Law pamphlet

Patent

(Conveyance) Conveys real property from the state or federal government to an individual or privately held company.

Types of Deeds

1) General Warranty Deed- most commonly used deed because it offers the most warranties of ownership. It warrants title, not only during the grantor's ownership but during the ownership of all prior owners. The warranties, also called covenants of title, apply to the title of the property, not to the property itself or any improvements on it. The usual covenants of title are covenant of seisin; covenant against encumbrances; covenant of quiet enjoyment; covenant of further assurance; and covenant of warranty forever. 2) Special Warranty Deed- Guarantees the same things as a general warranty deed but only for the period during which the grantor owned the property. 3) Bargain and Sale Deed- Contains none of the regular warranties found in a general or special warranty deed, but the grantor does acknowledge that she has an interest in the property and warrants that she has done nothing to cause a defect in title. 4) Quitclaim Deed- Gives no warranties to the grantee, not even that the grantor has an interest in the property. Basically, a grantor uses this deed to convey whatever interest he may have in the property, while not guaranteeing any interest at all. Quitclaim deeds are often used to correct defects in a title and between related parties. 5) Sheriff's Dee- Transfers real estate sold at public sale such as in a foreclosure. There are no warranties or representations. 6) Trust Deed-Not a deed at all, but a finance instrument. It is used to secure the loan that the grantor, that's the borrower, takes out to purchase the property. The lender is the beneficiary of the trust. Upon payment of the loan in full, a third party, a trustee will release the lien on the title to the grantor, usually by filing a release of lien and a reconveyance deed. In the event of a foreclosure, the beneficiary will instruct the trustee to exercise the power to sale. Up until five days prior to the date of sale the grantor has the right to reinstate the loan by bringing it current. The beneficiary does not have the right to accelerate the loan until after five days before the sale.

Foreclosure

1) Judicial-Court issues a judgment against a debtor in favor of a creditor, that judgment is enforced through the issuance of a 'writ of execution'. A writ of execution allows for the sale of the debtor's real or personal property by a sheriff and for the distribution of the proceeds of the sale to the creditor. In Oregon, a creditor can pursue a 'non-judicial foreclosure.' 2) Non-Judicial. Non-judicial foreclosure allows the lien holder to commence sale of the mortgaged property without a writ of execution or any court permission or supervision. In order to foreclose outside the judicial system, the lien must contain a 'power of sale clause' allowing the lien holder to foreclose outside the courts; and the lien holder has to give the debtor notice of the sale and has to make public notice of the sale, usually through a newspaper of record. 3) Reinstatement-Allows the property owner to stop foreclosure proceedings and retain his or her title by paying the obligation in full (or at least enough to bring the obligation current). 4) Redemption-Very similar to reinstatement. In fact, equitable redemption is the same thing as reinstatement, allowing the property owner to reclaim title during foreclosure proceedings by paying either enough to bring the obligation current or the entire amount of the obligation. Statutory redemption allows the property owner to reclaim title to the property after the foreclosure sale has occurred by coming up with the money by a certain deadline. Not all states allow redemption. Oregon allows redemption within 180 days after notice of foreclosure, but does not allow redemption at all after a non-judicial foreclosure is complete. In other words, Oregon allows equitable redemption and, possibly, statutory redemption in the case of judicial foreclosures. Oregon does not allow statutory redemption for non-judicial foreclosures. 5) Deficiency Judgment-Sometimes the proceeds of a foreclosure sale will not cover the amount of the obligation, or, more often; they will not cover the amount owed to junior creditors. In this situation, any creditor who did not receive full or any repayment out of the sale proceeds can seek a deficiency judgment. A deficiency judgment is a finding by a court that the obligations secured by a lien on property were not satisfied out of that property. The finding results in a general lien against all of the debtor's property. Oregon does not allow the holders of purchase money liens to file for a deficiency judgment. Thus, if you owe $300,000 on the mortgage you used to purchase your house, and it only brings in $250,000 at a foreclosure sale, your mortgage lender may not seek a deficiency judgment for the remaining $50,000. D. Extinguishment-Sometimes a lien may be extinguished, or terminated, by operation of law. This usually happens when the government purchases a piece of property with liens on it.

Financial Encumbrance Types

1) Liens- charge or a claim against property as security for a debt or obligation. Can be created by contract, as in a mortgage, or by operation of law, as with a property tax lien. A lien may be general or specific. A general lien applies to all the obligor's real and personal property. Property taxes and construction liens are specific liens and affect only a particular property. A general lien would allow a lien to be placed against all properties belonging to a property owner. 2) Mortgages- A lien against real property. There are two theories as to the effects of mortgages: lien theory and title theory. Lien theory=mortgage does not transfer ownership in the real property, it merely encumbers title. Title theory= the holder of a mortgage is the owner of the property until the mortgage is paid off by the debtor. Oregon is a title theory state and does not use mortgages to evidence debt at all, but rather trust deeds, which serve the same purpose. 3) Judgments- By a court against a property owner can result in a judgment lien being placed against a house in the amount of the monetary award. A deficiency judgment results in a judgment lien. Priority-Determines which lien holder collects first when one more than one lien exists against the same property. Generally, priority of liens is established by order of recordation. "first in time, first in right." The first person to record has priority over the second person to record, even if the second person acquired a lien before the first. There are a few exceptions to this rule: Federal tax liens have priority over all other liens, then state and local tax liens have priority, and then purchase money liens. A purchase money lien refers to the mortgage taken out to purchase the home. As well, certain statutory liens like construction liens can have higher priority than earlier recorded liens if they meet certain statutory requirements. Lis pendens is a public notice of a court suit pending on real property.

Types of Policy

1) Owner's Policy- Issued to the new owner. Protects the owner and the owner's heirs and devisees. The policy insures the value of the property at the time of purchase, and imposes certain duties on the insurer such as the duty to defend and the duty to indemnify. The scope of the typical owner's policy is covered in the following section. 2) Lender's Policy-Insures only the amount of the lender's loan, which is usually less than the full property value. It may also insure against loss of priority. A lender's policy terminates when the mortgage is paid in full, and it usually contains no duty to defend. Otherwise, the scope of a lender's policy is much the same as the scope of an owner's policy. 3) Leasehold Policy-Insures a tenant or a lender making a loan secured by a mortgage on a leasehold estate. Usually for commercial real estate context. The policy covers certain types of losses particular to long-term leases such as relocation expenses in the event of an eviction not caused by the lessor, or rent or damages due a landlord with superior title to the landlord party to the lease contract.

Comprehensive (Master) Plan

A 20 year plan to anticipate change. Zoning regulates and controls how land is used. Permits uses Lot Sizes Types of Structures. Building Heights. Zoning- Structural Styles, Density (How close homes are) Protection of natural resources. Zoning Classifications-Residential, commercial, Industrial, agriculture.

Building and Housing Codes

A building code regulates the construction of improvements to raw land. A housing code is the same thing as a building code, but applies retroactively to improvements existing before the building code was enacted. In Oregon, building codes are adopted by the Oregon Building Codes Agency. The agency may also enforce building codes, as in places where the city or county does not enforce the building code, the state steps in. In most cases, if the improvement complies with building codes, it complies with housing codes. Building and housing codes represent the vast majority of land use regulation. These codes are designed to ensure the safety of the public, covering things like permissible building materials, fire hazard standards, and potable water standards. Typically, it is building and housing codes that require property owners to obtain permits to develop new property improvements or even remodel existing ones. As well, these codes require inspection to ensure compliance during and after the construction process. Building codes are designed to ensure safe building techniques. Structural failures, fire hazards caused by electrical and heating systems, and electrical shock. They also help eliminate costly repairs for shoddy work and save money in the long run.

