaser gets an equitable title to the property.

Seller's representations

Care should be taken to see that representations are clearly stated Are often omitted by granting purchaser a right of inspection prior to closing, and agreeing to buy the property as is.

Casualty & condemnation

Casualty or Condemnation Event means any taking under power of eminent domain or similar proceeding and any insured loss, in each case, relating to properties or other assets

Exceptions, reservations, covenants

Exceptions - are deficiencies in the title that the grantor has at the time of conveyance. This would Include things like: easements, mineral rights held by third parties, right of way, deed restrictions. They would be expected from the legal title conveyed because they are not part of the fee title that The grantor holds. Reservations - might be mineral rights or an easement reserved to the seller. Covenants - are clauses in deeds that are usually given or received as consideration for the transfer Of title. Ex: Grantee agrees not to construct any odorous industrial plants on the property.

Homestead exemption for personal property

Home furnishings, provisions for consumption, farming or ranch vehicles, tools equipment or books, Wearing apparel, jewelry not to exceed 25 percent of the total limitations

Legal v. equitable title

Legal: Ownership of freehold estate Equitable title: right to obtain legal title

Merger Doctrine

Most contracts contain a provision that the contract must embody the entire agreement and that there are no other oral or written agreements. Once the sale has been closed and the deed has been transferred, the earnest money contract has no force or effect whatsoever.

"bad-boy carve outs"

Most non-recourse loans include exceptions (or "carve-outs") within the loan documents that result in full-recourse liability to the borrower and the guarantor when certain "bad-boy" behaviors exist.

Survey and title review

Much more than just title to property Encompasses all matters that affect the title and use of the property All encumbrances (beyond exceptions) are subject to buyer approval. Requires the seller to cure all title defects prior to closing If not, the buyer may terminate the contract or accept title in current condition.

Statutory and legal requirements for a deed

Must be in writing, signed by both parties, words of Grant showing a present intent to convey, property must be identifiable, and properly delivered.

Earnest money / escrow agent

No legal requirement for earnest money in a contract If buyer defaults, earnest money should go to seller Title company usually serves the escrow agent If the seller defaults, earnest money is returned to the purchaser Escrow agents seldom release money without consent of both parties. .

What is an offer / acceptance

Offer must be: Communicated to a specific offeree, intended to be a serious offer, definite enough to be accepted by the offeree. Acceptance must be unconditional and communicated.

Tax sales

Only sale of real property taxes in Texas is for ad valorem taxes. Federal gov can sell anything to recover its tax debt. If homeowner is older than 65 years old, no sale can take place while the person still Owns the house.

Voluntary conveyances: deeds & wills

Real estate ownership has to have something that had to evidence title, and something had to transfer that title, short of armed combat.

Rules for construction of contracts

Reasonable time - fact question a jury can decide Validity - contracts are construed in favor of upholding the contract Four Corners Doctrine - instrument must be read in its entirety Interlineations - stand on an equal footing with remainder of contract Against Maker - unclear provision court will rule against maker Parol Evidence Rule - oral evidence or additional writings not allowed Printed Versus Typed - typed over printed and handwritten over all Effective Date - when both parties have signed or broker inserts date.

recourse/non-recourse

Recourse is when the bank / lender has recourse on your personal property and come after everything you own. Non-recourse is when the lender can only come after what your entity/business owns (the collateral) and not everything else you own personally.

Contract contingencies

Some contingencies are not vague or ambiguous, but they may also be complicated by unexpected legal problems. If the terms are too one-sided, the court may even refuse to enforce them.

Survival

Survival clause specifies which contract provisions will remain in effect after the termination or expiration of the agreement. Common obligations covered by Survival clauses include Confidentiality, Non-Competition, and Effect of Termination.

Foreclosure

Texas Standard deed of trust form, used in the great majority of mortgage Transactions, contains a "power of Sale" clause.

Title theory v. lien theory -

Texas is called a lien theory state (homeowner has legal title, lender has Lien on property until its paid off. Those states that recognize the lender as legal title holder to the property are called title theory states.

Effective date

The final date of acceptance is the date on which the contract becomes binding between the parties. It is the date that both buyer and seller have agreed to all terms of the contract and have executed the contract.

Fee Simple

The highest interest in real estate recognized by the law; the holder is entitled to all rights to the property.

General Warranty Deed

The most widely used deed in this state and ensures the highest warranty the law recognizes. "Good warranty". Covers the property's entire history.

not recorded

The real estate lien note is normally not recorded.

Measuring life / remainder

The time of a person until he/she dies. Remainder interest entitles the Remainderman to possession of the property at a future date, is another separate estate. Ex: In the deed I convey my house to my brother for his life; then upon his death it would pass to my wife. This creates life estate to my brother and a remainder interest in my wife.

Forms of payment

There are multiple ways of payment but some of the most common: All Cash, cash / financing, All financing.

Consideration

Thing of value given for a promise Does not have to be money (Could be love and affection)

Oral agreements:

Three requirements to enforce an oral earnest money contract, and they all must exist simultaneously: Must be payments of the consideration; and Possession of the property must be taken by purchaser; and Purchaser must have made payment and valuable improvements on the property with the seller's consent.

Unilateral / Bilateral contract

Unilateral: - Promise for performance Bilateral - Promise for a promise

Time is of the essence

Unless a contract clearly indicates that time is of the essence, it will not be constructed to be so. Option contracts: Time is always of the essence

4 possible legal effects of a contract

Valid - has all essential elements, and enforceable by both parties. Void - contract that never was, no legal effect. Voidable - may be void by one party (minor) Unenforceable - cannot be enforced by either party, not performed in statutory period.

Default

When a borrower cannot pay / stops paying their loan. Loan goes into default.

Intestate succession

When a person dies leaving no will, it is said she has died intestate. All of the property passes purley by operation of statutory law, often called the statutes of Descent and distribution.

Holographic will

Written wholly in the handwriting of the testator. Does not require any witnesses , also can have a self-proving affidavit, and is by all means a valid, binding will

Formal will

be in writing, signed by testator or by another person for him by his direction and His presence, and be attested by two or more credible witnesses above 14 yrs old.

Statutory Estate

created by law with variations at the state and local level. Legislation that states the right of people towards. Specific property without needing to have a claimant's name on the title.