Real Estate Chapter 10

  1. Title
    Evidence of ownership of land passed by a deed or court order.
  2. Deeds
    Written instruments used to convey (transfer) real property.

    Requirements for a Deed

    • The deed must be in writing and signed by the grantor.
    • The grantor and grantee must be clearly identified.
    • The grantor must have legal capacity.
    • The property must be adequately described.
    • The deed must express the intent to immediately convey a property interest to the grantee.
    • The deed must specify the type of interest and rights given to the grantee.
    • The deed must be acknowledged.
    • The deed must be delivered by the grantor and accepted by the grantee.
  3. grantor
    The seller or donor.
  4. Grantee
    The buyer or recipient.
  5. Dower and Curtesy rights
    The right of a surviving spouse to receive a portion of the deceased spouse’s estate. Dower provides a right to a surviving wife, and curtesy provides a right to a surviving husband.
  6. Habendum
    • Clause in a deed which sets forth the extent of ownership and any exceptions or reservations to ownership.
    • The Deed Must Specify the Type of Interest and Rights Given to the Grantee
  7. Acknowledgment
    A declaration made before a notary public.

    The Deed Must Be Acknowledged
  8. Constructive delivery
    The Deed Must Be Delivered by the Grantor and Accepted by the Grantee

    A type of delivery that is inferred from the conduct of the parties, even if the physical delivery did not take place.
  9. Title assurance
    A third party’s promise to an owner that the owner holds legal title to the property. Most commonly, a title insurance company makes this promise to a purchaser or lender.
  10. General warranty deed
    A deed containing a full warranty and set of promises by the grantor to the grantee.
  11. Special warranty deed
    contains the same warranties as a general warranty deed, with one major difference regarding the covenant period. In a special warranty deed, the grantor warrants that he has not caused any defects in the title during his period of owning the property. In a general warranty deed, the grantor warrants that no one has ever caused any defects in the title.

    Example: If there were preexisting easements, liens, and mortgages on the property when the seller received title, the seller would not be liable to the buyer for them under a special warranty deed. However, the seller would be liable under a general warranty deed.
  12. Grant deed
    • implies two covenants
    • :The grantor has not previously conveyed the same estate to anyone other than the grantee
    • .The property is free of encumbrances placed on it or permitted by the grantor. A conveyance passes all easements related to it, even if they are not expressly included in the grant.
  13. Deed of bargain and sale
    used to convey real property implies that the grantor has a claim of ownership in the property, but the grantor makes no other covenants to the grantee. Sometimes a deed of bargain and sale is referred to as an “as is” deed. States may allow a grantor to provide for warranties in the deed.
  14. Quitclaim deed
    Uponceptance of a quitclaim deed, the grantee holds whatever interest the grantor had in the real property. If the grantor holds no interest at all, no interest p. 269passes. This is the weakest form of deed and is used as a means of removing any ambiguities in the record of title.
  15. Judicial deed
    sometimes called a sheriff’s deed, is a deed issued as a result of a judicial foreclosure proceedings. Judicial deeds are quitclaim deeds and do not provide any warranty of title to the grantees.
  16. Trustee deed,
    are quitclaim deeds that do not usually provide any warranty of title to the grantees.
  17. Recording statute
    A state statute providing constructive notice is deemed to have been given to third parties by virtue of filing a document in the public domain.
  18. Grantor-grantee index system
    records are indexed and maintained alphabetically by the grantor’s or the grantee’s respective names. Along with the grantor’s or the grantee’s information, the index will contain a date and time, the type of document indexed (such as deed, mortgage, or easement), a short legal description, and a reference to the page and book in the public records where a copy is filed, along with the grantee’s or the grantor’s name.
  19. Tract index system
    instead of tracing title back through each successive conveyance from grantor to grantee, the county, parish, or township is divided into parcels of land. All documents affecting title to the parcel of land are indexed and summarized on a page for that parcel.
  20. Race statute
    A recording statute that provides title to the first party to record, even if the first to record obtained his or her interest later in time.

    A recording statute that provides title to the first party to record, even if the first to record obtained his or her interest later in time.
  21. Notice statute
    A recording statute that provides title to the last bona fide purchaser.

    A good faith purchaser who purchases real property without notice of any prior sale by the grantor.
  22. Bona fide purchaser
    A good faith purchaser who purchases real property without notice of any prior sale by the grantor.
  23. Actual notice
    occurs when the prospective purchaser has actual knowledge of a title defect (for example, that the property has already been sold to another).
  24. Constructive notice
    arises when a search of the title records would have revealed a defect in title (such as, another owner has recorded a deed to that property). All persons are deemed to have notice of what has been made part of the public records, even if they did not search for that information.
  25. Inquiry notice
    arises when a party becomes aware, or should have become aware, of certain facts that, if investigated, would reveal the claim of another.
  26. Race-notice statute
    A recording statute that states that the first bona fide purchaser to record keeps title to the property.

