Chapter 10: Deeds
Voluntary Alienation
An unforced transfer of title by sale or gift from an owner to another party. In other words, an owner transfers title to a property to a buyer in exchange for a consideration. - If the transferor is a government entity and the recipient is a private party, the conveyance is a public grant. - If the transferor is a private party, the conveyance is a private grant. - A living owner makes a private grant by means of a deed of conveyance, or deed. - A private grant that occurs when the owner dies is a transfer by will.
Types of Wills
* Witnessed: In writing and witnessed by two disinterested people. * Holographic: In the testator's handwriting, dated and signed. * Approved: On pre-printed forms meeting the requirements of state law. * Nuncupative: Made orally, and written down by a witness; generally not valid for the transfer of real property.
Habendum Clause (Deed)
Describes the type of estate being conveyed. - It reaffirms the extent of ownership that the grantor is transferring - for example, a fee simple estate, a life estate, or an easement. It begins with the words "to have and to hold..."
Intestate Proceeding (if a person dies "intestate)
If there are heirs, the estate will pass to them according to title by descent or the state's laws of succession. If there are no heirs, the estate will go to the state or county after all claims and debts have been settled.
Parcels of Real Estate
Legally described by "the north-south area between consecutive meridians."
Changes in Property Boundaries
May change over time due to: 1) Accretion: The gradual addition of land by alluvial deposits of soil. This happens naturally as a result of the movement caused by streams or rivers. Any land added to the bank becomes the property of the owner. This material added to the property through accretion is called alluvion. 2) Avulsion: The loss of land as a result of its being washed away. Generally, an owner does not lose title to land that is lost by avulsion - the boundary lines remain the same. However, the owner does lose title to land that is washed away by erosion. 3) Reliction: The gradual receding of water from its usual watermark. If land that was once covered by water becomes uncovered, it is deemed alluvion and the "new" land then belongs to the owner.
Executor (if male) or Executrix (if female)
Named by the testator to oversee the settlement of the estate. If a minor is involved, the testator may identify a guardian to handle legal affairs on behalf of the minor.
Quitclaim Deed
A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest. This form of deed is commonly used for transfers within a family and in divorce settlements. - Can remove a cloud from the title. - Transfers real and potential interests in a property, whether an interest is known to exist or not. The grantor makes no claim to any interest in the property being conveyed and offers no warrants to protect the grantee. - Also used to clear title rather than convey it. Where there is a possibility that prior errors in deeds or other recorded documents might cloud (encumber) the title, the relevant parties execute a quitclaim deed to convey "any and all" interest to the grantee.
Last Will and Testament
A legal instrument for the voluntary transfer of real and personal property after the owner's death. It describes how the maker of the will, called the testator (if male) or testatrix (if female), wants the property distributed. A beneficiary of a will is called an heir or devisee. The property transferred by the will is the devise.
Deed (Deed of Conveyance)
A legal instrument used by an owner to transfer title to real estate voluntarily to another party. Occurs when a living owner makes a private grant. Most contain the following elements: - Grantor - Grantee - Act of conveyance - Consideration - Legal description - Habendum clause - Designation of limitations - Exemptions and reservations affecting the title - Signature of the grantor - Delivery and acceptance of the deed - Acknowledgement - Recording
Accession Rights
Owners of real property have the right to all of what their land produces or all that is added to the land, either intentionally or by mistake.
Testator (if male) or Testatrix (if female)
A person who has made a will.
Grantee
A person who receives a conveyance of real property from a grantor. - The one to who a deed is given.
Referee's Deed
Real property is awarded by auctioneer (referee) when property is bought at auction; carries no warranties but implies grantor has legal title. Used in foreclosures.
Alienation
Refers to the transfer of a title to real estate. - Occurs voluntarily and involuntarily. - When the transfer uses a written instrument, the transfer is called a conveyance.
Color of Title (Adverse Possession)
Results when a grantee has obtained defective title, or received title by defective means, but occupies the property as if he or she were the legal owner. A court may hold that a claim of right or a claim of colored title is a valid reason for the possession. - Adverse possessors think they own the deed but there is a defect (no closed bounds, lack of signature, not payed taxes (in many states).
Transfer Tax
State or local tax payable when title passes from one owner to another. - The tax is based on the actual price of the property conveyed, thus enabling taxing authorities to ascertain current market value for ad valorem tax purposes. - Payment of the tax is evidenced on the deed. - Also called: "Documentary Stamp Tax" on a conveyance of real property. Exemptions from transfer tax include: - Transfer within the immediate family - Consideration less than a certain amount - Transfer between government entities or non-profit organizations - Trust deed transfer and reconveyance - Tax deed - New York DOES require a transfer tax when real property is conveyed.
Full Covenant and Warranty Deed
The deed MOST USED in real estate transfers and offers the greatest protection of any deed. - With this type of deed, the grantor gives certain covenants or warranties that promise the grantee will have ownership of the property that is unchallenged.
Consideration
The deed must be accompanied by valuable (monetary) or good (love and affection) consideration, but the amount need not reflect the actual price in most cases. - The sales contract will state the actual consideration. - Many deeds recite a nominal consideration, such as "for $1.00 and other good and valuable consideration."
Accretion
The gradual addition of land by alluvial deposits of soil.
Bargain and Sale Deed (without Covenants)
The grantor covenants that the title is valid but does not warrant against encumbrances or promise to defend against claims by other parties. - This form of deed implies that the grantor has title to the property, but the grantee doesn't have much recourse if the title comes up with defects down the road. - "I own, but won't defend." - This form of deed is also common in New York City, as well as in foreclosures and tax sales.
Covenant of Seizen
The grantor guarantees that he truly holds title to the property and has the right to convey it.