Demise

A conveyance of a lease for a period of years. Any demise that specifies a term of lease greater than one year must be written; otherwise, it violates the statute of frauds and is invalid. The statute of frauds requires that transfers of real property be in writing. Tenancy for Years-A tenancy in which the property is leased for a fixed period. The tenancy (estate) for years must have a definite term, beginning and ending on dates specified in the lease. Periodic Tenancy.-No fixed termination date. Instead, the periodic tenancy lasts for a specific period (for example, one month) and continues until either party gives proper notice of termination. Renews itself automatically, in the absence of proper notice. A tenancy for years may be assigned or sublet unless the lease agreement states otherwise. In Oregon, there are two types of periodic tenancies: a tenancy from year to year, and a tenancy from month to month. (must give 60 days before termination or 30) Tenancy at Will- A leasehold estate with no written or oral lease agreement. Has no definite termination date, but notice is required to terminate the tenancy at will. Since there is no termination date, notice is made in reference to the frequency of rent payments. For example, if rent is paid every week, then both parties must give one-week notice before terminating the lease. A tenancy at will automatically expires upon the death of either party. Tenancy at Sufferance- When a tenant holds over after the expiration of a lease without the landlord's consent as where the tenant fails to surrender possession after termination of the lease. It is intended to prevent the acquisition of title by adverse possession. Like a trespasser, a tenant at sufferance is in possession of the property without the property owner's permission, but do not confuse this with trespass. There is no trespass in this situation because the tenant had permission to enter the property when he did. Tenancy by the Entirety-Husband and wife each have a joint, undivided interest in the whole property. Tenancy by the entirety, unlike tenancy in common, has a right of survivorship. Upon the death of one spouse, the survivor succeeds to the entire property to the exclusion of heirs and creditors of the deceased spouse and without the need for probate. Neither spouse can convey his or her interest or force a partition during the lifetime of the other, without consent; tenancy by the entirety can only be terminated by mutual agreement, divorce or joint conveyance. Whenever a husband and wife's names appear on a deed, it is assumed that their interest is by the entirety.

Covenants (Restrictions)

A covenant is a promise to do or not do something with or on a particular piece of real estate. (CC&Rs. Covenants, Conditions and Restrictions) all of which are promises to do or not do something on land. Covenants usually restrict what a property owner may do with his or her land, but they don't always. 1) Personal. Like easements, covenants can be personal or they can run with the land. As it sounds, a personal covenant binds the landowner to do something that may or may not have anything to do with real estate at all. 2) Running with the Land. Much more common are covenants that run with the land. This means that the covenants benefit or bind successive owners of the property. In order for the burden of a covenant to run with the land, the covenant must have been created in writing between a grantor and grantee of the property. 3) Private Restrictions- A deed restriction imposed by the owner of the property or some other private party like a homeowners' association. Could place a condition containing a reverter clause as an enforcement device to maintain the restriction. C. Encroachment- The trespass of some improvement or object on another person's property. Most encroachments are innocent in nature, such as when a neighbor mistakenly plants a vegetable garden in a part of another neighbor's unfenced yard, and they are generally only discoverable through a property survey. However, encroachment can have serious consequences. For instance, a permanent or large encroachment can cloud title by making it unclear as to who the proper owner of the land is. What's more, encroachment may create an easement by prescription or cause title to the encroached upon land to transfer by adverse possession. When an encroachment clouds title, the issue is usually resolved by a suit to quiet title or a suit. D. Stigmatized Properties-Can be in flawless physical condition but may nevertheless present unusual marketing issues. For instance, properties which may have been the site of a murder, suicide, or reportedly inhabited by ghosts. A property with a condition which is psychological in nature, rather than a matter of bricks and mortar is considered stigmatized. A seller is not required to disclose the occurrence of a murder, suicide or death by AIDs at the property they wish to have put on the market to sell. For example, a house is stigmatized if it has been used as a chop shop, drug den or brothel. In the case of drug dens, some drug addicts may inadvertently come to the address expecting to purchase illegal drugs. A seller is required to disclose if a property has been used to manufacture or supply illegal drugs. The property will have to receive a certificate from the DEQ stating the property is free of hazard waste and can be inhabited.

Deed

A document that transfers ownership of real property from one person to another. It identifies the property, who owns it, any liens or encumbrances on it, and what restrictions may exist on its use. There are different types of legally acceptable deeds. The type of deed determines which warranties, if any, the owner is making about the property. Elements of a Deed: Written Document, Signature of Grantor, Competent Grantor,(voidable if doesn't meet this. A voidable deed can be set aside at later legal proceedings, but will stand if left unchallenged.) Identifiable Grantee, ("Identifiable" means that the grantee must be alive or in existence (in the case of a legal entity like an estate, trust, or corporation) at the time the deed is executed. The grantee does not have to be competent, i.e. of age or of sound mind.) Property Description, Words of Conveyance, Words of conveyance are contained in the. The words must express the grantor's intention to convey the property. Statement of Consideration, even if the consideration is token consideration as it might be between family members. Land Use Disclosure Clause, Acknowledgement, Delivery and Acceptance. Habendum Clause. (a statement of the quality and quantity of the interest in the real property being conveyed. The clause is not required in a deed, and in its absence, it is assumed that the property is being conveyed in fee simple absolute. If the grantor intends to transfer a life estate, an easement, or some lesser estate, he must state that in the habendum clause.) Recordation- Though there is no requirement that deeds be recorded, they generally are since doing so provides constructive notice that the deed, evidencing ownership, exists. If the deed is to be recorded, it must meet the requirements for recording, including acknowledgement, and it must be recorded in the county where the real property is located.

Estoppel

A legal doctrine by which a person is prevented from asserting rights or facts that are inconsistent with a previous position or representation. Estoppel by deed would be if a person who, without having legal title to a property, deeds the property to another and then subsequently obtains good title to the property. The grantor is then estopped from denying his or her lack of title at the time of the original conveyance, thus automatically vesting complete legal title to the grantee.

License

A license is similar to an easement in that it is a personal right to use another person's land. A license does not follow title. The main differences between a license and an easement are that a license is revocable by the grantor and it need NOT be in writing.

Title Search

A major duty of an escrow agent is to perform extensive title search and issuing a title insurance policy based on the results of the title search. A title search is an examination of all pertinent public records relating to a particular parcel of property and is NOT required by law. It is done to ensure that the seller is conveying what property rights he or she claims to be conveying and that he or she has the right to do so. A title search precedes and is necessary to secure title insurance. A. Chain of Title- History of all public recorded documents pertaining to the title of a particular piece of property. Secures title insurance. B. Abstract of Title. An abstract of title is a condensed version of the chain of title. Sometimes an abstract of title is sufficient to secure title insurance. C. Title Certificate- written statement issued by the title examiner as to the status of the title. D. Title Plant- Refers to the room within a title insurance company wherein all public documents pertaining to real estate are kept usually within the county in which it is located. E. Torrens Title System-The state maintains a register of land holdings, and guarantees indefeasible title (good title) to properties listed on the register. Negates the need to prove the authenticity of a chain of title. Oregon does not do this, but uses Title Plants.

Master Plans

A master plan is a comprehensive plan to guide the long-term development of a particular area.

Escrow

A neutral third party holds money and documents during the course of a transaction. Must have a binding contract between parties. An escrow agent works through a title company, so the escrow agent is also a title insurer. Close of escrow= completion of transaction. Pursuant to Oregon Administrative Rules, the listing real estate broker may close escrow under the supervision of the principal broker (typcially escrow agent does this though) Typically, the parties provide written instructions for an escrow agent to close escrow and carry out many other duties of escrow. In commercial transactions, escrow might be closed by the agent or by an attorney. An escrow agent may accept funds into escrow without the services of a real estate broker Performing the duties associated with escrow is time and cost intensive, and a broker may not charge for closing escrow unless he or she also possesses an escrow license. Second, allowing an escrow company to close the transaction shifts liability the escrow agent, who must be licensed and bonded to do business. Finally, as mentioned already, escrow agents are usually in the employ of title companies, which means that they have access to all the title documents necessary to proceed with the transaction. Prorated items At closing an escrow, officer prorates the property taxes, depending on the time of the year the seller will either be charged for their portion of the year's taxes or credited back if they have already paid the taxes for the year. If the property is a rental the tenants rent and security deposit will be credited to the buyer. If the buyer assumed the sellers loan, the escrow officer would also charge the interest on the loan to the buyer at the time of closing and credit back any balance to the seller.

Home Warranty

A new home warranty is an agreement by the seller that the seller's product (in this case, a newly built home) is free from defective materials or poor workmanship. A warranty includes a promise to repair or replace any defective items and faulty work. Generally, a warranty does not cover items that become defective as a result of homeowner neglect. Repair or replacement under a warranty is satisfied by meeting building industry standards. 1. Structural Defects Protects the homeowner against the failure of the structural components that support the house. Examples include: •the foundation •studs •beams and joists 2. Major Home System Failures Protects the homeowner against the failure of major home systems: •plumbing •electrical •heating •air-conditioning It may also protect against the failure of certain major appliances and other systems. 3. Workmanship A new home warranty promises to repair defects in workmanship. Additional warranties (other than the New Home Warranty) may be available from a contractor or the product manufacturers on items such as, dishwashers, furnaces, siding, or roofing.

Voluntary Conveyance

A person transfers ownership of property by means of a deed. The person who is transferring the property is the grantor and the person to whom the property is being transferred is the grantee. There are various types of deeds, but all deeds must meet certain requirements. Sale (consideration), gift (Without consideration), devise (testamentary document), Dedicate (public purposes) 2 types: 1) Common law dedication. May be express or implied. If a landowner dedicates land expressly, he or she does so by deed. The public must accept the dedication. Implied dedication occurs when a property owner allows the public to use his or her property. 2) Statutory Dedication. Statutory dedication is accomplished by recording a subdivision map that expressly indicates those areas dedicated to the public, such as parks and streets.

Short Sale

A process which allows the borrower to sell the home for less than what is owed on the mortgage loan, and allows the seller to avoid having their credit score hit with a foreclosure penalty. Although, there is still a penalty given for short sales, the time to repurchase a home is shortened with a short sale versus a foreclosure. A foreclosure can stay on a credit report for up to 7 years while a short sale can range 3 to 5 years. Depending on when the short sale is completed, the IRS may consider your debt forgiveness as taxable income. The homeowner must be "upside-down" in their loan for the lender to be interested in a short sale. he average cost to a lender for foreclosure runs around $50,000, so there is some incentive for them to consider a short sale offer if the numbers work. They may use a AVM (Automated Valuation Model) or a BPO (Broker Price Opinion) or both to determine the price at which they could sell the property in foreclosure. Banks lose about 20 percent on each dollar when a short sale is conducted, versus 40 percent lost on each dollar when a full foreclosure is conducted. An Oregon real estate broker may handle a short sale if he or she does not charge any special fees related to the short sale.

Remainer Estate

A remainder estate is the interest held by the person who acquires full ownership of property on the death of a life tenant. It is a future estate, and the holder of the estate has no ownership rights until the death of the life tenant. A remainder estate may be vested or contingent. It is vested if the only uncertainty is the actual date of the termination of the prior estate. It is contingent when there is some other uncertainty. Conveyances after Death- In the event the property owner dies and has a will directing the transfer of their property, it is considered testate. When a property owner dies without a will the estate is considered to be intestate. Without a valid will to direct the transfer of the property it will be considered in escheat. (the reversion of land ownership to the state when there is no will or heirs. After carefully searching for a rightful heir and failing to find one the state has the right to sell the property.)

Oregon Trust Deed Act

A residential trust deed is a trust deed on property with four or fewer residential units, one of which the grantor, the grantors spouse or the grantors minor or dependent child occupies as their principal residence. There are three parties in a Trust Deed: The grantor conveys an interest in real property by means of a trust deed as security for the performance of an obligation to the beneficiary. A beneficiary is the financial support designated in a trust deed as the person for whose benefit a trust deed is given. A trustee is a person, other than the beneficiary, to whom a trust deed conveys an interest in real property, or the person's successor in interest, or an employee of the beneficiary, if the employee is qualified to be a trustee under ORS 86.705-795.

Appurtenances

A right that belong to and is conveyed with a particular piece of real property. It is used with the land, and generally for its benefit. A right or privileged associated with ownership of real property. (Item or right that goes with your land.) Air rights, water rights,(1) Doctrine of Appropriation. Oregon, like many western states, distributes water use rights according to a system of appropriation. The doctrine governing the system, often characterized as "first in time, first in right", dictates that the property with the oldest established and legitimate claim to water has the right of continued use of the water. mineral rights, recorded easements,The right terminates after five consecutive years of non-use) Emblements (The vegetation growing on a piece of land is classified as real property. If the vegetation has been intentionally planted, the plants are known as emblements, and considered personal property. include fruit and vegetable crops and timber.)

Profit

A right to enter upon someone else's land and remove sand, dirt, and any other part of the soil of a parcel of land. Like a license, a profit is personal to the holder of it, and it can be revoked by the grantor.

Eviction

A tenant may be actually or constructively evicted. If a tenant is evicted through a legal process, the tenant has been actually evicted. The legal action that results in the eviction is known as a forcible entry and detainer (FED). After the FED is issued, the tenant receives a notice of restitution, telling him that he needs to vacate the premises within a certain time. When a tenant is evicted, the landlord may exercise the right of distraint to recoup the costs of eviction and unpaid rent. Distraint is the seizure of personal property for security on a debt or in satisfaction of a claim. If a landlord otherwise forces the tenant to abandon the property, the tenant has been constructively evicted. Most commonly, constructive eviction occurs when, due to landlord neglect, the tenant is unable to occupy the leased premises for the intended purposes. As well, a constructive eviction can occur when a tenant's right of quiet enjoyment has been breached. The right of quiet enjoyment is the right to possess the property undisturbed by any third party including the landlord or any third party agent of the landlord.

Building Construction

A wood frame building is the most common type of home construction. It is popular because of its low cost, ease and speed of construction, and flexibility of design. Almost all modern building foundations are made with reinforced concrete. Concrete has the advantages of low cost, plasticity, and high compressive strength. The wider part of the base of a foundation wall is called the footing. This supports the weight of the structure. The sill plate is the board that is attached to the top of the concrete foundation. The framing of the house rests on the sill plate. Framing is usually constructed of wooden boards although the use of metal framing is becoming more common. "Dry" lumber, rather than "green", is considered superior for framing because it is less prone to warping. The size and length of framing members varies, depending upon their particular application as girders, joists, studs, rafters, and so on. Joists are the parallel boards used to support the load of the floor and ceiling. Vertical members called studs are attached to the sole plate, which is a horizontal board that rests on the floor joists. Exterior sheathing is the covering applied to the outside of the frame. The most common exterior sheathing is plywood panels four feet wide by eight feet long and adds shear strength to the walls. Shear strength is the capacity of a wall to resist a sideways racking force, and it is normally provided by corner bracing in the frame. The outside, visible finish layer of the building is the exterior siding. It can be plywood, boards, vinyl siding, shingles, or other materials. The two most important characteristics of siding are its resistance to weathering and its aesthetic appeal. The covering applied to the inside of the frame is called the interior sheathing which is applied to the walls and ceilings. The most common interior sheathing now is drywall, which consists of a plaster core covered by paper on each side. The advantages of drywall is that they come in standard sizes such as 8 ft. by 4 ft. or 8 ft. by 12 ft. Sheetrock and wallboard are two common drywall products. The joints between panels are hidden by covering them with a strip of tape imbedded in a plaster-like filler and is called "taping" the joints.

Non-Financial Encumbrances

A. Easements- A limited right to use another person's land for a particular purpose. 1) Servient and Dominant Estate. The servient estate is the land that is encumbered by the easement. (sometimes referred to as the servient tenement.) The dominant estate is the land that benefits from the easement. It is sometimes referred to as the dominant tenement. The easement is necessary for the dominate estate to have ingress and egress to an otherwise land-locked parcel of land. Without the easement the dominate tenement can, by use, create an easement by necessity.

Involuntary Conveyance

A.Foreclosure is the transfer of property from one person to another by means of a court order, called a writ of execution, against the wishes of the owner. Foreclosure can occur under a variety of circumstances, but most often occurs when the property owner fails to pay taxes, fails to pay the mortgage or declares bankruptcy. B. Condemnation results in the transfer of real property from private to public hands, the transfer is not voluntary. Condemnation occurs through eminent domain proceedings. C. Adverse Possession is acquiring ownership through occupancy. It causes the transfer of land from the legal owner to the occupying possessor. He or she must: 1) possess the property in an actual, open, and notorious manner. 2) Possess the property in a way that is hostile to the legal owner's interest in it. 3) Possess the property exclusively. 4) Possess the property continuously for 10 years (tacking counts)); and 5) possess the property under claim of right or color of title. All five elements must be present for adverse possession to transfer title. Title to government property can never be acquired by adverse possession. D. Escheat. If a person dies and the probate court is unable to locate any heirs or devisees, then title to the deceased person's property is said to escheat, which means that it transfers back to the state. Escheat can also occur when a living property owner abandons his or her property.

Property Loss by Natural Accession

Accretion- (Additional) Gradual addition of land by deposits of sand or soul washed up naturally from a river, lake or sea. Alluvium- (Alluvion) The actual soul increase resulting from accretion. Avulsion- (Loss) The sudden loss of land by the washing away of land due to natural forces Reliction- The uncovering of land by a gradual subsidence of water. Not seasonal waterlines. Over time property lines can change. Erosion- The gradual removal of soil by currents, tides, wind or glacial ice. Real property boundary lines can change due to this.

Regulations

All land use regulation (zoning) and planning stems from a government's constitutionally granted police power - the right of local government to preserve the health, welfare and safety of its citizens. Government police power and the government power of eminent domain are two distinct powers - one allows government to regulate land use; the other allows the government to take ownership of land after compensating the owner. Land use regulations and planning decisions are subject to 'due process.' This means that the laws and regulations can only be enacted after notice to the property owners affected by the regulation and that the owners must have an opportunity to appeal the decisions.

