Unit 9

Other Types of Deeds

A Special Warranty Deed: limits the time frame of the covenants to the time that the seller actually owned the property. Any color or Cloud of Title previous to the grantor's ownership is up to the grantee to settle. A Bargain and Sale Deed: indicates the grantor has ownership of the property - and that's all. No other covenants are made. Trustees, fiduciaries and officers of the court often use this deed. A Quit Claim Deed: says that the grantor "quits" or releases any interest that he may have had in the property,if he had an interest. There are no covenants made in this deed. It uses the granting words of "release, remit and quitclaim" to convey the property. This deed is commonly used to correct spelling of a grantor's or grantee's name or other mistakes made in another deed. While it is a deed of conveyance and used commonly, it will send a 'red flag' message to anyone examining the title to study the ownership more carefully. Deed of Trust, Deed of Reconveyance, and Deed of Release are all used in financing and will be discussed later. Special Purpose deeds are given by the court, trustees, or the sheriff and are similar to a bargain and sale deed. These do not have any promises other than that the owner owned the property.

Deeds

A deed is the document (instrument) which transfers ownership from the grantor to the grantee. This is a dated document and transfers property one time only. There are different types of deeds and the difference is primarily in the promises made by the grantor. The Basic Types of deeds are General Warranty Deed Special Warranty Deed Bargain and Sale Deed Quit Claim Deed

Parts of a Deed

A deed is written in three parts. The names of the three parts are Premise, Habendum and Testimonium. To be valid the deed must contain these items. Premise: Name of the grantor (correct legal name), Name of the grantee ( correct legal name), Accurate legal description of the property (legal description on record). Habendum: Recitation of consideration " for one dollar and other valuable consideration", Granting Clause - words of conveyance- these are the promises of the seller. Habendum Clause - defines ownership taken by the grantee. The clause which clarifies the purpose of the deed with the phrase "to have and to hold". Designations of any limitations of ownership, Exceptions and Reservations - references to any restrictions and covenants, etc., of a subdivision. Testimonium: Signed wishes of the seller (Acknowledgement) - where the seller transfers the property of his own free will. Attestation by the Notary - notary signature, Delivery by the grantor and acceptance by the grantee. Legal transfer takes place when the deed is accepted by the grantee. Date is not required but is frequently in place if the deed is recorded in the county where the property is located.

Types of Deeds

A grantor may use any number of deeds to convey (transfer) property from one person to another. The importance of each type of deed is the type of promises made from the grantor to the grantee in each. General Warranty Deed: The highest and best deed. This is the type most often used in residential transactions. A general warranty deed promises the following: The Covenant of Seisen: This promises that the seller owns the property and has the right to convey it to another. The word seisen comes from an old English word which means "that belonging to the property." In England prior to the general population being able to read and write for themselves, sample of the trees and grass from the property were taken to the town square and, in the presence of witness, given by the grantor to the grantee. Property was then considered conveyed by the seisen. The Covenant against Encumbrances: an encumbrance is a burden on the property such a lien or a tax. The grantor assures the grantee that there are no encumbrances against the property unless they are spelled out in the deed. This means that the grantor assures the grantee that he (the grantor) has not sold the water rights or given an unknown right away that is not listed in the written public record. If there is a violation of this covenant, the grantee can sue the grantor. The Covenant of quiet enjoyment: means that the grantee can live in peace without any other claims on his property disturbing him. Specifically, this deals with anyone who may have a Color on the Title or claim on the property. All of these claims should be disposed of before the grantee gets the property. The Covenant of Further Assurance: is given by the Grantor to assure the grantee that should further paperwork or legal work need to be done to correct the title, the grantor will provide. The Covenant of Warranty Forever: the grantor will defend and protect the title for any defects that were created during the grantor's ownership of the property or before.