    A recording statute that states that the first bona fide purchaser to record keeps title to the property.
  27. Marketable title
    A title that is free from any unknown encumbrances or liens. Only agreed-upon encumbrances (such as real property taxes) may exist when title is conveyed, subject to certain exceptions.
  28. Chain of title
    A recorded instrument found through generally accepted title searching methods. To establish constructive notice, an instrument may be required in the chain.
  29. Marketable record title acts
    State laws that limit the look-back period for examination of the public records. These acts clear the title of old defects and reduce the number of required title searches.
  30. Title abstract
    A condensed chronological summary of the title’s history that follows a chain of title search.
  31. Title opinion
    A written certificate of title opinion as to who owns the real estate, the quality of title, and exceptions, if any, to clear title for the transaction.
  32. Title insurance
    A policy insuring against loss incurred as the result of defective title.
  33. Cloud on title
    A defect or potential defect in the owner’s title arising from a lien, easement, or court order.
  34. Endorsement,
    A written amendment to a title insurance policy modifying the policy. It may alter, enlarge, or reduce coverage.
  35. Closing
    The completion of all conditions in a real estate transaction necessary to convey title between the parties.
  36. Closing statement
    is prepared in advance of the closing, stating the distribution of monies that will occur at the time of closing.
  37. Settlement process
    A method of closing in which both the buyer and the seller exchange documents in person.
  38. Settlement agent
    A person who supervises the exchange of documents, mortgages, notes, and monies between the buyer and the seller.
  39. Escrow
    A method of closing in which both the buyer and the seller deliver documents to an escrow agent, who holds the documents in trust for the parties until all conditions for closing are met.
  40. Escrow agent
    A person who facilitates the closing of a transaction and holds a deed in escrow until all the terms and conditions between the buyer and seller are met.
  41. Slander of title
    occurs when one falsely claims an interest in the ownership of another’s property. That is, the party who recorded a document on the title to the property did not have a privilege to do so.
  42. RESPA
    Federal law administered by the Consumer Financial Protection Bureau aimed at ensuring that consumers receive information about the cost of their mortgages and closings.
  43. TILA-RESPA Integrated Disclosure (TRID) rule
    CFPB rule requiring specific loan disclosures to consumer borrowers.
  44. Closing disclosures
    Lender’s disclosure to consumer of anticipated costs and disbursements at closing.
  45. Consummation
    The date on which the consumer becomes legally obligated on the loan documents.
  46. Kickback
    as anything of value (such as payments, commissions, fees, gifts, and special privileges) received for referrals of settlement-service business.
  47. The Deed Must Be in Writing and Signed by the Grantor
    o transfer an interest in land, the Statute of Frauds requires an evidence of a writing. The writing is usually in the form of a deed and must have the grantor’s signature. It is not necessary for the grantee to execute the deed.
  48. The Grantor and Grantee Must Be Clearly Identified
    Both the grantor and the grantee must be clearly identified in the deed. They are identified in the preamble section of the deed, discussed below. A misspelled name or missing middle names or initials may still suffice if the name can be easily identified.
  49. The Grantor Must Have Legal Capacity
    The grantor should have legal capacity to execute the deed. Recall from chapter 8 that capacity is a necessary element to form a valid agreement. Minors, persons under a conservatorship or guardianship, persons declared to be legally incompetent, and intoxicated persons lack capacity
  50. The Property Must Be Adequately Described
    The property must be described clearly so that it can be identified. If the property intended to be conveyed cannot be ascertained, the deed can be voided. Usually, errors in the description and other errors in the conveyance are interpreted in favor of the grantee.
  51. The Deed Must Express the Intent to Immediately Convey a Property Interest to the Grantee
    The deed must express the present intention to convey a property interest to the grantee. This clause is known as a granting clause. While no specific words are required, suitable words of conveyance include I give, grant, bargain and sell, convey, quitclaim, or assign. The type of words used to convey property can provide or limit warranties to title.
  52. Present Covenants in General Warranty Deed
    Seisin. At the time the deed is delivered to the grantee, the grantor covenants that he or she owns the interest conveyed to the grantee. This covenant is breached if the grantor does not own the interest conveyed.

    The right to convey. The grantor warrants that she or he has the legal right and the power to convey title. With this covenant, a grantor would warrant that she or he is an authorized corporate officer, the trustee of a trust, and so on, with the power to convey the property.

    Covenant against encumbrances. The grantor promises that the property has no undisclosed encumbrances (easements, mortgages, liens, unpaid taxes, etc.). This covenant relates to private encumbrances on title such as those mentioned. It is not breached by the presence of public land-use ordinances and building codes or by an encumbrance on the property to which the grantor accepts title.
  53. Future Covenants  for General Warranty Deed
    Covenant of warranty. With this covenant, the grantor promises to defend and compensate the grantee for any losses suffered from all claims that might arise from a defect in the grantor’s purported title (undisclosed easements, undisclosed leases, etc.).

    Covenant of quiet enjoyment. The covenant of quiet enjoyment is similar to the covenant of warranty. The grantor promises that the grantee will not be disturbed in possession or enjoyment by a third party asserting a claim of superior title.

    Covenant of further assurances. The grantor promises to perform whatever acts are reasonably necessary to cure a defect in (perfect) the grantee’s title. This covenant is often utilized to require the execution of corrective conveyancing documents without having to compensate the grantor.
  54. Torrens System
    System in which a certificate and deed identify who owns the title.
Author
tmredstone
ID
346127
Card Set
Real Estate Chapter 10
Description
midterm 2
Updated