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Real Estate Title Transfer
disposition - ✔ANS: One of the basic rights to freehold ownership is the right of T/F: The freehold owner may sell, will, give away or lease his property rights as he chooses. How he actually does these things, that is, how the freeholder transfers his interests, either wholly or in part, temporarily or forever, is the subject of this chapter. - ✔ANS: True ownership interest - ✔ANS: when an owner sells his real property, he transfers his Voluntary Transfer - ✔ANS: Also known as voluntary alienation. Typically, real estate professionals are concerned with the voluntary transfer of real property titles. Voluntary transfer involves the intentional conveyance of title, by sale or gift, from one owner to another by means of a deed or a patent. Homeowners selling their homes to interested buyers are engaging in the most common type of voluntary transfer.
- Public Grant 2.Private grant 3.Public dedication - ✔ANS: In general, there are three main types of voluntary transfer: Public Grant - ✔ANS: transfers legal title to land from the government to a private party. Historically, public grants were a common form of title transfer, although it is seldom used today. The Homestead Act of 1862 granted ownership rights to anyone occupying and improving a given area of land for a specified time. These
grants to individuals were conferred by means of a PATENT, a formal document conveying a part of the public domain to a private citizen. Private Grant - ✔ANS: transfers title to real property from one private person to another. Most voluntary t also transfers title to real property from one private person to another. Most voluntary transfers are private grants. In a private grant, title is generally conveyed by deed. The party conveying title is known as the GRANTOR (* vendor in Louisiana) the party receiving title is known as the GRANTEE (* vendee in Louisiana).. Public dedication - ✔ANS: The voluntary conveyance of title as a gift from a private owner to the government is known as deed - ✔ANS: is a written instrument by which title to real property is formally transferred from one party to another. It must be property executed to be valid. T/F: A deed must also be conveyed to and accepted by the party to whom title is being transferred. - ✔ANS: true
- Must be in writing
- Grantor must be identified by name and marital status and must be competent, legally of age, and capable of conveying the ownership rights being transferred.
- Grantee must be identified by name and marital status and must be capable of holding title to the property conveyed. The grantee need not be mentally competent nor legally of age to acquire title.
- A statement of some consideration was given, as money, love or affection must be included although the amount need not be specified. (In Louisiana the amount
2. COVENANT AGAINST ENCUMBRANCES
3. COVENANT OF FURTHER ASSURANCE
4 .COVENANT OF QUIET ENJOYMENT
5. COVENANT OF WARRANTY FOREVER -
✔ANS: The following five covenants are included in a general warranty deed: Covenant of siezin - ✔ANS: assures that the grantor fully possesses or is "seized with" the title he is conveying. Covenant against encumbrances - ✔ANS: - assures the grantee that the property is free from liens and encumbrances, other than those specified in the deed. Covenant of Further Assurance - ✔ANS: - promises that the grantor will defend the grantee's title against all claims which may arise from the period prior to transfer. Covenant of Quiet Enjoyment - ✔ANS: - protects the grantee's rights to physical possession of the property without being disturbed by other parties making claims against his rights. Covenant of Warranty Forever - ✔ANS: -underwrites each of the other four covenants and guarantees absolutely the grantees ownership rights and title. The grantor agrees to compensate the grantee for losses suffered from the breach of any of the deed's covenants. T/F:Despite its covenants, a general warranty deed can not absolutely guarantee good title. It can not remedy actual flaws of title, unrecorded title claims, undisclosed encumbrances, or fraud, but compensation can be won for breach of covenant. - ✔ANS: true
Special warranty deed - ✔ANS: This deed contains only one covenant. In this covenant, the grantor guarantees the condition of title only for the time he actually owned the property. He claims no responsibility for title claims arising from past periods of ownership, or for encumbrances other than those he himself has incurred and specifically listed in the deed. Quitclaim deed - ✔ANS: makes no promises at all. The grantor simply relinquishes any claim to title which he may or may not have had. The quitclaim deed conveys whatever title the grantor possesses, whether it is a clear, unimpaired title, a defective title claim or no title interest at all. T/F: Quitclaim deeds are used frequently for removing clouds on title. A CLOUD ON TITLE is a lingering, often vague or uncertain claim or encumbrance that impairs an owner's title. - ✔ANS: true T/F:In Louisiana, the SALE WITHOUT WARRANTY is comparable to the Quitclaim Deed. - ✔ANS: true Bargain and sale deed - ✔ANS: guarantees more than the quitclaim, but not as much as a warranty deed. It conveys title without explicit guarantees, but does imply that title is good. There is an assurance that the grantor does in fact, possess the rights which he is conveying. Bargain and Sales Deed with Covenants - ✔ANS: is a special type of bargain and sale deed which includes a covenant assuring the grantee that the grantor has done nothing to encumber the property during the time he has owned it. This covenant, in effect, turns the deed into a special warranty deed. Specialty deeds -
Clauses in a deed - ✔ANS: 1. Vesting Clause:
- Granting Clause:
- Habendum Clause:
- Execution Clause:
- Acknowledgment: Vesting Clause - ✔ANS: Identifies the grantor and grantee, may include their addresses. granting clause - ✔ANS: Expresses the grantor's intention to convey, grant, give, sell or release his real property interest to the grantee, using specific WORDS OF CONVEYANCE. habedum clause - ✔ANS: Specifies the kind of estate being transferred, that is, fee simple, life, etc., and also lists any covenants, warrants, or promises. Habendum comes from the Latin, habendum et tenendum, meaning "to have and to hold". Deed restrictions and encumbrances are usually listed immediately following this clause. Execution Clause - ✔ANS: Includes the signature of the grantor, the date of signing, the signatures of witnesses, and a seal, if required. In transferring co-owned property, all co- owners must sign. In transferring dower or curtesy rights, the grantor's spouse must sign. acknowledgment - ✔ANS: Follows the signatures of grantor and witnesses. An acknowledgment is a formal declaration before an authorized person, usually a public notary, made by the person signing the deed, that he is the grantor and that he has signed the deed of his own free will. INVOLUNTARY TRANSFER -
✔ANS: Or involuntary alienation. Title to real property may be transferred involuntarily, or without the owner's consent. Most involuntary transfers of title are effected through the action of the law, through government bodies or the courts. The most common ways in which title to real property can be transferred against or without the property owner's consent are listed below. eminent domain - ✔ANS: The right to acquire private property, by government, for public use. Lands thus acquired must be used for specific public purposes and the owners affected must be justly compensated for their loss of title. condemnation - ✔ANS: The government's right of eminent domain is expressed through court action known as T/F: Eminent domain is the Right to take property; Condemnation is the Process by which government takes property. - ✔ANS: true Partition Sale - ✔ANS: Joint tenancy and tenancy in common can be dissolved by partition suit. Only one of the co-owners need initiate such a suit. The tenancy can be dissolved by partition sale whether all owners agree to it or not. The outcome of the suit is usually a court ordered sale of the property. The proceeds of the sale are divided proportionately among the co-tenants. Escheat - ✔ANS: When an owner dies without leaving a will and without heirs, his property title reverts to the state. Since property can not be allowed to remain ownerless, the state must assume ownership where there is not legal claim to title. HINT: (Every State Cheats) Judicial action -
Legatee - ✔ANS: is one who inherits property in a will. There are several types of wills Statutory will - ✔ANS: a formally prepared will, usually by an attorney, which is witnessed and signed. In Louisiana this is known as a notarial will. nuncupative will - ✔ANS: a will made orally by a testator who is near death. Only personal property may be transferred by this type of will. It must be witnessed, and the witness must commit the testator's words to writing. The testator must be legally competent for nuncupative and holographic wills to be binding. Mystic will - ✔ANS: must be in writing, signed by the testator, sealed, and notarized with three witnesses. Effective July 1, 1999, Louisiana recognizes only two forms of wills, holographic and notarial (same as statutory. Inestate - ✔ANS: When a person dies without leaving a valid will, he dies In this case, state law determines how his property will be divided. An administrator is named by the court to administer an intestate succession. Administrator - ✔ANS: In states recognizing community property as a form of husband and wife co-ownership, the entire estate is transferred to the surviving spouse. In most
other states, the deceased's estate is usually divided among the surviving spouse and children. Distribution of the estate is usually supervised by a court appointed T/F:* In Louisiana, we have what is called forced heirship. This refers to the law that parents, when making a will, must leave a certain portion of their estate to their children who are under the age of 24. This is called the forced portion. The amount of the estate that is forced depends upon the number of children. - ✔ANS: true T/F:If there are no children, there is no forced portion. If there is only one child, 1/4 of the estate is the forced portion. If there are two or more children, 1/2 of the estate is the forced portion. - ✔ANS: True T/F:There are twelve ways in which a child may be disinherited in Louisiana, including conviction of murder or attempted murder of one or both parents, marrying prior to the age of majority without parental consent, and not attempting to raise ransom money if a parent is kidnapped. - ✔ANS: true Naked owners - ✔ANS: The children are called naked owners Naked Owners - ✔ANS: This means that upon the death of a parent, the children are given abusus of the property, that is, the right to sell or mortgage the property and the right to the proceeds from the sale. Usufruct - ✔ANS: The surviving spouse is given the right of ____, the right of enjoying the use of the property and the income produced by the property. Disposable Portion - ✔ANS: the portion of the estate that is not forced is called the Donation Mortis Causa -
defects will be passed along to the next person who acquired the property unless the title is cleared. - ✔ANS: True T/F:A deed alone does not prove ownership and gives no indication of the soundness of the title conveyed. - ✔ANS: True Constructive notice - ✔ANS: All documents that create, transfer or encumber a property must be recorded in the public records, to protect the interest of the grantee and insure future marketability of title. Public recording involves the registration or enrollment of an instrument - deed, mortgage, etc. - with some local government official, usually the county clerk or county recorder. This is known as T/F:in order to establish that a document which is to be recorded has been willingly signed by its true executor, proof of validity is required. Four types of proof are commonly used - ✔ANS: true Types of constructive notice - ✔ANS: 1. Acknowledgment:
- Verification:.