Leases

A lease is a possessory, nonfreehold, interest in land, created without ownership. The parties to the lease are the lessor (landlord) and the lessee (tenant). A lease is a contract between the lessor and the lessee, subject to the Florida Tenant and Landlord Act. An assignment means either the lessor or lessee may have the right to transfer the interest each has to another, should they chose to do so. The third party (the assignee) takes the place of the first person in all parts and conditions of the contract and is required to perform accordingly. A sublease is created when the lessee grants a portion of time or a portion of space to another. The original lessee retains the liability to the lessor for payment of rent. Types of Commercial Leases: A gross lease requires a tenant to pay only rent, usually on a square foot basis while the landlord pays all of the other expenses like taxes, insurance etc. A net lease requires the tenant to pay rent plus a portion or all of other expenses such as taxes and insurance. A percentage lease requires the tenant to pay rent based on a percentage of his gross profits and is usually used in start up business. The rent will increase as the business has more sales. A ground lease gives the tenant the right to build or use the land for a specific time period, up to 99 years. This is done so that the lessor does not give up ownership of the land but allows someone else to use it for a long time period. A large portion of Hawaii homes are built on ground leases. An index lease is a lease that goes up or down, based on a specific index such as the Federal Reserve Board's cost of funds, as agreed to by the parties. A graduated lease has gradual increases built in so that the lessee has increased rent payment as time progresses.

Licenses

A license is permission to use the property of another for a specific purpose. It is not assignable. The person who gave the license has the right to revoke it at any time. Death of the parties terminates the license. Examples of licenses: Tickets to sporting events, Hunting and fishing licenses, Permission to use the property of another temporarily such as letting a neighbor go through the yard to put in a pool.

Liens

A lien is a debt or charge against the property. It always comes from some type of money charge that the property has had, such as a mortgage loan or even a materialman's lien for installed new carpet. Specific Liens are liens applied to a specific piece of property and affect only that piece of property. (An example of a specific lien is a property tax lien on 123 Mulberry Lane ) General Liens are a result of losing a judgment case. A general lien is against all the assets of the person who lost the law suit and effects all real and personal property. (car, boat, house, or business) A Voluntary lien is one that the owner was willing to place on the property such as a mortgage lien. An involuntary lien is one that was placed on the property without the owner's consent or willingness. All liens except a mortgage lien are involuntary - such as special assessment liens, mechanic's liens etc. An Equitable lien is always either a judgment lien or a mortgage lien and is based on a doctrine of fairness and a written contract. A Statutory lien is based on state, local and federal laws and is some type of tax or a mechanic's lien. An Income Tax lien is a general lien because income tax is initially based on a person. If that person does not pay his taxes, the IRS sues to get a judgment; then the court awards a judgment against all the assets of the individual including his propert

Mechanic and Materialman Lien's

A mechanic's lien is a lien filed when a workman does repair or new construction on a home, such as installing new carpet, installing ground sprinklers, repairing the roof, etc. A Materialman's lien is for supplies delivered to the home such as shingles, new carpet, drywall, nails, and new kitchen cabinets. When the bill is paid, the homeowner should request a paid receipt plus a lien waiver. This prevents a lien being filed by either a mechanic or materialman. It also prevents any misunderstanding between the parties. If there is a dispute between the parties regarding the workmanship, it is not sufficient to simply not pay the bill, notice must be given etc. Legal advice should be obtained. To enforce the mechanic's or materialman's lien the lien must have been: Recorded for only the amount charged for the work completed; Filed within a specific time period as required by state law; and Filed on improved property only. A mechanic's lien or materialman's lien cannot be filed on personal property. Both mechanic and materialman's liens are considered specific, involuntary and statutory. The liens can be enforced by a court suit which could result in a judgment and a possible foreclosure.

Essential Elements of a Valid Will

A will is a written instrument (paper) that describes how the testator (will maker) wishes to have his world goods- real and personal property disbursed. It is considered by the court to be the testator's final wishes for distribution. If a person dies with a will he/she dies "Testate". If a person dies without a will he/she dies "Intestate". The maker of a will is a testator. Essentials of a Valid Will In order for a will to be valid, certain items must be in place: The testator must be of legal age. (18 or older) The testator must be of sound mind. The will must have the proper wording. There can be no undue influence, menace or duress from others on the testator. There must be the correct number of witnesses as determined by the state. A holographic will is a will that is written, dated and signed in the testator's own handwriting but not witnessed. Probate means: a formal court hearing to establish the validity of a will after the death of the individual. This is usually a lengthy and sometimes costly procedure. Having a will does not avoid probate, but it does establish the person or persons to whom the testator wishes to leave his/her property.

