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List and briefly explain the two types of title transfer.
Voluntary alienation – an unforced transfer of title by sale or gift from the owner to another party. Involuntary alienation – a transfer of title to real property without the owner's consent.
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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.
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List the eight requirements of a deed's validity.
- Delivered and accepted
- Competent grantor and legitimate grantee
- Be in writing
- Contain legal description
- Contain granting clause
- Include consideration
- Signed by grantor
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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.
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Name and briefly explain five of the nine types of special-purpose deeds. (Additional answers can be found on Page #12)
- Personal representative's deed -- 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
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List the five exemptions from transfer tax.
- 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
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Name and briefly explain the two legal principles that affect transferring property by will.
- Law of Situs – real property is distributed according to the laws of the state in which the property is located.
- Law of Domicile – personal property is distributed according to the laws of the state in which the deceased held legal residence, regardless where the property is located.
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Describe the four types of will.
- Witnessed—written, two witnesses
- Holographic-handwritten or typed, signed by testator
- Approved-on a pre-printed form approved by the state
- Nuncupative-written by a witness from testator's oral statement; generally not valid for real estate transfer
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What happens to Joe's real estate in your state if Joe dies leaving
a) a wife, children, and a will;
b) a wife and children, but no will;
c) no legal heirs, and no will?
- a) after all claims have been satisfied (including those of legal life estates), the estate goes to the heirs according to the will.
- b) after all claims have been satisfied (including life estates), the estate goes to the heirs according to the state's laws of descent and distribution.
- c) after all claims have been satisfied (here, there can be no life estate), the estate goes to the state by escheat.
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Name the forms of involuntary alienation of title. 8
- Laws of descent,
- abandonment,
- foreclosure,
- eminent domain,
- escheat,
- adverse possession,
- estoppel,
- dedication.
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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.
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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.
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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.
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Deeds of conveyance are instruments of
voluntary conveyance by grantor to grantee
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Delivery and acceptance; in Torrens, title transfers upon _____
Registration
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Deed clauses and covenants
premises clause:
Granting clause
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Deed clauses and covenants
habendum clause:
Type of estate
-
Deed clauses and covenants
reddendum clause:
Restrions
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Deed clauses and covenants;
tenendum clause:
Other property included
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Statutory deeds
bargain and sale:
"I own but won't defend"
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Statutory deeds
general warranty:
"I own and will defend"
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Statutory deeds
special warranty:
"I own and warrant myself only"
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Statutory deeds
quitclaim:
"I may or may not own, and won't defend"
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Type of deeds used for different purposes, to convey certain interests, or by certain parties
Special purpose deeds
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Transfer tax
state tax on conveyances based on price
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last will and testament:
voluntary transfer to heirs after death
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Maker of will
Divisor or testator
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Types of will 4
witnessed; holographic; approved; nuncupative
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Probate
if testate, estate passes to ____
if intestate, to________
if intestate with no heirs,______
- Heirs
- successors by descent;
- estate escheats to state or county
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The only clause that is actually required in a deed
Granting clause
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Distinguishing characteristic of special warranty deed
It makes warranties only for the time the property was owned by the grantor
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Title can be voluntarily transferred by 3
Grant, deed, will
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Property transferred by a will is called
Devise
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Document that shows legal alienation of a property
Deed
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Define a deed.
A deed is a legal written instrument by which an owner as Grantor conveys to a Grantee an ownership interest in real property.
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Name the seven essential elements to a deed.
- Written,
- parties,
- consideration,
- words of conveyance,
- legal description,
- signature of grantor,
- delivery and acceptance
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What is created by a discrepancy in the grantor's name on the deed?
Cloud on Title
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What type of clause is "to have and to hold forever"?
Habendum clause
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What legal description is required on deeds in Indiana, and where is the best place to find it?
Indiana requires a full legal description that is the exact one used in previous deeds and can be found in the deed where the grantor obtained title to the property.
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What is a deed exception?
It is a right that the grantor does not have and is not able to convey
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Once restrictions are in place on a property, how does this impact future owners?
Once restrictions are in place, they run with the land and are limitations on the rights of all future owners.
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Name the three types or categories of deeds and briefly explain each one.
General warranty deed offers the maximum number of warranties and covenants.
Special warranty deed offers a limited number of warranties and covenants.
Quitclaim deed offers no warranties or covenants.
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Name and briefly explain the five covenants of a general warranty deed.
Covenant of Seisin relates to the past and guarantees the grantor owns the property and has a right to convey it.
Covenant against Encumbrances relates to the past and guarantees there are no monetary claims against the property.
Covenant of Further Assurance relates to the future and forces the grantor to correct the deed if necessary.