Acknowledgement
The grantor must declare in front of a notary or other authorized person that the grantor's identity and signature are genuine, and that the deed execution was a free, voluntary act. - The grantor then receives a certificate of acknowledgment signed by the notary. - Without the acknowledgement, the deed between the grantor and grantee is valid. However, the acknowledgement is required for the deed to be recorded. - A deed without an acknowledgement, therefore, tends to endanger a person's claim to a property.
Bargain and Sale Deeds (With Covenants)
The grantor warrants only against title defects or encumbrances not noted on the deed that may have occurred during the grantor's period of ownership or trusteeship. - "I own and will defend against my acts only." - This form of deed is often used in real estate transactions in New York City. - Buyers often use title insurance as protection against any future title issues that may come up. In other states, the bargain and sale deed with covenants is known as a special warranty deed.
Probate
The legal process by which a court determines who will inherit a deceased person's property and what the assets of the estate are. - Real property may be exempted from this if it is held in a land trust. - Probate of real property occurs under jurisdiction of courts in the state where the property is located, regardless of where the deceased resided. The probate court's objectives are to: - Validate the will, if one exists. - Identify and settle all claims and outstanding debts against the estate. - Distribute the remainder of the estate to the rightful heirs.
Grantor
The person who transfers the title to real property. He/she: - Must be competent to make the transfer. Someone who is intellectually challenged cannot convey title to real estate. - May not be a minor in NY - at least 18 years old). - Must be clearly identified in the deed, and he or she should convey title using the same name under which he or she acquired the title. - Must be alive at the time of transfer. If the title is vested in two or more persons, each owner must convey his or her separate interest. They usually do so in one deed, although conveying title using separate deeds would be valid.
Adverse Possession
The process by which an owner can lose title to his or her property because an adverse possessor entered, occupied, and used the property without the knowledge or consent of the owner, or with the knowledge of the owner who failed to take any action over a ten-year period. - A person takes possession & use of a property belonging to another. - To claim the legal title, the possession must be open, notorious, hostile & uninterrupted for a certain period of time, and in some states...pay taxes. - In New York, the possession must be continuous and uninterrupted for ten years. - THE OWNER CAN AVOID LOSING POSSESSION OF THE TITLE BY inspecting the property and evicting any trespassers found.
Avulsion
The sudden loss of land as a result of its being washed away.
Special Purpose Deeds
A special purpose deed is one tailored to the requirements of specific parties, properties, and purposes. -correction deed -gift deed -deed of release -foreclosure deed -timber or mineral deed -court order deed
Metes and Bounds
A system for the legal description of land that is used in describing the boundary lines of land, setting forth all the boundary lines together with their terminal points and angles. - Metes (length or measurements) and Bounds (boundaries) description is often used when a great deal of accuracy is required. - Often CUMBERSOME AND INACCURATE.
Lot and Block System
A system for the legal description of land that's also called the "Recorded Plat Method." It's used to describe properties in residential, commercial, and industrial subdivisions. - Under this system, tracts of land are subdivided into lots. The entire group of lots comprises the subdivision. - In a large subdivision, lots may be grouped together into blocks for ease of reference. - The entire subdivision is surveyed to specify the size and location of each lot and block. - The surveyor then incorporates the survey data into a plat of survey, or subdivision plat map, which must comply with local surveying standards and ordinances. - If local authorities accept it, the subdivision plat map is recorded in the county where the subdivision is located. - The recorded lot and block numbers of a subdivision parcel, along with its section, township and meridian reference, become the property's legal description.
Rectangular Survey System
A system for the legal description of land. Also known as the "government survey method," and is used to simplify and standardize property descriptions as a replacement for the cumbersome and often inaccurate metes and bounds method. - Used to create townships (which is 36 square miles and a section is one square mile or 640 acres). - The system was further modified to facilitate the transfer of large quantities of government-owned western lands to private parties. - The rectangular survey system works well for describing properties that are square or rectangular in shape since these can be described as fractions of sections. However, for an irregular shape, such as a triangle, the rectangular system is inadequate as a method of legal description. - The full description has to include metes and bounds OR lot and block description. - This system is based on sets of intersecting lines: - Principal meridians run north and south. - Base parallels run east and west.
Involuntary Alienation
A transfer of title to real property without the owner's consent. - This occurs primarily by the processes of descent and distribution, escheat, foreclosure, eminent domain, adverse possession, and estoppel. - DOES NOT OCCUR AS A RESULT OF DEATH OF THE OWNER.
Legal Descriptions
Used in most agency Agreements, All Deeds, and All Real Estate Sales Contracts. - Must indicate permanence and provide sufficient information for a surveyor to locate the property. - Provides a basis for court rulings on encroachments and easements. Required for: - Public recording - Creating a valid deed of conveyance or lease - Completing mortgage documents - Executing and recording other legal documents The three accepted methods of legally describing parcels of real estate are: - Metes and Bounds - Rectangular Survey System, or government survey method - Lot and Block Method, or recorded plat method
Bounds
What landmarks are called when legally describing a parcel of real estate.
Dedication by Deed
When a subdivision developer turns the subdivision road or the common ground in the subdivision over to the local government, he or she does so by what's known as dedication or dedication by deed.
Delivery and Acceptance
Actual delivery of the deed by the grantor and either actual or implied acceptance by the grantee. actual or implied acceptance by the grantee. - THIS IS A REQUIRED STEP IN ORDER FOR THE TITLE TO PASS. - Once accepted, the title passes to the grantee. - Legal policy mandates that a deed to real property be a matter of public record; therefore, subsequent to delivery and acceptance, a deed must be properly recorded.