Encroachments

An encroachment is a physical thing which is an unauthorized intrusion of the owner's legal title. In other words, the tree hangs over into the owner's space, as defined by his legal description of the property. Typical examples of encroachments are: A fence placed on the wrong place on a property line Tree limbs hanging over a property line A roof of a garage over the neighbor's lot line A concrete driveway placed on or over the neighbor's lot line. How are encroachments discovered? By physical inspection (actual notice) A survey (constructive notice) Why is it important? The encroachment can lead to a color on the title and a possible adverse possession suit if it is left for the statutory time period.

Encumbrances

An encumbrance is anything that burdens or limits the title of a property. The following are examples of encumbrances: Deed Restrictions Easements Leases Liens Encroachments Licenses

Easements:

Another form of restriction on the property is called an easement. An easement is an example of an encumbrance.* Easements give someone else (dominant estate) the right to USE a part of the property while the owner(servient estate) retains the ownership rights. Easements are non-possessory rights, just the right of ingress (enter) and egress (exit). For that reason, an easement is said to be an interest (claim) on the property, but not an estate. An easement is created by: Implication - an easement arising by implication from the acts of conducts of the parties. For example a person acquiring mineral rights on a property also acquires an implied easement to enter the property for the purposes of removing minerals. Reservation: The creation of a new right or requirement retained by the grantor after the property transfer. A reservation or reservations are rights to use the granted property by the grantor in the future. For example, if a grantor deeded 40 acres, but retained the right to cross the land to get to a family cemetery: this is a reservation. Necessity: An easement created by a court of law in cases of justice and if necessity dictates it, especially in a case of landlocked property. Condemnation: A judicial or administrative proceeding to exercise the power of eminent domain. The agency taking the property is the condemnor, and the person whose property is being taken is the condemnee. When private property is taken for public good, a fee simple estate or other reduced interest like an easement, may be acquired. A common example of a condemnation easement is obtaining owner access to a street entrance when the county builds a highway. Express Agreement: An express contract for an easement exists when the parties state the terms and show their intentions in words. An express contract can either be oral or written. Like all real estate contracts, express easements should be reduced to writing to be enforceable in a court of law. * An Encumbrance is a burden on the property. All easements are encumbrances but not all encumbrances are easements.

Unenforceable Deed Restrictions:

Any restriction that violates public policy (state or Federal law) or is discriminatory is not enforceable. Other unenforceable restrictions include: Any restriction that limits the new owner's right to sell at a future date. Restrictions that have not been enforced in a timely manner. (Neighbor put up a fence years ago in violation of the restrictions and no one complained.) The courts may say the Statute of Limitations would not allow enforcement now. Any restriction that limits the protected classes under Federal Fair Housing. All restrictions are placed on the public record (recorded in the county where the property is located for constructive notice.) A new restriction can be placed on a property by a vote of trustee in a new subdivision and that restriction would be enforceable.

Eminent Domain

As we discussed in the previous screen, Eminent Domain is the right of the government (federal, state and local) to take private property for a necessary public good. To take property from an owner, three things must take place: The property owner must be paid compensation for the property. The property must be for the public good* The owner must have due process in the courts. *In other words, if the city feels that an area would best serve the public to be rebuilt, the city may take a property through the process of Eminent Domain. A municipality can, therefore, take the existing property and give, or sell the land to a developer to make a new mall or new housing as long as the owner is paid "Just compensation". All public land is vulnerable to eminent domain. Private property is vulnerable to eniment domain. The four government controls that may be exercised over an owner's property are: P - police power, E - escheat, T - taxation, E - eminent domain. Owners must always be given their day in court and they must always be compensated for the property. The government entity seeking the land may offer a different price than the seller thinks it should so the seller has the right to be heard in a court of law. If a seller can prove that he was not adequately compensated; that the property was not used for public good; or that he did not have his day in court, he can sue for a "Taking." This means that the government did not fulfill its obligation and that the land was taken illegally. Condemnation: is the court action used when the right of eminent domain is exercised. It does not refer to deteriorating buildings in this case.