Covenant of Quiet Enjoyment relates to the future and protects the grantee against any title dispute arising between the grantor and any former claimants to the title.
Covenant of Warranty Forever relates to the future and guarantees grantee will have title and possession of the property free of claims from third parties.
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Explain a bargain and sale deed.
The grantor warrants only that he/she has personally done nothing to harm the title. This deed is a special warranty deed.
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What is the purpose of an acknowledgment?
To prevent forged or fraudulent documents from taking effect.
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A ____ is a legal written instrument by which an owner as Grantor conveys to a Grantee an ownership interest in real property.
Deed
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Elements of a Deed 12
- Written Instrument – must be written to valid.
- Date – not required but will prevent future controversy concerning the deed's delivery
- Named parties (Grantor and Grantee) – grantor name must be exactly as on title grantor received; discrepancy creates a Cloud on Title
- Consideration (or a recital thereof) – must have tangible consideration for deed to be valid
- Words of Conveyance – statement of intent to transfer interest in property; Habendum clause indicates type of deed being conveyed
- Legal Description – must be full legal description exactly as on previous deeds
- Exceptions and Restrictions – exception is a right grantor does not have and cannot convey; restriction is right-to-limitation
- Warranties and Covenants – see next page
- Signature of the Grantor – deed must be signed by grantor to be valid
- Delivery and Acceptance – depends on intent of grantor to pass title to grantee
- Acknowledgment – designed to prevent forged or fraudulent documents
- Recording – protects innocent purchaser who might otherwise act in ignorance of an unrecorded deed; presumes all persons have knowledge of contents of recorded deed
-
Constructive notice –
information an individual is legally responsible for
-
Actual notice –
express or direct knowledge
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"No one has a better claim than I, the Grantor, and therefore, I grant you the following covenants or promises..."
This kind of deed is the greatest protection for the buyer.
General Warranty Deed
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General Warranty Deed contains each 5
- Covenant of Seisin - Grantor says that he/she is the owner and has the right to convey title.
- Covenant Against Encumbrances - Grantor promises that the property is free of liens or encumbrances other than those stated in the deed.
- Covenant of Further Assurance - Grantor promises if there are defects, he/she will take care of any problems.
- Covenant of Quiet Enjoyment – protects against title dispute between grantor and any former claimants to the title.
- Covenant of Warranty Forever - Grantor promises the grantee will have title and possession of the property free from claims of third parties.
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Special Warranty Deed
Contains only one covenant, the Covenant against encumbrances - he/she will defend and correct any flaws in the title that occurred during the time that he/she owned it, but not before.
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Bargain & Sale Deed
Makes no promises against encumbrances, yet it warrants grantor has personally done nothing to harm the title.
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Quit Claim Deed
Provides the purchaser with no warranties or covenants. Grantor simply releases or quit claims his/her interest in the property to the grantee.
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Covenant that guarantees grantor has right to convey deed
Covenant of seisin
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In an unbroken chain of general warranty deeds, who may be held responsible for all warranties of all previous owners
Each grantor in the unbroken chain
-
Relates to the past and guarantees grantor ownership
Covenant of seisen
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Which type of covenant forces a correction deed from the grantor if necessary
Covenant of further assurance
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Which type of deed is used to clear up a cloud in the chain of title
Quitclaim
-
Used to release lien claim on property
Quitclaim deed
-
The 2 covenants that relate to the past
Seisin and against encumbrances
-
Covenant of seisin guarantees
The grantor owns the property and has a right to convey it
-
The covenant that is often considered part of the covenant of quiet enjoyment
Covenant of warranty forever
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A bargain a sale deed is a ____ warranty deed
Special
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The words on a deed “for love and affection” are
The recital consideration
-
Type of deed used by grantors who cannot or do not want to make any warranties other than for the time they held title to property
Special warranty deed
-
Type of deed that warrants the title against any defects arising during and before the grantors ownership of the property
General warranty deed
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The title to real estate passes when a valid deed is
Delivered and accepted
-
For a deed to be recorded, Indiana requires the signature to be
Notarized
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What happens when a title is conveyed by a type of deed different than the type used when it was previously conveyed
Future liability on goes back to the start of the next succession of warranty deeds
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In addition to avoiding ownership disputes, what are the purposes of title records? 3
Public notice
Buyer protection
Lienholder protection
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Briefly explain the Torrens System.
It is a deed registration system whereby the title passes only when the conveyance has been duly registered on the title certificate itself; the title record is the title itself.
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Name and explain Indiana requirements for recorded deeds. 9
- Acknowledgement: To entitle any conveyance, mortgage, or instrument of writing to be recorded.
- Legibility of Names: Typed or printed under each signature exactly as signed.
- Name of Person Preparing Instrument: Each document affecting real estate.
