Unit 10
9 of 10 - What type of will may or may not be found valid? Holographic (hand-written) Nuncupative (given on a deathbed) All of the above None of the above You answered incorrectly
All of the above
(Quiz) What is a will?
A legal instrument for the voluntary transfer of real estate after death.
Depending on state law, a deed must meet the following requirements for validity. The deed must:
1 Be delivered and accepted. 2 Have a competent grantor and legitimate grantee. 3 The grantor must be living, of legal age, and mentally competent. If grantor is a corporation, the signing party must be duly authorized. The grantee must be living or have legal existence, but need not be of legal age or mentally competent. 4 Be in writing. 5 Contain a legal description. Contain a granting clause. The deed must express the grantor's present desire and intention to transfer legal title to the grantee. 6 Include 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. 7 Be signed by the grantor. The deed must be signed by the grantor, but need not be signed by the grantee unless the deed contains special provisions requiring the grantee's acceptance. Grantors may give power of attorney to other parties, authorizing them to execute deeds on their behalf. The power of attorney authorization should be recorded to ensure a valid conveyance. 8 Be acknowledged. The grantor must declare, before 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. Some states require acknowledgment to complete a valid conveyance. Most states require it before they will record the deed. A deed without an acknowledgement, therefore, tends to endanger one's claim to a property.
What is the difference between a bargain and sale deed and a general warranty deed?
A bargain and sale deed covenants valid title but may not warrant against encumbrances or promise to defend against claims. A general warranty deed is a bargain and sale deed that includes assurances of valid title, no encumbrances, and willingness to defend against all claims.
(Quiz) What is a documentary stamp tax?
A transfer tax based on the price of the property being conveyed
(Quiz)What document shows legal alienation of a property?
Deed
(Quiz) What is "color of title?"
Defective title, or title received by defective means
(Quiz) A municipality wants to build a water treatment facility, and requires some privately owned land to do so. What procedure enables the municipality to buy the property, even against the owner's wishes?
Eminent domain
The principal conveyance clauses are:
Granting clause, or premises clause -- the only required clause; contains the conveyance intentions; names the parties; describes the property; indicates nominal consideration Habendum clause -- describes the type of estate being conveyed (fee simple, life, etc.) Reddendum clause, or reserving clause -- recites restrictions and limitations to the estate being conveyed, e.g., deed restrictions, liens, easements, encroachments, etc. T enendum clause -- identifies property being conveyed, in addition to land.
Bargain And Sale Deed
In a _______________________, the grantor covenants that the title is valid but may or may not warrant against encumbrances, or promise to defend against claims by other parties. If there is a warrant of defense, the deed is a full warranty ------------------------------. The overall ____________________ covenant is: "I own, but won't defend."
Laws of Descent
Involuntary alienation occurs when a title-holder dies without a valid will. The state's statutes of descent and distribution identify heirs and the respective shares of the estate they will receive. In the absence of heirs, title transfers to the state or county by escheat.
2 of 10 - What is the function of recording a deed? It makes the deed valid. It causes title to pass. It gives constructive notice of ownership. It removes all prior recorded encumbrances.
It gives constructive notice of ownership.
What is an adverse possessor?
It is someone who enters, occupies, and uses another's property without the knowledge or consent of the owner, or with the knowledge of an owner who fails to take any action over a statutory period of time.
What does an estoppel do?
It prevents a person from claiming a right or interest that is inconsistent with the person's previous statements or acts. It can prevent an owner from reclaiming a property that was transferred under false pretenses.
Two legal principles affect transfer of ownership to property by will.
Law of Situs: Real Property, whether devised or inherited, is distributed according to the laws of the state in which the property is located - regardless of where the deceased held legal residence Law of Domicile: Personal property is distributed according to the laws of the state in which the deceased held legal residence, regardless of where the property is located.
Name the forms of involuntary alienation of title.
Laws of descent, abandonment, foreclosure, eminent domain, escheat, adverse possession, estoppel, dedication.
A special-purpose deed is one tailored to the requirements of specific parties, properties, and purposes. The principal types are:
Personal representative's deed -- used by an executor to convey a decedent's estate; also called an executor's deed. Guardian's deed -- used by a court-appointed guardian to transfer property of minors, or mentally incompetent persons. Sheriff's deed -- used to convey foreclosed property sold at public auction; usually executed pursuant to court order. Deed of trust -- used to convey property to a third party trustee as collateral for a loan; on satisfaction of the loan terms, the trustee uses a reconveyance deed to convey the property back to the borrower. Deed in trust -- used to convey property to the trustee of a land trust. Not to be confused with deed of trust. Master deed -- used to convey land to a condominium developer; accompanied by the condominium declaration when recorded. Partition deed -- used to convey co-owned property in compliance with a court order resulting from a partition suit; a partition suit terminates an estate when one or more co-owners want to dissolve their relationship and are unable to do so without the assistance of a court. Patent deed -- used to transfer government property to private parties. Tax deed -- used to convey property sold at a tax sale.
Abandonment (involuntary Title Transfer)
Property that has been abandoned for a statutory period may also escheat to the state or county.
(Quiz) Title to a certain real property is being held in a trust as collateral for a loan. What kind of deed will the trustee use to convey the title to the borrower when the loan terms are satisfied?
Reconveyance deed
What is the function of a deed?
The deed is a transaction document, not an ownership document. It conveys title, when properly delivered and accepted (and registered, in Torrens counties), then ceases to have any transfer function except as evidence that a conveyance occurred, and as evidence of the warrants the conveyor made.