Escheat

Because property must always belong to someone, the state of Florida steps in if there is no will and no heirs.Only the state where the property is located can do this: it is not a right of the federal government. The state is granted the ability to do this under the laws governing government interference. The government (State of Florida) has the power in our private properties. They have Police Power, Eminent Domain, Taxation, and Escheat powers in our properties. We will discuss these powers further within the rest of our course, and below. A good memory tool to remember the powers of the government is P.E.T.E. Police power - The constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support the public health, safety, morals and general welfare. Eminent Domain-The right of the government (both federal and state), public corporations, (school districts, sanitation districts),public utilities and public service corporations (railroads, power companies)to take private property for a necessary public use, with just compensation paid to the owner. Taxation -The right of the government to collect taxes on properties to support the cost of public services. Escheat - If property owners die without a Will and with no heirs their property "Escheats" or belongs to the state.

The Role of the Title Company

Because the buyer does not have the time or the knowledge to search public records for constructive notice, the buyer hires a title company to do it for him. Title companies are used in all states but title insurance is legal in 48 states- the others use abstracts. The procedure is the title company hires individuals called Abstractors or title searchers, who search the record to find the chain of title. The chain of title is exactly that- a series of owners in a row that have owned the property in the past. When the file is complete and all the owners have been noted, an abstract (history) is created. If there is a break in the chain of title, the abstractors send it, with a notation, to the attorney who is reviewing the file. If the attorney for the title company feels that there is a break in the chain of title or there is a question about the title, he files in a special court for a Suit to Quiet the Title. Once a court has heard the case and made a determination, the title is cleared and the property may be transferred. Two items that will cause a Suit to quiet the title suit are: Color of Title a break in the Chain of Title Color of title means there is a claim against the title- such as Adverse Possession. This must be cleared by the courts before the property can be transferred. A break in the Chain of Title means there is an unexplained gap, or break in the ownership of the property. Most of the time, it is a name change on the part of a married woman but whatever the change, it must be corrected by a Suit to Quiet the Title before the property can be transferred. When all of this is cleared the attorney issues a Certificate of Title which indicates that all problems have been cleared and the title company can issue title insurance.

Easements (Cont'd)

Easement by Prescription: Easement by prescription is an easement by adverse possession. The claimant has used the property for the time period set by law. (Under Florida Law it is 20 years). If the time element has been fulfilled, the claimant can go to court to get the right to use the land forever. Requirements to create Prescriptive Easements: Possession -an individual must be in possession of the property for the prescribed time period required by the state where the property is located. Open - the individual must make "open use" that is, everyone must be able to see what the person is doing. (No underground tunnels etc.) Actual: similar to actual notice, the person must be in possession of the property for the prescribed time for everyone to see. Continuous: for the statutory time period. Hostile: in violation of the owner's legal description by using the owner's property and claiming as one's own.

Termination of Easements

Easements can be terminated by: The purpose of the easement no longer exists. (a new road is built, etc.) The holder of the easement abandons it for the statutory time period. A merger of the properties occurs so an easement is not needed. Destruction of the property or the easement (such as being at the bottom of a new dam filled with water.) The owner of the easement issues a Quit Claim deed back to the property owner that granted the easement. Excessive use occurs as determined by the courts.

Police Power (Cont'd)

Environmental Protection Laws: Environmental protection standards are set up by the federal EPA and state departments of health to regulate air, water, and noise pollution, as well as other environmental conditions, including the cleanup of hazardous substances. Examples of environmental issues that concern real estate licensees and consumers are asbestos, lead based paint and other lead hazards, radon, formaldehyde, mold, carbon monoxide, electromagnetic fields, groundwater contamination, underground storage tanks, and waste disposal sites.

Government Interference to Private Ownership

Even under the allodial system of government, private home ownership is subject to government interference called P.E.T.E. This stands for: Police Power Eminent Domain Taxation Escheat Police Power is the right of the local, state and federal government to make laws for the good of all. Some examples of police power are: Zoning laws which regulate: use of land lot sizes types of structures permitted building heights setback lines (how far from the street an improvement can be built) density (how much land to improvement ratio or people per acre) types of animals that are permitted A violation of zoning requirements makes a title unmarketable. If the seller or a broker misrepresents the actual permitted zoning use of a property, a buyer may rescind (take back) the transaction, based on misrepresentation. Building codes: Buildings codes are designed to provide minimum standards. The goal is to safeguard the health, safety, and welfare of the public by regulating and controlling the design, construction, quality, use and occupancy, location and maintenance of all buildings and structures. Codes are enforced by the issuing of building permits and certificates of occupancy, and by inspections, with fines being imposed on violators.

Private Restrictions Placed on Property

Most private property has some type of limitations placed there by a previous owner or developer. Here are some of the types. Deed Restrictions: A grantor making the deed may make certain restrictions on the use of the property. For example, the owner may say that no alcohol can be served on the premises, or that only certain types of homes can be built. Most of the deed restrictions are called Restrictive Covenants. These restrictive covenants run with the land forever, unless some legal remedy is sought to remove them. Typical restrictive covenants deal with subdivision requirements and may limit housing to certain types and sizes; may prohibit above ground pools; may limit the number of pets or parked cars, etc. A buyer has a right to know about any covenant which would be limiting to him prior to closing and it should be disclosed. A restriction is a use encumbrance. Restrictive covenants limit the use of a property. There are two types of restrictions: Limiting restrictions: State things you can never do (No fences, no dog runs etc.) Affirmative restrictions: State things you must abide by. (Set back requirements, minimum square footage, front of house must be brick etc. Who can enforce these restrictions? Enforcement of restrictions is always done by a court of law. Who can bring an action asking for enforcement? Anyone who is under the same restrictions who feels there has been a violation.

Government Interference (Cont'd)

P. E. T. E. Police Power Eminent Domain Taxation Escheat Eminent Domain: Process is called Judicial Condemnation Owner must be compensated Must be for public good Owner must have due process Taking: is a law suit if owner feels it is not for public good Taxation: Taxation is the right the government has to collect funds to pay for public services. There are two types of taxation: Special Assessment and Ad Valorem. These taxes will take priority in the sale of a home and need not be recorded to be valid. Special Assessment Taxes are used for a "one-time" fee for something that affects one piece of property at a time. For example, if new curbs and gutters are installed by the city in front of a home, the owner will be assessed a special assessment tax to pay for these improvements. The tax will be based on a frontage foot basis, rather than by value. When the special need is paid for the tax is dropped. Ad Valorem taxes actual mean "value added tax" but these are always real estate taxes, based on actual value of the home, assessed value of the home, and the year's tax rate per hundred dollars of assessed value. The taxes are based on the city and/or county needs for services such as fire, water and police protection as well as schools, libraries and ambulance districts. P. E. T. E. Police Power Eminent Domain Taxation Escheat Escheat: All property must have an owner. When an owner dies without a WILL and without HEIRS, the property reverts back to the state. Similarly, if the property is abandoned (through lack of paying taxes), the ownership of the property goes to the state. NO WILL+ NO HEIRS= ESCHEAT to the STATE.

Additions to Chapter 475 F.S.

Part III: Commercial Real Estate Sales Commission Lien Act (Sales act) A listing agreement for the sale of commercial real estate will entitle the broker to a lien on the net proceeds from the sale. Requirements for placing the lien: The broker must disclose before or at the time of executions of the agreement the broker's lien right using language prescribed in chapter 475. F.S. The broker must deliver a commission notice to the owner and closing agent within 30 days of the time a commission is earned. The delivery must also be one day before the closing. If there is no dispute from the owner within five days of closing, the owner confirms the commission and the closing agents will pay the broker from the owner's net proceeds. Note: This lien does NOT attach to any interest in real estate. Reference: 475.700 -475.719 F.S. Part IV: Commercial Real Estate Leasing Commission Lien Act (Leasing act) A written brokerage agreement for the leasing of commercial real estate will attach a lien to the owner's interest in the commercial real estate. Requirements: Disclosure of lien must occur at the time the brokerage agreement is signed or prior to. Language must be substantially similar to 475.803(6), F.S. No later than 90 days from the time a tenant takes possession, the broker must record a lien notice in the county or counties where the real estate is located. The "lien notice" must be delivered to the owner within seven days. The lien is effective for two years. If a renewal commission is earned, the lien is effective for 10 years. Extension provisions exit. If the commission is not paid, the broker must foreclose the lien in a manner similar to a mortgage foreclosure. Reference: 475.800 - 475.813 F.S.

