Lesson 8

Eminent Domain

Allows the government to take private property of individuals for public use through a suit for condemnation. The law requires the gov to pay the owner compensation.

Cloud on Title

Any sort of claim or other encumbrance which may cause issues to the owner's full title or enjoyment to the property. A title cloud is sometimes referred to as a title defect, and these defects usually should be removed in order to clear the title. The process of removing title defects on the public record is known as perfecting the title.

Torrens System

Certificate of title accompanied by the owner's signature is filed with the registrar's office and used to verify future transfers.

Abstract of Title

Condensed history of all instruments on record affecting the title to a property. Prepared by a title abstractor after researching public records.

The Bargain and Sale Deed

Contains only an implied warranty that the grantor holds the title and possession of the property. This type makes no warranties other than the implication that the grantor has title rights and the power to convey those rights.

The Quitclaim Deed

Contains the least amount of protection to the grantee, which often includes no covenants or warranties whatsoever. In other words, this only conveys whatever interest the grantor has in the property (if any). It's often used to clear the clouds on title and therefore are simple docs used to perfect title and may not need the inclusion of warranties between the parties.

Voluntary Alienation

Either by gift or sale; to transfer title during his or her lifetime, an owner must use some form of deed of conveyance. It means the owner willingly transferred his or her property to another. The typical document used in this is a deed.

Descent and Distribution

Every state has one. It decides how property is transferred when a person dies.

Habendum Clause

Follows granting clause when necessary to define the terms of ownership to be enjoyed by the grantee, This usually contains the words "to have and to hold" and would indicate the fee estate or like estate being granted.

Erosion

Gradual wearing away of the land by the action of natural forces.

Quiet Title Action

Legal process of bringing suit in a court to settle disputes over title or title defects. This type of legal proceeding can also be used to clear clouds on title. Just as with any typical lawsuit, both sides are allowed to present evidence and a judge will rule in favor of one party which in turn can be used to clear the public record.

Standard Coverage

Most standard policies will not cover situations arising from questions involving the survey, defects of which the policyholder has or should have knowledge or unrecorded documents.

Description of Real Estate

Must be a legal description that is understood by the parties

Consideration

Must be acknowledged by the grantor and in many states should be stated in U.S. dollars or an equivalent currency.

Grantee

Must be named in the deed in such a way that he or she can be identified,

Signature of Grantor

Must be signed by all the grantors named in the deed; a seal is sometimes required.

Granting Clause

Must contain words that state the grantor's intention to convey the property.

Grantor

Must have legal existence and be legally competent to convey the title (usually 18)

Extended Coverage

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

Certificate of Title

Prepared by an attorney without preparation of an abstract; attorney provides an opinion on the ownership of title; is not a title insurance policy.

Foreclosure

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

Title Insurance Coverage

Protects policyholders from past and future claims on their property. These claims can be another person trying to claim ownership on a piece of property, fraud or forgery of title documents, easements and other items outlined in the insurance policy. Protects the insured against loss resulting from certain defects in the title, such as forgery or defect in the public record.

Title to Torrens

Registered property never can be acquired through adverse possession.

The Special Warranty Deed

Similar to the general warranty deeds except that this only warrants during the period of ownership by the seller. Therefore, the Covenant of warranty forever is generally excluded in these unless specifically noted or amended on the deed itself. This type may be used on behalf of 3rd parties administering a transfer such as a custodian or executor to a will.

Avulsion

Sudden tearing away of the land by the action of water or earthquake.

Adverse Possession

The actual, visible, hostile, notorious, exclusive and continuous possession of another's land under a claim of title; periods of time may be tacked on by successive owners/ tenants. This legal right is sometimes referred to as "squatter's rights" since a person is simply taking over possession and care of a property for a period of time which may result in legal ownership. This prescriptive period varies by state law, but is usually significant such as 30 years.

Covenant of Warranty Forever

The grantor guarantees that if the title is challenged in the future that the grantor will bear any expenses relative to the future title defense.

Covenant of Quiet Enjoyment

The grantor guarantees that the title is good against 3rd parties and that the grantee can fully enjoy the property without interruption from others.

Covenant of Seisin (Seizen)

The grantor has the power and authority of title and has the right to convey that stated interest.

Covenant of Further Assurance

The grantor promises to obtain and deliver any instrument required to correct and future defects in the title or related instruments.

Covenant Against Encumbrances

The grantor warrants that the property is free from any encumbrances except those specifically stated in the deed.

General Warranty Deed

The most common deed used in real estate because it is the deed which provides the grantee the greatest protection in the way of covenants and guarantees provided by the grantor. Most transfers are completed with a general warranty deed due to the legal protections and basic protections provided by the parties. The covenants found within a general warranty deed would include: Covenant of seisin, against encumbrances, of quiet enjoyment, of further assurance, of warranty forever.

Accretion

The slow accululation of soil, rock and so on deposited by the movement of water on the owner's property.

Attorney's Opinion of Title

The title attorney examines the abstract for flaws and prepares a written opinion of the condition of ownership. This opinion is used by the title insurance company to determine coverage and premiums.

Subrogation

Universal concept among all title insurance policies that says all legal costs incurred in defending the title against claims will be covered. The title company has the rights to defend a claim against title on a property which is insured under the title insurance policy.

Deeds

Very important since they convey interest in real estate. It's a contract and must meet all test of the contract law in addition to the following requirements: grantor, grantee, consideration, granting clause, habendum clause, description of real estate, signature of grantor, acknowledgement, delivery and acceptance, expectations and reservations

Methods for examining title rights:

Very important to determine coverage 1. Abstract of title and lawyers opinion 2. Torrens system 3. Cloud on title 4. Quiet title action

Intestate

When a person dies intestate, the decedent's real estate and personal property pass to their heirs according to the state stature since there was no will in place.

Testate

When a person dies testate, it mean as a person has died with a will in place. in this case the will decides what happens to the property. A will takes effect only after the death of the testator; until then any property conveyed by the will can be conveyed by the owner prior to their death.State laws usually require that on the death of a testator their will must be filed with the court and probated to pass title to the devisees.

Involuntary Alienation

When property is transferred without the owner's consent, There are several methods according to law that a property transfers involuntarily: escheat, eminent domain, foerclosure, accretion, erosion, avulsion, reliction, adverse possession

Escheat

When someone dies intestate and leaves no heirs, the title of the estate goes to the state.

Reliction

When the new land is acquired as water recedes.

Deeds

Written instruments that transfer title from one party to another.