- Affidavit:
- Affirmation: Acknowledgment - ✔ANS: A statement that the person executing a document has done so of his own free will, and that he is in fact the person whose signature appears on the document. Verification - ✔ANS: An oath confirming the truth of a document's contents
affidavit - ✔ANS: A written confirmation of the truth of a set of circumstances. Affirmation - ✔ANS: A declaration made by a person prohibited from giving an oath by his religious beliefs. Actual Notice - ✔ANS: Actual means first hand information regarding a property which is known by a single interested party, or which should be known by this party. EXAMPLE: Mr. Summers buys 560 acres of farmland from Mr. Ferguson. When Mr. Summers attempts to fence in a portion of the land, Mr. McGee, his neighbor to the north, accuses him of trespassing, a charge which is confirmed when a survey is made. The fault is Summers'. To protect his interest in this property, he would have used actual notice, by employing a professional surveyor to determine the actual dimensions of the land he purchased. T/F: A second meaning of actual notice involves the notice a person gives through his physical occupation of a property, or by his public announcement of his interest in a property. - ✔ANS: True Abstract of title - ✔ANS: This method is based on an attorney's examination of the history of the title. This history is contained in the Abstract of title - ✔ANS: which is a brief summary of all recorded instruments which have affected the title, including records of taxes, special assessments, judgments, mortgages and trust deeds abstract of title -
Mortgagee's or Lender's Policy - ✔ANS: protects the lender who takes the property as collateral for a loan. It protects only the amount owed on the loan, and the insured amount is reduced as the loan is paid off. Mortgagor's or Borrower's Policy - ✔ANS: is good for the full amount of coverage as stated on the policy and for as long as the owner or his heirs have an interest in the property Standard coverage policy - ✔ANS: normally insures the title as it is known from the public records, and against such hidden defects as forged documents, conveyances by incompetent grantors, incorrect marital statements, and improperly delivered deeds. Extended coverage - ✔ANS: includes the protections of a standard policy plus additional protections against defects such as rights of parties in possession, examination of a survey and certain unrecorded liens. T/F: Title insurance protects only against the past, not the future. Title policies are taken out with a one time, lump sum payment, and are not transferable. - ✔ANS: True Subrogation - ✔ANS: The right of the title company to any remedy or damages available to the insured, when the title company has made a payment to settle a claim covered by a policy. Enroachments - ✔ANS: unauthorized intrusion of a building or other improvement onto the land of another person. The owner of the land that is being encroached upon has the right to force the owner of the encroachment to remove it. Failure to do so may injure his title. A survey identifies an Technical problems -
✔ANS: unrecorded easements and information based on incorrect and inaccurate surveys. Hidden defects in public records - ✔ANS: such as any omission or error in public records, such as misfiling, etc. Uncanceled mortgage and prior judgement - ✔ANS: are other defects which can present problems in a title. 1.One way is by paying unpaid taxes. 2.Another way is by filing a Suit to Quiet Title. 3.A third method is use of the Quitclaim Deed, whereby a third party releases any claim to the title. - ✔ANS: WAYS OF CLEARING TITLE DEFECTS A title defect, or cloud on a title may be removed in several ways. State laws - ✔ANS: When a person dies without a will, what determines how his property will be divided? curtsey - ✔ANS: The husband's interest in his wife's estate is called: Alluvion - ✔ANS: Deposits of soil that occur from the natural processes of nature and result in the increase in the size of a property are called: Special Warranty Deed - ✔ANS: A Bargain and Sale Deed with Covenant is equivalent to: Signature of the grantee - ✔ANS: To be valid, a deed must have all the following EXCEPT Legatee - ✔ANS: person who inherits property in a will is known as a:
✔ANS: The process of state, local, or federal government in taking private property for public use is legatee - ✔ANS: A person who inherits property in a will is known as a: general warranty deed - ✔ANS: Which of the following types of deeds is the best one for the grantee? lis pendens - ✔ANS: A term which means pending litigation is: subrogation - ✔ANS: The right of a title company to any remedy or damages available to theinsured, when the title company has made a payment to settle a claim covered by the policy is known as:
