Chapter 1 Flashcards
Abstract of Title
A historical summary of the publicly recorded documents that affect a title.
Bargain and Sale Deed
Conveys property without seller warranties. This is sometimes referred to as an “as is” deed.
Deed
The written instrument used when title is conveyed from one person (the grantor) to another (the grantee)
Deed Restrictions
Used to limit the use of property by all subsequent owners of that property. May be used to achieve personal or business objectives. ex. Prohibiting the sale or consumption of alcoholic beverages on the property forever.
Easement (Nonpossssory Interest)
It is the right to use land that is owned or leased by someone else for some special purpose (ex. as a right of way to and from one’s property). An easement entails only a limited user privilege and not privileges associated with ownership.
Estate
All that a person owns.
Estate for Years
A type of leasehold estate investors and lenders are most likely to encounter. It is created by a lease that specifies an exact duration for the tenancy.
Estate from Year to Year
Continues for successive periods until either party gives proper notice of its intent to terminate at the end of one or more subsequent periods. (Ex. Month to month)
Fee Simple Estate
A freehold estate that represents the most complete form of ownership of real estate. A holder of a fee simple estate is free to divide up the fee into lesser estates and sell, lease, or borrow against them as he or she wishes, subject to the laws of the state in which the property is located.
Freehold Estate
Lasts for an indefinite period of time; that is, there is no definitely ascertainable date on which the estate ends. A freehold estate connotes ownership of the property by the estate holder.
Future Estates
An estate not in possession which do not convey the right to enjoy the property until some time in the future. Two most important types are Reversion and Remainder.
General Warranty Deed
This is the most commonly used deed in real estate transactions and the most desirable type of deed from the buyer’s perspective. It offers the most comprehensive warranties about the qualify of the title.
Leasehold Estate
Expires on a definite date. A freehold estate connotes ownership of the property by the estate holder, whereas a leasehold estate implies only the right to posses and use the property owned by another for a period of time.
Lender’s (or mortgagee) Policy
Insures the interests of the mortgagee.
Lessee
A person who leases land and may have the right to possession and exclusive use of a property for a period of time.
Lessor
The person who holds title and creates a contract with a lessee
Life Estate
A freehold estate that lasts only as long as the life of the owner of the estate or the life of some other person. Upon the death of that person, the property reverts back to the original grantor, his or her heirs, or any other designated person.
Mechanics’ Liens
Gives unpaid contractors, workers, and material suppliers the right to attach a lien on the real estate to which they added their labor or materials.
Owner’s Policy
Insures the interests of a new property owner. Is payable to the owner (or to the heirs of the owner).
Property Rights
The right of a person to the possession, use, enjoyment, and disposal f his or her property.
Quitclaim Deed
Offers the grantee the least protection. Such a deed simply conveys to the grantee whatever rights, interests, and title that the grantor may have in the property. No warranties are made about the nature of these rights and interests or of the quality of the grantor’s title to the property. The quitclaim deed simply says hat the grantor “quits” whatever “claim” he or she has in the property (which may well be none) in favor of the grantee.
Real Estate
Used to refer to things that are not movable such as land and improvements permanently attached to the land and ownership rights associated with the real estate.
Recording Acts
They are not uniform among the states, but they act in general to provide a publicly accessible system for assessing and establishing claims or interests in real estate as against all other parties.
Remainder
Exists when the grantor of a present estate with fewer ownership rights than the grantor’s own estate converts to a third person the reversion are interest the grantor or the grantor’s heirs would otherwise have in the property upon termination of the grantee‘ said estate. A remainder is the future estate for the third person.
Reversion
Exists when the holder of an estate in land (the grantor) converts to another person (a grantee) a present estate in the property that has fewer ownership rights than the grantor’s own estate and retains for the grantor or the grantors heirs the right to take back, at some time in the future, the full estate that the grantor enjoyed before the conveyance. A reversionary interest can be sold or mortgaged because it is an actual interest in the property.
Secured Interest
Collateral. A lender may not possess or use the real estate but the mortgage document provides the lender with evidence of a secured interest.
Sheriff’s Deed-Trustee’s Deed
A type of bargain and sale deed received by a buyer from a foreclosure or other forced sale because the sheriff or trustee is acting in the representative capacity. No warranties are added.
Special Warranty Deed
Make the same warranties as a general warranty deed except that it limits their application to defects and encumbrances that occurred only while the grantor held title to the property.
Title
An abstract term frequently used to link an individual or entity who owns the property to the property itself. Proves ownership.
Title Assurance
Refers to the means by which buyers of real estate:
1) Learn in advance whether their sellers have and can convey the quality of title they claim to possess
2) Receive compensation if the title, after transfer, turns out not to be as represented.
