Real Estate: Transfer Of Property

Special Warranty Deed

-Covenant of SEISIN -Covenant against ENCUMBRANCES -Covenant of QUIET ENJOYMENT -Covenant of FURTHER ASSURANCE *Only warrants during the period of ownership by the seller.

General Warranty Deed

-Covenant of SEISIN -Covenant against ENCUMBRANCES -Covenant of QUIET ENJOYMENT -Covenant of FURTHER ASSURANCE -Covenant of WARRANTY FOREVER *Most common deed used in real estate- gives the purchaser the greatest protection.

Estate Taxes

1. $5 million of estate is exempt from taxes. 2. May change as tax policy is amended.

Homeowner Exclusion

1. $500,000 is excluded from taxes for married couples. 2. Exclusion is $250,000 if single. 3.Must live in the home for a min. of 2 of the last 5 yrs. 4. Gains of max. exception are taxed at ordinary rates.

Testate

A person who died WITH a will; the will decides what happens to the property; takes effect after the death of the testator-until death, property covered by will can be conveyed by owner prior to death.

Intestate

A person who died WITHOUT a will; decedent's real estate and personal property passes to heirs.

Cloud on Title

Any claim / encumbrances that may impair the title to a property.

Attorney's Opinion of Title

Buyer's attorney examines the abstract for flaws and prepares a written opinion of the condition of ownership.

Voluntary Alienation

By gift or sale; owner willingly transferred property to another. Transfer title during his/her lifetime. * Owner must use some form of deed conveyance.

Abstract of Title

Condensed history of all instruments on record affecting the title to the property. Includes all buyer's, seller's and encumbrances.

Quiet title Action

Court action to settle disputes concerning ownership.

Laches

Court doctrine that bars a legal claim because of undue delay to assert the claim; Statute of limitations has expired on making the claim; Too much time has passed.

Extended Coverage Policies

Covers additional risks that may be discovered only by inspection of the property, unrecorded rights of persons in possession, or by examination of an accurate survey.

Parole Evidence Rule

Document speaks for itself and cannot be altered by oral or written explanation.

Standard Coverage Policies

Does NOT cover situations arising from questions involving the survey, defects the policyholder does or does not have knowledge or unrecorded documents

Adverse Possession

Exclusive and continuous possession of another's land under a claim of title; periods of time may be tacked on by successive owners/tenants.

IRA Withdrawls

First time homebuyers may withdraw money for down payment from IRAs penalty free; $10,000 limit.

Types of Deeds

General Warranty Special Warranty Bargain and Sale Quitclaim

Erosion

Gradual wearing away of land by natural forces.

Deed Requirements

Grantor Grantee Consideration Granting Clause Habendum Clause Description of real estate Acknowledgement Delivery and acceptance Exceptions and reservations("subject-to clauses")

Bargain and Sale Deed

Grantor acknowledges ownership but makes no warranties.

Quitclaim Deed

Grantor does not make any warranties or guarantees of title; used to transfer unsure interests in property & clear clouds on titles. *Grantor does not claim to be the owner.

Actual Notice

If a Deed is unrecorded it is valid to those who 'actually know' of the transfer, but not binding on those who do not actually know of the transfer.

Lis pendens

Latin for "action pending". Recorded document creating constructive notice that an action, lawsuit, relating to a certain property and may affect the value or the right to transfer the property.

Statute of Decent and Distribution

Law deciding how property is transferred when a person dies.

Statute of Limitations

Law that requires certain contracts be in writing before they can be enforced.

Constructive Notice

Legally all persons are responsible for knowing what is recorded on the public record. *Purpose of recording a Deed is to give constructive notice.

Certificate of Title

Name of document prepared by an attorney.

Relicition

New land is acquired as water recedes.

Legal Title

Owner has actual legal title to property. *Lien property states- owner has legal title during loan. *Title theory states- owner gives legal title to trustee, but has equitable title.

Equitable Title

Owner has title rights, but no legal title. *Title Theory states- owner gives legal title to trustee but has equitable title. *Buyer has equitable title rights from the time he or she signs a purchase agreement up until the act of sale.

Escheat

Person dies intestate (w/o a will) and leaves no heirs or abandons the property. The title to their real estate passes to the state.

Escrow Agent

Person who handles the money, makes sure paperwork is accurate and signed by ALL parties at closing; Records documents on the public record; Makes sure title passes and sale is completed. *The buyer(s) & seller(s) appoint an independent third party; A notary in some states; Attorney or licensed escrow agent; Trained broker.

Writ of Attachment

Prevents a debtor from transferring property during a lawsuit.

Foreclosure

Process of taking property and using the proceeds to pay off the debt of the property [because the owner defaulted].

Involuntary Alienation

Property is transferred without the owner's consent.

Title Insurance

Protects the insured against loss resulting from defects in the title. *Protection against the possibility that their title is not valid.

Eminent Domain

Right of government to take private property for public use.

Appurtenances

Rights belonging to the land that pass with the title to the property.

Accretion

Slow accumulation of soil, rock, etc. deposited by the movement of water [on the owner's property].

Avulsion

Sudden tearing away of land by water or earthquake

Novation

To cancel a contract by putting a new one in place.

Assignment

Transfer of rights / duties under a contract. Rights may be assigned but not the obligation to perform. *If assignee defaults, assignor will be required to perform.

Torrens System

Used in some states instead of title insurance; fee is paid to the state when the title is recorded-state insures a valid title; property cannot be obtained through adverse possession in those states.

Deeds

Written instruments of conveyance from the owners (grantors) to recipients (grantees); documents that transfer title; a contract.