Personal Property Taxation

All personal property is subject to taxation at 100% of its real market value as of January 1 of the calendar year. Any manufactured structure or floating home is considered a vehicle and subject to personal property taxation, unless its owner also owns the land it sits on. If that is the situation, the manufactured home or floating structure is considered and taxed under the real property taxation system. If the manufactured structure is owned as well as the land that it sits on, the manufactured home and land are recorded in the county deed records as real property. An owner of a manufactured home can exempt their home as real property if they have a 20 year lease on the land or park space where it is sited by contacting the County Assessor's office, Building Code Department.

Covenants

An agreement or promise between two or more parties in which one party pledges to perform or not to perform specified acts on a piece of property. 1) Covenant of seisin- Warrants that the grantor does in fact own that interest in the real property he claims to own, and that he has the right to convey the same. It is sometimes called the covenant of the right to convey. The covenant is not broken if there is a lien on the property. 2) Covenant against encumbrances- Warrants there are no encumbrances against the title except for those stated in the deed. It covers all encumbrances, including those that are unknown to the grantor. 3) Covenant of quiet enjoyment- Guarantees that the grantee will not be disturbed by others claiming to have a lawful interest in the property. Free of interference from the acts or claims of third parties. Breached only by an eviction, actual or constructive, by reason of a claim on the title superior to that of the grantor. 4) Covenant of further assurance- Requires that the grantor execute any documents that may be needed in the future to make good the title to the grantee. 5) Covenant of warranty forever- The grantor promises that the covenants will not lapse after a certain period of time that they are good forever. E. Patent-Title to all real property in the United States originated with the federal government. At some point, title to individual parcels passed either to the State of Oregon or individual owners by means of a document called a patent. The word patent refers only to the original grant from the government to another party. Any transfer subsequent to the initial transfer is made by deed, even if it is from the federal government. Generally, patents are used these days for the transfer of mineral rights.

Assignment and Sublease

An assignment is a transfer of all the lessee's rights and obligations to another lessee. The original lessee steps out of the landlord/tenant relationship and the new lessee steps into it under the same terms and conditions as the previous lessee. Assignment of a lease is permissible unless the lease agreement states otherwise. A sublease is a lease between one lessee and another. The main difference between an assignment and a sublease is that the original lessee remains a part of the landlord tenant relationship in that the original lessee remains responsible for the rent even though he or she may not be in possession of the premises. If the sublessee does not pay rent, the landlord may seek it from the lessee. Generally, subletting a lease is permissible unless the lease agreement states otherwise.

Appurtenant vs. In Gross Easements

An easement appurtenant is said to run with the land, meaning that its ownership automatically transfers with the ownership of the land, regardless of whether it is expressly mentioned in the deed. The ownership of an easement in gross is particular to the person to whom it was granted and must be expressly transferred to the new owner on transfer of the dominant estate. If it is not transferred, it terminates. An easement for access, like for a driveway, is an example of an easement appurtenant. If there is uncertainty as to whether an easement is appurtenant or in gross, a court will usually interpret it to be appurtenant. A right-of-way easement such as those acquired as public utilities are usually called easements in gross.

Termination of Easements

An easement can be terminated if it expires; if its owner releases it; the owner abandons it; if it is extinguished through merger of the dominant and subservient estates; or through adverse possession.

Life estate

An estate measured by the lifetime of a person other than the property grantor is called a life estate. The life tenant has almost all the rights of ownership and all the responsibilities, but the estate will automatically pass to the remainderman at the end of the measuring life. The life tenant may not waste the property (destroy the value), he may not devise it (dispose of by will), and he must permit reasonable inspection of the property by the remainderman. For example, Alan conveys his house to his son, Bob, but grants a life estate to his wife, Carol. Carol has most of the rights of ownership over the land, but it will automatically pass to Bob on her death. Carol is the life tenant, and Bob is the remainderman.

Encumbrance

Any claim, charge or liability attached to any real property that may decrease its fair market value or impair its use or transfer. Always noted on the deed following the real property description. When an encumbrance has not yet ripened, or become enforceable, it is said to be a cloud on the title. If such a situation is present, a deed will state "subject to easement".

Real Property Taxation

Assessment- The process of identifying and valuing real property within a particular jurisdiction for the purpose of levying tax against the property. Almost all privately owned property is subject to taxation, though most property owned by non-profit organizations is fully or partially exempt from assessment and taxation. Government property is not subject to assessment or taxation. Pursuant to Oregon law, every six years, the tax assessor of each county must physically appraise (another term for assess) every parcel of property subject to assessment within his or her jurisdiction. 1) Ad Valorem-A system of taxation in which the amount of tax owed is determined by the value of goods or services being taxed. Oregon's property tax system! 2) Maximum Assessed Value- A valuation of real property pursuant to a formula set forth in the Oregon Constitution. A base value is assessed pursuant to the constitutional formula, after which the assessment can only increase by 3% each year, regardless of the appraised value taken every six years. 3) Real Market Value-The amount the county assessor has determined a parcel of real property would sell for on the open market. Like maximum assessed value. 4) Taxable Assessed Value-The value on which the tax levy is actually imposed. It is the lesser of the maximum assessed value or the real market value. 5) Permanent Tax Rate Authority-The maximum tax rate that a tax district can apply to assessed property in its jurisdiction. All districts may set tax rates lower than the permanent tax rate authority, but they may not set them higher. (also known as 'permanent operating tax rate'.) 6) Local Option Tax Authority-Allows tax districts to ask their constituents to approve by vote temporary tax rates above the permanent tax rate authority.

Sale and Transfer of Personal Property

Bill of Sale-Evidence of the transfer of personal property. (title report could be Bill of Sale. Could be many things.) Security Agreement-Creates a lien on personal property. (if the buyer is not buying outright) Required by UCC (Uniform Commercial Code) on the sale including business equipment.

Scope of Title Insurance

Can be boiled down to two basic duties: 1) the duty to defend, 2) the duty to indemnify. Defend=Should any covered title issues give rise to legal action, the insurer must pay legal expenses, such as attorney's fees, court costs and expert witness fees. Remember that most lenders' policies do not provide for any insurer duty to defend. Indemnify=The insurer must reimburse the insured for any loss covered under the policy, up to the face amount of the policy (Which equal to the value of the house at the time of its purchase.) Which types of loss are covered under the standard policies is explained below: 1) Marketable Title-Broadly defined as a title that is reasonably free from questions of law or fact. (No Title Defects!) Unmarketable title is not necessarily invalid title, and title can revert to marketability from unmarketability and vice versa. 2) Title Defects-Anything in the whole history of ownership of a parcel of property which may encumber the property owner's right to the peaceful enjoyment of the property. Title defects include easements, liens, zoning restrictions and other physical and financial encumbrances. Title defects can also arise from deed defects such as a forged deed or a deed made by an incompetent grantor. Given the broad definition of a title defect, there is virtually no property that is completely free of title defects. Defects like easements or deed covenants limit the use of property, but do not affect the marketability. Defects like liens do not affect the use of the property but may affect the marketability. Not all defects are encumbrances, like liens or easements. A title defect may also include a hazardous environmental condition, inaccurate boundary lines, or a deed defect like forgery. 3) Variance from Title-The standard ALTA policy describes the interest in the land insured by the policy. The policy will state if the interest is in fee, is contingent, or is a life or leasehold estate and it will provide a property description, and if a standard policy will cover any variance from the interest and property as described. However, boundary disputes resulting from encroachment are not covered under standard policies, and if an owner wants to be certain of the property's boundaries, he should have the property surveyed and acquire extended coverage. 4) Cloud on Title- Typically covered by the standard title insurance policy. A cloud differs from a defect in that a cloud may or may not cause a problem with title. Generally also covers claims based on lack of grantor capacity and forgery. A typical cloud on title that is not covered is any right of the party in possession of the property. This is because the party in possession could have an unrecorded right to ownership of the property such as an unrecorded deed or title by adverse possession. Clouds on title are commonly caused by marriage, death, divorce, liens and lawsuits. 5) Lack of Access- Insure only the bare right to come and go from a public road. Access that is physically difficult to obtain is not covered under the standard policy. 6) Exclusions-The standard policy does not cover any defect or cloud that fails to present itself in the public record. The encumbrance must be discoverable by a search of public records to be covered by standard title. Such "off-record" defects may be covered under an extended policy. Other common exclusions include the exercise of governmental regulatory or zoning power or police power. 7) Exceptions-No standard exceptions in ALTA policies. Instead, the policy describes exceptions particular to the insured parcel of land. Generally, these include regional exceptions for matters known to affect land areas including the insured property, as well as matters solely affecting the insured property. D. Extended Coverage-Insures against "off-record" defects. Insure against encroachments, whereas a standard policy would not. Otherwise, an extended coverage policy has all the provisions and exceptions. Prior to the issuance of an extended coverage policy, the property must undergo an on-site inspection. Defects discovered during the inspection are excepted from the policy.