- Notarized Documents: Requires county residence of notary and commission expiration & seal.
- Sales Disclosure Forms: Endorsement by County Assessor prior to recording any conveyance document.
- Transfer of Deeds of Taxation: Endorsement by County Auditor prior to recording any conveyance document.
- Release of Satisfaction of Liens: May be executed by President, Vice-President, Cashier, Secretary, Treasurer, General Manager, or Attorney-in-Fact only.
- Affirmation statement: Required on all documents executed or acknowledged in the State of Indiana at the conclusion of the document with the prepared by statement.
"I affirm, under the penalties for perjury, that I have taken reasonable care to redact each Social Security number in this document, unless required by law." "printed name"
- Grantee address required: Complete street or rural route address of the grantee after the mailing address (when applicable) on all conveyances of real property.
- Additionally, all names included in the deed must appear the same throughout the document, the legal description must be included along with a tax mailing address.
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Describe the four principal forms of title evidence.
a Torrens certificate
a title insurance policy
an attorney's opinion of the title abstract
a title certificate
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In the absence of a Torrens registration, what is commonly accepted as the best evidence of a marketable title?
Title insurance
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What is the difference between a title search and title insurance?
A title search is a detailed examination of public records concerning a specific piece of property within a specific time frame, while title insurance covers losses that a title search would not. Title insurance provides protection against loss if there are defects or claims against the title.
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Name three losses an Owner's Title Policy covers and three defects it does NOT cover.
Covered – forged documents, misfiled documents, undisclosed heirs
Not covered – taxes and assessments not yet due, anything that a survey would have revealed, mineral and water rights
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Name three conditions of a Lender's Policy.
Coverage is equal to amount of loan
Normally paid by buyer
Stays in effect as long as the loan remains on the property
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What date should be used on the title insurance policy?
The same date as the actual closing date of the escrow
-
In title records; Public notice – protect public by
giving constructive notice of title
-
In title records; Buyer protection – protect buyer by
revealing if a property has marketable title
-
In title records; Lienholder protection – protect lienholder by
putting public on notice that the lien exists and that it may be basis for foreclosure action
-
Recording system has no _____ standards
Federal
-
registration system wherein title passes only when the conveyance has been duly registered on the title certificate; title record is title itself
Torrens system –
-
___ ___must clear title before registration into Torrens
Court action
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Title evidence; Seller must show title is free of doubts about _____ of current owner, defects, claims that could affect value, undisclosed or unacceptable encumbrances.
Identity
-
title evidence; Four principal forms of evidence –
- Torrens certificate,
- title insurance,
- attorney's opinion of abstract,
- title certificate
-
Best evidence of marketable title when no Torrens certificate
Title insurance
-
Covers losses title search would not; provides protection against loss if there are defects or claims against title
Title insurance
-
___ ___company investigates title and, if satisfied that title is clear, issues a commitment to insure in the buyer's name
Title insurance
-
Type of policy;
Standard or extended coverage
Protects against losses from such title defects as forged documents, undisclosed heirs, incorrectly given marital status, etc.
Does not protect against such defects as rights of parties in possession, anything not recorded, etc.
Will clear up title problems or pay insured's losses
Remains in effect as long as insured or insured's heirs retain interest in property
Owners policy
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Type of policy;
Borrower must obtain insurance protecting lender as condition of first mortgage loan
Coverage is equal to amount of loan; reduces as loan does
Normally paid by buyer
Stays in effect as long as loan remains on property
Lenders policy
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A torrens certificate is not merely a record but
The title
-
Before issuing a title insurance policy, a title company does what
Performs a title search
-
A court action to clear title by giving notice to all potential interest holders that they must express their claims is necessary for what
To enter property in torrens system
-
A binder is the same as
A commitment to insure
-
Recording the deed to a property protects the owner from
Other unrecorded titles
-
A lenders title insurance policy generally protects
The lender against the possibility that the lenders lien cant be enforced
-
Indiana state laws require their recording of all documents that
Affect the rights and interest of real estate
-
It’s no long necessary to search public records to ascertain the status of title when what has occurred
Torrens certificate has been issued
-
In the torrens system of recording, title passes when the conveyance is
Registered on the title certificate
-
How many types of insurance policies
-
Title insurance is issued to protect either the buyer or lender for time ___ the closing date
Previous to
-
List 5 goals of land use control.
- preservation of property values
- promotion of the highest and best use of property
- balance between individual property rights and the public good, i.e., its health, safety and welfare
- control of growth to remain within infrastructure capabilities
- incorporation of community consensus into regulatory and planning activities
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What are the three phases of land use planning?
Master planning
Plan administration
Plan implementation—zoning, codes, permits.
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