Adverse Possession

Squatter's rights are a concept that has been present since the founding of the United States. Simply put, if a person does not take care of his property, someone else can make claim to the property. Frequently, this appears in fence line disputes when one owner has placed the fence inside his property line and another owner has mowed the grass inside the first owner's property. If this continues for the statutory period of time, it is possible to make claim to that property. Adverse possession is based on the common law which says that all owners should be aware and in possession of their property at all times. For Adverse Possession to take place (adverse to the owner's title), certain items must be in place. The acronym is P.O.A.C.H. P- Possession must be in the hands of the claimant O- The claim must be open for all to see A- The claim must be actual, clearly visible for everyone to see C- The claim must be continuous for the statutory period of time. In Florida, the minimum is 7 years. H- The claim must be HOSTILE to the owner's title- meaning that another person has encroached within the boundary of the owner; contrary to the legal description of the owner. If the claimant can prove in a court of law that all of these conditions can be met, it is possible that the claimant will get that portion of land. The land would then be transferred by involuntary alienation to the claimant. This procedure would require legal counsel for the parties.

Requirements of a Deed

The following must be in place for a deed to be valid: The grantor must be of sound mind and of legal age to convey property: the grantee has no such restrictions to receive the property. If it can be proven that the grantor was not of sound mind, the deed can be voided. Consideration means a promise exchanged for another promise, as well as a recitation of an amount of money. A deed usually says for ten dollars and other valuable consideration the property is transferred. Consideration will be addressed again in the Contract section. Words of conveyance must be used. Specific words have special meaning in each type of deed, for example "grant and convey" are usually used on a general warranty deed and "release, remit, and quitclaim" are used in a quit claim deed. A complete and accurate legal description must be used so that a reasonably competent surveyor could find the property. No two legal descriptions are the same. The legal description serves as a description of one specific property much the same as a social security number is assigned to one person in the United States. The grantor must acknowledge the deed, which means the grantor must sign the deed indicating that he, the grantor, conveys the property of his own free will without duress, menace or undue influence*. The grantor signs this promise in the presence of a notary. The notary signs on her own line and this is called attestation, meaning the notary attests that the grantor is who he says he is and has signed this pledge in her presence. In Florida, two witnesses are required to validate the signing of the deed. Delivery and Acceptance takes place. The grantor delivers the deed to the grantee who must accept the deed. After the acceptance by the grantee the property legally is transferred. If the grantee refuses the deed, there is no transfer. * Menace means threat of violence or bodily harm; duress means actual harm; and undue influence means using power or influence unfairly over another. An example of undue influence would be when an unscrupulous nephew has his great aunt sign over a piece of property to his advantage and gain; perhaps to her disadvantage, simply because she loves and trusts him.

Four Types of Easements:

The four types of easements are: Appurtenant In gross Necessity Prescription Appurtenant Easement: easements for adjacent properties. These easements run with the land and can't be sold separately. The two parties of an appurtenant easement are Dominant tenement, the property benefiting from the easement and Servient tenement, the property burdened by the easement. Easements in Gross: Gross easements are NOT tied to any land, but are instead owned by a person or company. For that reason, they are considered a personal interest. Gross easements are usually commercial in nature and can be sold to others. A utility easement is an example of an easement in gross. Easements by Necessity: (Operation of Law) are also sometimes referred to as "easement by necessity" or "easement by implication" and are created by a court of law. An easement by necessity would be granted to a landlocked property to provide egress. An example is a farmer sells 80 acres of ground between his barns and the road. The court would say that the farmer has the right to an easement by necessity to get feed to his animals from the main road.

Priority of Liens

The priority of liens in foreclosure is important: it indicates who gets paid first. 1. Cost of the sale (paid to the county for advertising, legal fees etc.) 2. Property taxes (These do not have to be recorded.) Ad Valorem Taxes Special Assessment Taxes 3. First mortgage or Deed of Trust 4. All other mortgages and other types of liens recorded with priority established by date of recording including mechanic and materialman's liens. If there is not enough money for all the liens to be paid, the court may issue a deficiency judgment against the borrower. The total assets of the borrower are then available for collection by the debt holder. Everything is available to the debt holder including cars, boats, campers, airplanes etc.

Understanding Title and Transfer

The word "title" used in a real estate context is very different from that of a car title. There is no one piece of paper which is a title the way a car title is used for the sale of an automobile. Instead the word "Title" refers to the collection of rights that a person has in the ownership of real property. Transfer of ownership (of title) is done by deed or operation of law. It is done voluntarily or involuntarily. When the deed is issued and all parts of it are properly executed, the new owner will have the same rights as the previous owner to the property. Alienation: means transfer when used as a real estate term. Voluntary alienation means the grantor (owner of the property) had a choice and made the decision to transfer his property to someone else. Involuntary alienation: means the grantor (owner of the property) did not have a choice; that the law determined that the property would be transferred as in eminent domain or other government interferences. Eminent domain means the taking of private property for public good, such as the taking of a home so a new highway could be built. Eminent domain will be discussed in more detail later in the course.