Estimated Closing Costs

Closing costs are fees paid at closing. The buyer's costs include the expenses incurred in obtaining the loan and transferring the ownership of the property from the seller to the buyer. Typical charges would be for the appraisal, title search, home insurance, property reserves, and recording fees. The seller will usually be charged for title insurance, brokerage fee, and recording fees. An escrow officer may NOT accept or disburse funds, property or documents in any escrow transaction without dated, written escrow instructions from the principals to the transaction.

Sale and Leaseback

Commercial property owners may choose to sell a property and leaseback from the new owner, benefiting from a tax advantage.

Involuntary Alienation

Dedication- Transfer of real property without consideration. A developer might dedicate a portion of a subdivision as a park to gain permission from the city to build. The developer gifts the land to the city. Ex. Dedicating a park, gifting land to a city. Intestate-A property owner dies without a will. Escheat-A property owner dies without a will or any heirs, property goes to state. (after three years can be sold to public auction. Eminent Domain- A government agency takes private land for public use, can condemn a property based on tax assessed value, unless challenged. Judicial Foreclosure- A lender files suit to foreclosure and is granted the right by way of a court order to hold for public sale. Non-Judicial Foreclosure-The trustee of a Trust Deed has the power of sale by filing a suit and selling the property. The lender has a propriety lien on title until the loan is paid, or receives bare title (right to sell title) in order to sell. Strict Foreclosure- Typical provision in a Land Sales Contract. The seller, in 'first position' on title, files a foreclosure suit against the defaulting buyer, evicts the buyer, and regains possession of the property. Adverse Possession- to acquare legal ownership to a property owned by someone else by means of open, notorious, hostile and continuous possession for a period of ten years. Usually settled in courts, but not always.

Defeasible Estate

Defeasible Estate. A defeasible estate is one in which ownership can be voided or annulled upon meeting some condition. There are two types of defeasible estates: fee simple determinable and fee simple subject to condition subsequent. A fee simple determinable estate- will terminate if some condition set by the grantor is met. Upon meeting the condition, the estate reverts to the grantor. For example, a landowner may gift land to a city on the condition that the land never be cleared for parking. If the city begins to clear the land, ownership automatically reverts to the grantor. The city has an interest in fee simple determinable. A fee simple subject to condition subsequent- does not terminate automatically when some condition is met, but will terminate if the grantor claims it.

Oregon Construction Lien Law

Defines who is entitled to file a construction lien. Includes laborers, suppliers of material, architects, owners of leased equipment, and landscape architects. Construction Liens will have priority over encumbrances, such as mortgages and trust deeds of record regardless of the fact that the lien was recorded after the security instrument. The controlling question: was the lien perfected while a 75 day filing window was open? If the answer is yes a properly filed lien will have priority over other monetary encumbrances recorded while the 75 day window was open. To perfect the lien, the claimant must record notice of the lien 1) within 75 days of completion of construction or 2) 75 days after ceasing to provide labor, materials and rental equipment, whichever occurs first. Failure to record within the 75 day period will result in the loss of the super priority status and the claimant will become an unsecured creditor. Therefore, title insurers require the filing of the completion notice as an outside limit to start the tolling of the 75 days lien period.

Fair Housing

Discrimination in selling, renting or leasing real property prohibited. A person may not, because of the race, color, religion, sex, sexual orientation, national origin, marital status, familial status or source of income of any person.

Bargain and Sale Deed

Does not contain regular warranties but warrants that the grantor has not done anything to cause defect to title. Ex. Add someone to title.

Quitclaim Deed

Doesn't provide warranties; used to correct defects or remove a cloud on title. Ex. If seller legally changed name, or a divorce.

Creation of Easements

Easements can be created in any of four ways. They can be created expressly wherein the owner of the land being used for the easement makes an express, written grant to another person. They can be created by reservation or exception wherein a landowner who is conveying his land reserves an easement to himself. Easements can be created by prescription, which is similar to adverse possession, with the exception a party cannot acquire title by continued use; and easements can be created by implication, which requires that the easement be necessary for the use and enjoyment of the dominant estate. Generally, there is no easement by prescription over public lands.

Eminent Domain and Dedication

Eminent domain is the right of a government agency or private entity to acquire, for public use, ownership of privately owned property upon payment of compensation to the owner of the property. The right may be exercised over the objections of the property owner. When property is taken under the right of eminent domain, it has been condemned. As well, the legal action to force the sale of property under eminent domain is called condemnation. G. Dedication. When a property owner voluntarily relinquishes her property for public use, she is said to have dedicated the property to the public. Often a requirement for a builder to receive a multiple residential housing building permit is to agree to dedicate a small portion of the land for the use of a public park.

Estates: Freehold and Leasehold

Estates that are created by operation of law, such as inheritance, are known as legal estates, as distinguished from conventional estates, or those created by parties to a contract. An estate may be a present or future estate. If the estate is present, the owner has an ownership interest in it at this time. If the estate is a future estate it is said to be executory, and the holder of the interest will not come into full ownership until sometime in the future. A freehold estate- is one that is owned for an indefinite or indeterminable duration. For example, if an estate is in fee simple absolute, its term of ownership is indefinite since no one knows when the owner may dispose of the property. If an estate is a life estate, its term of ownership is indeterminable since you know that the estate ends at the termination of a life, but you are unable to determine when that life will end.

Freehold Estate

Fee Simple Estate (Interest) Hold title and Bundle of Rights Maximum possible estate in a real property. An interest in land for an uncertain duration of time. best property to hold.

Fee Simple Absolute

Fee simple absolute is the maximum possible estates a person can own. An owner of property in fee simple absolute has all the rights in the bundle of rights, and all the responsibilities that come with it. Ownership is only limited by the four basic governmental powers: police power (including the right to determine land use and safety codes), eminent domain, taxation, and escheat.

Land Owndership: Feudal and Allodial System

Feudal System- The beginning of land ownership. Old English Common Law, the government or king held title to all land. Individuals were tenants with the rights to use at the sufferance of an overlord. Allodial System- The basis for real property law in the United States. An estate (interest) holding ownership with the rights in the land by individuals. Appurtenances and Bundle of Rights: Ownership of real property entails certain rights. The bundle includes the rights to possess (seisin), use, encumber, license, drill, exclude, lease, occupy, control, farm, build, alienate (encompasses devise, sell and gift), and dedicate. The owner of real property has the right to possess and use the land to the exclusion of all others, and his property may not be alienated without his permission (involuntary alienation). The owner also has the responsibility to pay property taxes, ensure the property is used legally, abate nuisances on the property, and he or she is liable for damages resulting from activity on the property. (Freehold estate=bundle of rights)

Real Property

Fixtures-Items attached to real property. Built in appliances, drop in stove top, built in dishwasher, cabinets, built in book cases. Not necessarily permanent. Usually conveyed with the real estate unless sales contract states otherwise. Ex. Chandelier. Kitchen sink installed in a home, form machinery installed by landowner. Severance- Act of removing something from the land. (real to personal property. Ex. removing a fence) A fixture always starts out as personal property and is only converted to real property if it meets any one of several tests: 1) annexation; 2) intent; 3) adaptation; 4) relationship or 5) evidence of a written agreement. The presence of just one of these factors may render personal property real, the more factors present, the more likely an item is to be a fixture. Owned by the real property owner, Permanently attached to the real estate, Legally considered to be real estate Trade Fixtures- Items installed by a tenant so he or she can carry on a trade or business. Can be personal or real property. Depends on installation and agreement between parties. Owned and installed by the tenant, Legally removable, Considered to be personal property ex. Booths owned by a tenant in a restaurant leased by a tenant. Gas pumps installed by a tenant in a rented service station.

Government Powers and Owners Rights

Government Powers: Escheat Taxation Police Power Eminent Domain Owner's Rights Owners Rights: Posses, Control, Enjoy, Dispose: Mortgage Rent Sell Will Give

Physical Characteristics of Land

Immobile- Top soil vegetation, rock, sandstone, etc. can be removed and topogrophy can change, but a parcel of land is fixed. Indestructibility- Improvements can be removed or destroyed but the land remains. Uniqueness- Non-homogeneity; not identical. Compare apples to apples. CMA (competitive market analysis) NOT apples to oranges.

Defeasible Fee Estate

In a deed, could be either. Ex. If owner has trouble making payments, could have one of these estates on deed: Subject to a subsequent condition- Such as a pending foreclosure, can't be terminated unless the grantor/lender goes to court to assert right of re-entry. Not automatic. Subject to a special limitation- Ends automatically upon failure to comply with limitations.