What is the reason an owner would sue for "taking"?
The owner's property was taken by the government under eminent domain, but the owner feels the government did not fulfill its obligation to adequately compensate, did not use the property for public good, or did not give the owner his day in court. Therefore, the owner believes the property was taken illegally.
(Quiz) Why would a property owner file a quiet title suit?
To have an encumbrance removed if the lienholder cannot prove its validity
Covenant, or Warrant, Clauses
Warrant of seizen -- assures that the grantor owns the estate to be conveyed, and has the right to do so Warrant of quiet enjoyment -- assures that the grantee will not be disturbed by third party title disputes Warrant of further assurance -- assures that the grantor will assist in clearing any title problems discovered later Warranty forever; warranty of title -- assures that the grantee will receive good title, and that grantor will assist in defending any claims to the contrary Warrant of encumbrances -- assures that there are no encumbrances on the property except those expressly named Warranty against grantor's acts -- states the assurance of a trustee, acting as grantor on behalf of the owner, that nothing has been done to impair title during the fiduciary period
Types of Wills
Witnessed -- in writing and witnessed by two people Holographic -- in the testator's handwriting, dated and signed; some states also regard typed wills signed by the testator to be holographic 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
Color of title 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.
A private grant that occurs when the owner dies is
a transfer by will.
Involuntary alienation is
a transfer of title to real property without the owner's consent. ------------ occurs primarily by the processes of descent and distribution, escheat, foreclosure, eminent domain, adverse possession, and estoppel.
Execution of a valid deed in itself does not convey title. It is necessary for the deed to be -------------- by the grantee for title to pass.
delivered to and accepted
In a will,Real property is said to transfer by
devise to the devisees.
5 of 10 - The property transferred by a will is called the devise. demise. device assigns
devise.
Transfer of title to real estate, also called _____________, occurs voluntarily and involuntarily. When the transfer uses a written instrument, the transfer is called a __________.
alienation, conveyance
A claim of right is
based on the adverse possessor's occupying and maintaining the property as if he or she were the legal owner.
Personal Property transferred through a will is a
bequest left to a legatee.
Property transferred by the will
called a devise
An amendment or addition to a will is called a
codicil
A living owner makes a private grant by means of a
deed of conveyance, or deed.
An adverse possessor is someone who
enters, occupies, and uses another's property without the knowledge or consent of the owner, or with the knowledge of an owner who fails to take any action over a statutory period of time.
(Quiz) The type of deed that offers the grantee the fullest protection against claims to the title is the
general warranty deed.
When an owner dies _______________ (without a will), the property descends to the legal heirs who inherit according to the State's Statute of Descent and Distribution.
intestate,
(Quiz) Adverse possession is a form of
involuntary title transfer.
last will and testament
is a legal instrument for the voluntary transfer of real and personal property after the owner's death.
Voluntary alienation
is an unforced transfer of title by sale or gift from an owner to another party.
Condemnation
is the court action used when the right of eminent domain is exercised.
Statutory Dedication
is the mean by which an owner or developer transfers private property to the state. It may be in the form of a requirement for any new subdivision to set aside land for streets, parks or future schools. The dedication is a statement on the subdivision plat map giving such lands over to the government. At the moment the plat is recorded, title transfers to the city/county.
warranty deed
is the most commonly used deed. It contains the fullest possible assurances of good title and protection for the grantee. The deed is technically a bargain and sale deed in which the grantor promises to defend against any and all claims to the title.
notorious possession
possession without concealment.
(Quiz) Ways for involuntary alienation to occur do not include... (pick one) abandonment. eminent domain. private grant. foreclosure.
private grant
(Quiz)The court proceeding that generally settles a decedent's estate is called
probate
The most common deeds are ____________________, in which the covenants are defined in law and do not need to be fully stated in the deed.
statutory deeds
three possible channels of probate deliberation, depending on whether there is a will and heirs:
testate proceeding, intestate with heirs, and intestate without heirs.
The term for the author of the will is
testator
In states that use the Torrens system, title passes only when
the deed has been registered on the certificate of title and a transfer certificate has been issued to the new owner.
Special Warranty Deed
the grantor warrants only against title defects or encumbrances not noted on the deed, which may have occurred during the grantor's period of ownership or trusteeship. The deed does not protect the grantee against claims that predate the owner's period of ownership, 0ften used by trustees and grantors who acquired the property through a tax sale.
State law requirements for a valid will...
the testator be of legal age and mentally competent the testator indicate that the will is the "last will and testament" the will be signed the completion of the will be witnessed and signed by the witnesses the will be completed voluntarily, without duress or coercion
(Quiz) A property owner creates a deed, leaving the name of the grantee blank, and puts it in a drawer for several years. One day, a visitor finds the deed, fills in his name as grantee, and attempts to record it. The owner will probably have no trouble disputing the validity of the deed because
there was no intent to deliver it, and no consideration was given.
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
Quitclaim Deed
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. The _______________ is typically 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.
Name and briefly explain five of the nine types of special-purpose deeds. (Additional answers can be found on Page #12)
used by an executor to convey a decedent's estate Sheriff's deed -- used to convey foreclosed property sold at public auction Deed of trust -- used to convey property to a third party trustee as collateral for a loan Deed in trust -- used to convey property to the trustee of a land trust Tax deed -- used to convey property sold at a tax sale
hostile possession
which is a claim to ownership and possession regardless of the owner's claims or consent. Notorious possession and _____________________ give constructive notice to the public (including the legal owner), that a party other than the legal owner is occupying and claiming to own the property.