Transfer by Involuntary Alienation

There are four ways that property is transferred by involuntary alienation. These are Foreclosure Escheat Eminent Domain Adverse possession Transfer by descent: When a person dies without a will, the state has established who will inherit the property. The term DESCENT means the hereditary succession of the property by operation of law- meaning the state has determined who the heirs will be. The person who dies without a will dies Intestate. The state of Florida then takes over and establishes who the heirs will be by the probate courts establishing the line of descent and distribution. In other words, the courts determine who will inherit and in what order. When the phrase By Operation of Law is used, it means that the courts have intervened. After the line of descent and distribution is established, the courts will then release the property to the heirs, usually with some type of deed with no promises of ownership to the heirs.

Voluntary Alienation

There are two ways to voluntarily transfer real property, by deed or by will. A grantor transfers his property by deed when the property is sold or when the grantor wishes to give a gift of property to another. The quality of the ownership will depend on the quality of the deed, which will be discussed shortly. In order for a deed to be valid, the transfer must occur during the grantor's lifetime. If the transfer occurs after the death of the grantor, the transfer is made by will. A grantor conveys (transfers) his property to another through a will. The person making the will is called the testator and the person receiving the property is called the devisee. Real property given in a will is a devise and personal property in a will is a bequest. The person receiving the bequest is a beneficiary. Here are the players: * Grantor gives to the Grantee a Deed Testator makes a will Devisor gives to a Devisee a Devise Testator gives to a Beneficiary a Bequest.

Procedure of Lawsuits for Liens

These are the steps to foreclosure if an owner did not pay the bill for the work within the specific time period, or if he paid a general contractor, who did not pay the subcontractor, An Attachment is issued by the court. This means the property is "tied-up" and it is a red flag to all title investigators. If the lien is not paid in this time period, the next step is: A Lis Pendens is filed. This notice of "pending litigation" is recorded in the public record section of the county courthouse. Usually, a property with litigation pending cannot be transferred. The case goes to the courts for Judgment. If the property owner loses in court, all of his real and personal property will have a general lien. If any property is sold, proceeds are used to pay the debt. If the lien is still not settled, the judge issues: A Writ of Execution which means the sheriff is ordered to sell the property on the courthouse steps to satisfy the debt. Can a mechanic's lien ultimately result in a foreclosure on the house? The answer is yes, but the mechanic's lien will be paid according to its priority - place in line of liens.

Title Insurance

Title insurance is issued in those states which allow it to protect either the buyer or the lender or both for time previous to the closing date. The Owner's Policy is a title policy made out for the price of the property at the time of closing. This policy is for protection against claims of others which may not have surfaced prior to closing. (For example, a mechanic's lien shows up.) The value of the policy never goes down and may go up if there is an inflation clause added. There are some strict legal words in the policy so the buyer should read it carefully before purchasing. The owner's policy is also called the Mortgagor's policy. The lender also seeks protection against claims on the property so the buyer purchases a lender (Mortgagee's) policy to protect the lender as a condition of obtaining the loan. The mortgagee's policy decreases in value as the loan amount goes down but the Mortgagor's policy does not.

Notice to Legal Title

To avoid situations under Caveat Emptor, (Let the Buyer Beware!) the buyer is charged with the responsibility of Actual and Constructive Notice. Actual Notice: The buyer is charged with the responsibility of looking carefully at that which he is buying. Actual notice is seeing with your own eyes and accepting (or rejecting) what can be seen. This usually shows up when a buyer does not like a cracked driveway or a broken window. It is the buyer's responsibility to ask the seller to fix these items at the time the sale contract is written. Constructive Notice: is public record, such as the abstract of title, any judgments against the property, any liens against the property etc. The title company abstractors usually find these deficiencies and report them to the buyer. One of the items searched for is a notice of Lis Pendens, which means "pending litigation." This tells the buyer and the world that there is a law suit going on with the property and for the buyer to beware.