Subdivision and Partitions

In the State of Oregon a person may not create a street or road for the purpose of subdividing or partitioning an area or tract of land without the approval of the city or county having jurisdiction over the area or tract of land to be subdivided or partitioned. A person may not sell any lot in any subdivision with respect to which approval is required by any ordinance or regulation adopted until such approval is obtained. No person shall negotiate to sell any lot in a subdivision until a tentative plan has been approved. A person may negotiate to sell any parcel in a partition with respect to which approval of a tentative plan is required by any ordinance or regulation adopted, prior to the approval of the tentative plan for the partition, but cannot sell any parcel in a partition for which approval of a tentative plan is required by any ordinance or regulation adopted. A lot or parcel lawfully created shall remain a discrete lot or parcel, unless the lot or parcel lines are vacated or the lot or parcel is further divided, as provided by law.

Elements of a Valid Deed

In writing (Statue of Frauds). Legally capable grantor (seller). Grantor's signature. Consideration, monetary not required (Could be for love and affection. Does not need to be $$). Granting clause. Habendum Clause (Quiet, peaceful enjoyment). Designation of limitations on Conveyance: CC&R's , other restrictions. Accurate, legal description of property. Delivery and acceptance. Acknowledgement and transfer of title. Land Use Disclosure, (Oregon Requirement) Deed does not have to be recorded to be valid!

Condo

Individual ownership of a unit and an undivided interest in common area. Residential, resort, or industrial. Has to do with ownership, NOT looks.

Co-op Apartment

Individual proprietary lease in an apartment unit in which the title is held singularly by the shareholders corporation of the apartment building. Whole building owned by corporation in which you have little share.

Less than Freehold Estates

Less than Freehold or leasehold estates are non-ownership possessory interests in real property that can be measured in calendar time. The holder of a leasehold is a lessee (more commonly known as a tenant). His possession and use of the estate is known as tenancy.

Involuntary encumbrances

Liens placed upon the property that the owner must abide by. For example property taxes and easements appurtenant follow title.

Auctions

Many hard to sell properties with special amenities or eccentricities go the route of the house auction. Many foreclosures are sold "as is"It's caveat emptor or "let the buyer beware." For the average homeowner in a normal market, a house auction, generally, does not save the seller money nor does it make the seller money. The main benefit of a neighborhood auction is time. The auction is a one-time event. Only licensed brokers can sell a property at an auction.

Property Boundaries and Descriptions

Metes and Bounds- Identifies a property by Specifying the shape and boundary dimensions of a parcel. Always comes back to point of beginning. Descriptions are given by providing directions and distances from some physical marker on the land. Distances are given in standard measurements such as miles, yards, feet, etc., and begins and finishes at the same point. The point of beginning or POB is the physical marker from which directions and distances begins. A bearing is a measurement of direction between two points. There are two types of bearings, quadrant and azimuth. Rectangular Survey-Based on pairs of principle meridians and base lines Used in the Western United States. Ex. Willamette Meridian. 43,560 sq. feet in an acre. This system identifies parcels of land by their location on a grid of rectangles based on principal (or prime) meridians and baselines. •Section: The basic unit of the system, a square tract of land one mile by one mile containing 640 acres. •Township: 36 sections arranged in a 6 by 6 system, measuring 6 miles by 6 miles. Sections are numbered beginning with the northeast-most section, proceeding west to 6, then south along the west edge of the township and to the east. •Range: Assigned to a township by measuring east or west of a Principal Meridian •Range Lines: The north to south lines which mark township boundaries. •Township Lines: The east to west lines which mark township boundaries. •Principal Meridian: The reference or beginning point for measuring east or west ranges. •Base line: Reference or beginning point for measuring north or south townships. Halves of a section are represented as N, S, E, or W. Quarters are represented as NW, SW, NE, and SE.

Personal Property/Chattels

Not permanently attached. Items of personal property; easily removed from the real property; furniture, refrigerator, washer/dryer, lawn mower, free standing stove, portable dishwasher. (detitled=making the item real property) Ex. Harvested wheat or corn crops, tenants window air conditioner.

Title Insurance

Not required by Oregon law, title insurance provides protection against financial losses stemming from defects in title that occurred prior to the present ownership. Standard title insurance does not provide protection against conditions of the land such as environmental hazards, subsidence or government regulation. To acquire title insurance, a title search must be done, and the chain of title must be examined to determine whether title is insurable. If the title is insurable, there is a one-time premium paid at the close of escrow and the insurance remains in effect for the duration of the policyholder's ownership of the house. Usually, the seller pays for the title search and the buyer's title insurance premium. Lenders require that there be a separate title insurance policy issue in their name. A. Land Title Association- Trade groups comprised of title insurance companies and usually escrow companies and agents. One of the major functions is to standardized policies across state and county lines. 1) American Land Title Association (ALTA)- Major national land title association. ALTA promulgates standardized forms, the use of which is permitted in all states except Texas. 2) Oregon Land Title Association (OLTA)-Oregon State affiliate of ALTA. Like other state affiliates, OLTA promulgates its own standard forms. Use of its forms is not required; title insurers and escrow companies may use ALTA forms as well. 3) Standard Title Insurance-Provides a title search and the chain of title examined to determine whether title is insurable.

General Warranty Deed

Offers the greatest warranty of ownership.

special Warranty Deed

Offers the same guarantees as a general warranty deed with the exception; only for the period of time the grantor (seller) has owned the property. Often used by corporations. Example could be a foreclosure.

Deferral Programs

Oregon homeowners over the age of 62 qualify for several property tax deferral programs. The state pays the assessed tax on behalf of a qualified homeowner and places a lien against the property. The taxes and accrued interest must be repaid upon the transfer of ownership of the home, including sale, gift, and death of the homeowner unless the deceased homeowner's spouse elects to continue the deferral. (There is also a deferral program for disabled homeowners.) A. Deferral of Special Assessments- Available to homeowners over the age of 62 who meet certain income and residence requirements. All deferred assessment payments plus interest become due in full on August 15 of the calendar year following the death of the homeowner. B. Deferral of Property Tax-All homeowners age 62 or older, regardless of income, may defer payment of property taxes. Disabled homeowners may also defer payment of property. All deferred assessment payments plus interest become due in full on August 15 of the calendar year following the death of the homeowner; the sale of the property; or a permanent change in residency due to something other than medical Veteran's property Tax Exemption -A disabled veteran, or the surviving spouse of a disabled veteran, is eligible to exempt a certain percentage of the value of his or her primary residence from taxation.

Life Estates

Ownership based upon someone's life. A life Estate in 'reversion' is conveyed to another until a future action occurs. (Ex. wife) "Jim grants John a life estate. Upon Johns' death, the estate reverts back to Jim. A Life Estate in Remainder- a future interest in real property. "Jim wills to John a life estate, upon John's death the remainder estate goes to Jim's son, Jimmy Jr. Life estate owner is obligated to pay: Property taxes, property insurance, costs of repairs and upkeep of the property, they could encumber the property with a loan, with the knowledge, consent and signature of the Remainder or Reversionary of the Life Estate.

Exclusive Farm Use Zones

Permits a wide range of uses. The list has expanded over the years to be responsive to changing needs. The most common non-farm uses approved by counties include commercial activities in conjunction with farm use. For example, seed cleaning, fertilizer sales, and berry processing, home-based businesses with no more than five employees and utility facilities necessary for public service, such as wastewater treatment, cell towers and electrical substations. Examples of other potential uses of farmland include: mining of mineral and aggregate resources, solid waste disposal sites, rural transportation facilities and private and public parks.

Property Boundary and Descriptions

Property Legal Description- Each lot, block and plat parcel has an identifying number. Required on deeds, mortgages, and most contracts involving real property.

Closing Escrow

Prorated items- At closing an escrow, officer prorates the property taxes, depending on the time of the year the seller will either be charged for their portion of the year's taxes or credited back if they have already paid the taxes for the year. If the property is a rental the tenants rent and security deposit will be credited to the buyer. If the buyer assumed the sellers loan, the escrow officer would also charge the interest on the loan to the buyer at the time of closing and credit back any balance to the seller. (so taxes go to buyer) Closing statement- Itemizes the credits and debits for the buyer and the seller. On a buyers closing statement the sales price is a debit and the loan is a credit. The escrow closer uses the funds to pay off the seller's loan and any other expenses such as title insurance, escrow settlement and recording fees and the commission owed the brokerage firm. If the transaction was a co-op transaction the escrow officer will list the total amount of commission due per the seller and listing agent's agreement and send a check to the listing agent's brokerage firm. The amount for the buyer's agent will be sent to their brokerage firm. Usually brokers split the commission 50/50, but it can be split differently.

Real Property Law

Real Property laws govern land ownership with consideration to the physical and economic characteristics.

Real vs. Personal Property

Real- The land. Attached. Improvements (swimming pools, sheds. Real unless detached. Usually conveyed with the land unless otherwise agreed to) emblements (harvested crops) minerals, air space, subjacent (Down to core) and lateral support. Conveyed in deed. Ex. sidewalks and sewers in a subdivision. Bushes surrounding a residence. Personal- (also called Chattel) Movable items not attached to real estate. Items removed from the property. (Put in sales agreement. Usually assumed goes with seller unless stated otherwise) Conveyed in Bill of Sale. Unless excluded in sales, can't take real property with you when selling.

Less than Freehold Estates

Renter. No owner. The right of possession without the rights of ownerhship. Hold tenant rights, not title. Estate for years-Beginning and end date of possession, lease agreement. Periodic Tenancy-Month to month, termination notice by either party. Tenancy at Will-Unspecified duration of time, month to month, year to year, ect. Tenancy at Sufferance-Remaining in possession after expiration of an agreement, holdover. (Tenant does not leave and no longer paying)

Property Tax Year

Runs from July 1 through the following June 30. Taxes are levied on July 1 of each year, at which time they also become a lien on the property. Payments are due November 15 of the same year. The bill may be paid in a lump sum, with a 3% discount if paid prior to November 15th. If done in two payments the taxpayer is allowed a 2% discount by paying 2/3rd. by November 15th. and the last 1/3rd. by May 15th. No discount is allowed for three installments due November, February and May 15th. Lastly, any installments or the full sum must be made by May 15 of the following year. If not paid by May 15, the taxes become delinquent. If the taxes are still not paid three years after delinquency, the county can begin foreclosure proceedings. Property owners have two years to redeem their property by either paying all taxes and interest in full or just the oldest year's taxes and all interest accrued for that particular year. The homeowner may live in the home undisturbed during the redemption period. Property tax liens are superior to all other liens.

Economic Characteristics of Land

Scarcity- or abundance of inventory effect supply and demand, which influences land value. (Currently we are in a sellers market. Low inventory, high demand) Improvements- upon the land increase value. ex. wells, fences, sidewalks, ect. Investment Value- Follows current market supply and demand. Location- Determines the economic life and value of a property.

Seller's Property Disclosure Statement

Sellers are instructed per the disclosure form to do the following: •Complete the entire form. •Do not leave any spaces blank. •Refer to the line number(s) of the question(s) when providing explanations. •If not claiming an exclusion or refusing to provide the form under ORS 105.475 (4), date and sign each page of the disclosure statement and each attachment. Each seller of residential property described in ORS 105.465 must deliver this form to each buyer who makes a written offer to purchase. Under ORS 105.475 (4), refusal to provide this form gives the buyer the right to revoke their offer at any time prior to closing the transaction. An exclusion may be claimed if the property is new construction or the seller is a representative of a deceased estate or a financial institution. If not excluded, the seller must disclose the condition of the property or the buyer may revoke their offer to purchase any time prior to closing the transaction. Providing answers or filling out the form goes beyond the scope of professional real estate activity and could be considered an act of practicing law without a license. Nor should a licensee suggest a seller not disclose a material fact about the property. Such action would be in violation of license law and agent fiduciary obligations.

Forms of Ownership

Severality- Ownership vested in one entity. (Normally a corporation) Tenancy in Common-Two or more with undivided interest and possession. Any party can sell or devise their interest without the permission from the others unless agreed upon, in writing, following title. (Could be divided in different amounts. Means not married. can will them half of the property. Ex. Sam dies and wills his interest to Dick and Jane equally. Tenancy by the Entirety- Ownership by an Oregon married couple with the right of survivorship. (If spouse dies, all ownership goes to left spouse. Syndicate-Multiple owners in an investment property. Buys, sells, and operates real estate property. General Partnership-Two or more owners forming a business organization for profit. All partners share full liability and obligations. Limited Partnership- Passive investor relying on a general partner to make all of the decisions for the organization. Corporation-Hold title to real property for a corporation per the organizations articles of corporation. Joint Venture- A special joining of parties for one specific real property project.

Lot and Block System

Simplest and easiest legal descriptions to use, are used in developed areas where a parcel of land has been platted. According to Oregon law, before a developer can develop a subdivision, he must file and record a plat map. The plat map shows how the developer has divided the parcel of land into lots on which homes will be built, roads and open or public spaces. The plat map must be drawn by a registered surveyor and conform to statutory drafting standards. Each subdivision must have a name and each lot must be numbered. Larger sub-divisions will be broken down into numbered blocks and then lots.

Timber and farm use Taxation

Small Tract Forestland (STF) Severance Tax, which works as a tax deferral program for timberland. The harvested timber is also subject to the Forest Products Harvest Tax (FPHT). The STF proceeds are distributed to state educational funds and counties that have STF lands. The FPHT proceeds support state administration and education about Oregon's forests. A. Small Tract Forestland Severance Tax- If the landowner chooses the STF option, the landowner pays 20% of his real property tax through the standard property tax system and the remaining 80% upon harvest of the timber on the land. A landowner can opt to defer 80% of his tax burden until harvest. B. Forest Products Harvest Tax-Applies to any timber harvested from any land in the state of Oregon. FPHT applies to anyone who harvests timber regardless of land ownership. Farm Use Taxation: If real property is located within an exclusive farm use (EFU) zone and is used primarily to make a profit from farming activities, it can qualify for a special farm use assessment. The farm use assessment is based on income rather than property value. The county assessor's office or the county planning and zoning office have maps showing where EFU zones are located. Whether the property is being put to farm use is determined by statute. If land is not located in an EFU zone, but is used as farmland, it may still qualify for the special farm use assessment.

Cooperative Ownership and Condominium ownership

Stock ownership with Bill of Sale. Recieve propriety lease, right to possess and memeber of a corporation. Owns personal property. Each unit owns a percentage of the building. Condo-Holds fee simple title in real property. Not stock. not share. Common interest in some of property.

Land Conservation and Development Commission

The LCDC is the state level land use-planning agency. Through the LCDC the state is able to promulgate state-wide land use goals and guidelines; coordinate planning activities of state-wide significance; and identify geographic areas of special importance at the state level (such as designating critical wildlife habitat). The LCDC also reviews local comprehensive land use plans to make sure that they comport with mandatory statewide planning goals. B. LCDC Land Use Goals. 1. Citizen Involvement. Each city and county must have a citizen involvement program and a citizen committee that monitors and encourages public participation in planning. 2. Land Use Planning. This goal requires that all land use decisions be made in accordance with Oregon's comprehensive land use plan, and that land use ordinances to affect the plan's goals be enacted. Local plans must be coordinated with the plans of neighboring and regional jurisdictions. 3. Agricultural Lands. Counties must inventory and preserve forest land. In broad terms, it is rural land that is being used or can be used for agriculture. There are approximately 38,300 farms in Oregon. A farm is any place from which $1,000 or more of agricultural products were produced and sold or normally would have been sold during the year. Property designated for agricultural use is zoned Exclusive Farm Use (EFU). There is a statewide minimum lot size of 80 acres for farmland and 160 acres for rangeland.

Environmental Issues

The Oregon Department of Environmental Quality uses a wide variety of tools to help ensure that businesses and individuals comply with state and federal environmental laws. These tools include technical assistance, compliance inspections, investigation of complaints, warning letters, assessment of civil penalties and compliance orders. When DEQ issues civil penalties to polluters, violators may pay the penalty amount, request a hearing, or fund a supplemental environmental project in combination with a penalty payment. •Hazardous waste — Community mercury thermometer exchanges or collections; household hazardous waste collection events. •Air quality — Woodstove change-out programs; diesel retrofits for school buses and semi-trucks. •Resource efficiency — Conducting energy audits for schools, municipal buildings. •Water quality — Stream bank restoration to reduce erosion, provide shading and increased natural habitat; constructing bio swales to collect and filter storm water runoff. •Solid waste — abandoned garbage dump cleanups, cleanups of waste tire piles.

Zoning

The creation and enforcement of zoning laws, often collectively referred to as a zoning code, is the primary way to enforce planning and land use decisions. Examples of zoning laws include requirements for the placement of improvements on property (called setbacks), landscaping requirements, building height restrictions, and restrictions on placing bars near schools and factories near homes. Zoning is a process of dividing a jurisdiction into discrete zones with land use designations such as industrial use, residential use, commercial use and mixed use. Sometimes a property owner can use land in ways that are contrary to the zoning designation by obtaining a zoning change, a variance, or a special use permit. 46:03:21 A. Base Zone- Prescribes land use, and, one that, without which, the land would have no zoning at all. Therefore, a residential zone may also be zoned for historic preservation and environmental conservation, but without the residential zoning, the land would be unzoned. B. Overlay Zone. Sometimes zones overlap one another so that you may have historic zone overlapping a residential zone. Does not prescribe any particular use of land; it just places additional restrictions or rights on ownership of land within the residential zone. C. Buffer Zone- Usually required between zoning areas that are considered to have highly incompatible uses such as a residential and industrial zone. In a buffer zone, the incompatible use will be permitted, but only in a way that accommodates the residential development. For examples, traffic may be restricted, stores may have to close earlier, and property may have to be heavily landscaped. D. Permitted Use. A permitted use is a use of property that is permitted by virtue of the zoning of the property. An owner has a right to use her property for a permitted use in which the right can only be taken away by due process. E. Non-conforming Use-(grandfathered use) of land occurs when a particular property is used in a way that does not comply with current zoning regulations, and the property was put to that use prior to the enactment of said regulations. F. Abatement. Abatement-Requires the owner of a property put to non-conforming use to gradually phase out that use. The phase-out is usually over the economic life of the property, so that the owner cannot mount a suit against the jurisdiction for taking the property. G. Special Use Permit-Allows the owner of the property to use the land for a purpose that is not a permitted use, but, if properly controlled, will not be incompatible with the permitted uses. Special use permits may have conditions attached to them, in which case they are called conditional use permits. H. Variance-Allows a property owner to make some use of the property that is a minor infringement on the regulations such as changing the distance of setbacks or building height requirements. Once granted, a variance becomes a right that attaches to the title of the property. I. Zone Change-A property owner has the right to ask the local planning and zoning board to change the land use designation of a parcel of property. Generally, obtaining a zoning change is expensive, time consuming and not guaranteed to succeed. Most owners instead try to seek a variance or a special use permit instead. J. Zoning Restrictions vs. Deed Restrictions-Zoning restrictions impose limitations on land use, but they are public restrictions rather than private restrictions. In a conflict between deed restrictions and zoning restrictions, the more restrictive prevails. Accordingly, if you live in a subdivision that has deed restrictions limiting the height of your house to 20 feet, but local zoning restrictions permit a height of 25 feet, you can only build a house that is 20 feet tall.

License

The right to use property. Affords no ownership rights, and it does not even provide the right to possess and exclude like a lease. A license ceases upon the sale of the property or the death of either party.

Alienation

The transfer of ownership from one person to another. It can be voluntary,(sale or gift) involuntary as in a foreclosure. With few exceptions, a person cannot be forced to alienate his or her property, and unreasonable restraints on alienation are not allowed.

Types of Taxes

There are many types of property taxes (or levies) 1) Serial Levy. A serial levy is a tax levied at a voter-approved fixed tax rate for a fixed amount of time. 2) Revenue Bonds- A bond issued by a municipality (a city or county) to finance specific public works projects. If the project does not generate revenue, or until it does, the interest on the bond or the bond itself is paid from the proceeds of property taxes. This is why bonds are subject to vote by the electorate. Often, the bonds are sold to private investors in what is called a bond issue. 3) Special Assessments- Taxes levied to pay for improvements such as sidewalks, sewers, and streetlights. Pursuant to the Bancroft Bonding Act, special assessments may be paid in lump sum or installments. If taxpayers opt to make payments, they will be charged interest.

Interests in Real Property

There can be a number of interests in a given piece of property, many existing at the same time. An example is if you own a piece of property (an estate) but have a mortgage (a lien), grant your neighbor an easement across it, lease it to a tenant, give your cousin an option to buy it and list it with a real estate broker.

Types of Ownership

Title to real property is evidence of the right to ownership. Title may be held (vested) in a number of ways including tenancy by entirety, severalty, and tenancy in common, or as a corporation or syndication. Severalty-Title is vested in one person only, also known as several tenancy or sole tenancy. When the sole owner dies, the property is probated and passes to his or her heirs or devisees. Though an actual person can hold title in severalty, it is more common for legal persons, such as corporations or trusts, and government entities to hold title in severalty. Tenancy in common- Ownership by two or more persons in which each person has a proportionate, undivided interest in the whole property. Each ownership interest is a complete interest, meaning the owner has all the items in the bundle of rights. Interests can be equal or unequal.

Rectangualar Survey

Township- Six square miles containing 36 sections. Each section is a township equals one square mile containing 640 acres. One acre contains 43,560 sq. feet.

Constructive Notice of a Deed

Two Types: Recording and public notice. Call title company for this) Actual Notice-Transfer of a deed is expressed but not recorded. A valid deed, but lacks enforcement. (Better to have recorded)

Bundle of Legal Rights

You have all of these rights when you own a property: Possession, enjoyment, control, exclusion, disposition, lease, encumber(place burden on property, ex. easement, mortgage) Devise(will to someone after death) gift.

Property Tax Appeals

You may appeal assessments or penalties and late fees to the 'Board of Property Tax Appeals.' There is no cost to appeal, but the petition to appeal must be filed with the county clerk in the county where the property is located between the time the tax statement is mailed to the property owner in late October and December 31 of the same year. The presence of an attorney is not required in a hearing. If the petitioner is unhappy with the decision of the Board of Appeals, he may appeal to the 'Oregon Tax Court.' There is no right of appeal beyond the Tax Court. D. Tax District- A jurisdiction with the authority to levy taxes on the real property located within it. Tax districts are commonly created for cities, counties, school districts, fire departments and libraries.

Business Entities

a. Sole Proprietorship-A business owned by one individual. Property may be held in the name of the individual proprietor or in the name of the business. b. Partnership-A partnership is an association of two or more persons who carry on a business for profit as co-owners. May be either general or limited. In a general partnership, all partners are personally liable for the acts of the partnership, but in a limited partnership, liability is limited. There is a general partner who is personally liable for the acts of the partnership. In addition, there are limited partners who are liable only to the extent of their investment in the partnership. Title is vested as tenancy in partnership. Corporation-A legal entity created under state law, consisting of an association of one or more individuals but regarded under the law as having a separate existence from such individuals. Has independent capacity to contract and to hold title to real property consistent with the powers given in its articles of incorporation. Title vests in the corporate name. Limited Liability Company-An entity that is taxed as a partnership but has the liability protection features of a corporation. An LLC has members, not partners, and members are only responsible for the actions of the LLC to the extent of their investment in it. Members elect a manager who contracts on behalf of the LLC. Title vests in the name of the LLC. Joint Ventures and Syndicates-The joining of two or more people, by express or implied agreement, in a specific business enterprise, such as the development of a condominium project or a shopping center.All parties must enter into a contract for it to be enforceable against the joint venture. Title vests in the name of the venture. A joint venture concerning multiple, on-going projects is known as a syndicate. Title vests in the name of the syndicate. Cooperative- Shareholders own interests in a corporation which owns real property rather than owning the real property themselves. Shareholders are granted a right to occupy one of the housing units, and title to real property vests in the name of the corporation. Homeowners' Association (HOA)- A corporation in which all the homeowners in a development have ownership interests. The HOA exists to enforce deed restrictions and to manage common areas that it owns in the subdivision, such as parks and open spaces. Trust-is a legal entity that holds assets for the benefit of its beneficiaries. Like with a cooperative, the trust owns the real property and the beneficiaries own interests in the trust. Title vests in the name of the trust or the trustees.

Water Rights Act

a. Water Rights Act of 1909. Created the Water Resource Department and applied the doctrine of appropriation to all surface water in Oregon. Surface water includes lakes, rivers, streams, springs and stored water. Even though spring water is considered surface water, it is excepted from the Water Rights Act. Spring water does not flow in a well-defined channel or flow off the property from which it surfaces. b. Ground Water Act of 1955. The Ground Water Act applied the doctrine of appropriation to groundwater. Ground water is water beneath the surface of the earth attainable by artificial or altered natural openings in the surface of the earth. The act specifies that ground water may only be appropriated for a beneficial use! Some uses are presumed beneficial, including: 1) Livestock watering; watering of a lawn or noncommercial garden, which does not exceed a total of one half acre in size 2) Single or group domestic uses in an amount less than 15,000 gallons per day 3) Any single industrial or commercial use in an amount not exceeding 5000 gallons per day

Attachments

land at, above, and below the earth's surface and all things permanently attached. You own. You have mineral rights too (More than just surface rights) Structural Improvements- Attached to real property. (Residential, commercial, Industrial, Agriculture.)