Chapter 2: Forms of Ownership, Transfer, and Recording of Title

Question 1

Quitclaim Deed

Answer 1

• gives NO warranties or guarantees
• offers the least protection
• Used to clear a cloud on the title or to cure a defect in title

Question 2

Bargain and Sale Deed

Answer 2

• no warranties about the condition of the title

- only promises the grantor has the right to convey the title

Question 3

Special Warranty Deed

Answer 3

Guarantees title only against defects arising under the grantor’s period of ownership. Defects existing before that time are not covered.

Question 4

General Warranty Deed

Answer 4

Guarantees and protects against defects. It offers the buyer the best
protection, warrants title to the sovereignty of the soil, and is the most common deed.

A buyer who wishes to ensure that the seller is conveying good title should request a General Warranty Deed.

Question 5

Alienation

Answer 5

A change of ownership of real property

Question 6

Littoral Rights

Answer 6

The right to use water from a lake or ocean

Question 7

Riparian Rights

Answer 7

The right to use water from a river or stream that borders your property

Question 8

Mineral Rights

Answer 8

Rights to subsurface land and profits

Question 9

Voluntary Lien vs Involuntary Lien

Answer 9

Voluntary lien is created by the borrower’s actions, like taking out a mortgage or home improvement loan. Involuntary lien is created by law

Question 10

Specific Lien vs General Lien

Answer 10

Specific lien attaches to one or more specific properties. General lien attaches to all the property of the debtor

Question 11

Lien

Answer 11

A charge against property as security for a debt

Question 12

Holdover Tenancy

Answer 12

Holdover tenant pays rent and landlord accepts it

Question 13

Tenancy at Sufferance

Answer 13

Lease expires and tenant refuses to move out. Landlord is not receiving rent and holdover tenant has no right to be there

Question 14

Estate/Tenancy at Will

Answer 14

A lease that can be terminated by either party without notice

Question 15

Periodic Tenancy

Answer 15

Lease with a fixed period that automatically renews. Notice to terminate is usually required. (mtm lease)

Question 16

Estate for Years

Answer 16

Lease with a specific starting and ending date. No notice is required to terminate. Survives death and sale of the property

Question 17

What happens when a life tenant leases the property and then dies?

Answer 17

The lease expires and property goes to the remainderman

Question 18

Life Estate with Reversion

Answer 18

Property goes back to the original owner at the end of the life estate

Question 19

Life Estate

Answer 19

Ownership for the duration of someone’s life. Owner is called the life tenant.

Question 20

Fee Simple Defeasible

Answer 20

Ownership with conditions or terms, which, if violated, could cause the ownership interest to be defeated or terminated.

When the ownership is defeated, it reverts or goes back to the original grantor or the grantor’s heirs.

EXAMPLE: a property is donated to a church with the condition that the church must use it for education. If the church decided to place a parking lot in the space rather than a school, it could lose the property altogether. Ownership would revert to the former owner or his or her heirs. Fee simple defeasible can be determinable or condition subsequent

Question 21

Fee Simple/ Fee Simple Absolute

Answer 21

• considered the best type of ownership
• places the least number of limitations on the owner.
• said to be indefeasible, meaning it cannot be defeated unless someone has a more significant legal claim.
• Fee Simple ownership is always an estate of inheritance*

Question 22

What legal rights make up the Bundle of Rights

Answer 22

1. Disposition: the right to sell, will to heirs or lease
2. Exclusion: the right to exclude others
3. Possession: the right to use, enjoy, occupy
4. Quiet Enjoyment: the right to use uninterrupted by former owners

Question 23

Syndicate

Answer 23

2 or more parties join together to create and operate a real estate investment

Question 24

A property held in trust

Answer 24

A property held by one party for the benefit of another

Question 25

Tenancy by the Entirety

Answer 25

type of joint tenancy where the co-owners are married to one another

Question 26

Joint Tenancy

Answer 26

Ownership by 2 or more with rights of survivorship. Share goes to surviving co-owners immediately upon your death.

Question 27

Tenancy in Common

Answer 27

Ownership of land or property by 2 or more in which they control their portion. Is an estate of inheritance.

Example: Condo at Fiesta Harbor. Everyone owns part.

Question 28

Estate in Severalty

Answer 28

Ownership by one individual or one business entity such as a corporation or partnership

Question 29

Holdover Tenancy

Answer 29

Holdover tenant pays rent and landlord accepts it

Question 30

Probate

Answer 30

The judicial process to prove or confirm a will or to settle the estate of a party who dies intestate. Title is then transferred in 30 days

Question 31

Intestate

Answer 31

Someone without a will

Question 32

Patent

Answer 32

When the government transfers title to an individual

Question 33

Covenant of Seizin

Answer 33

Grantor promises to own and have the right to sell the property.

Question 34

Community Property

Answer 34

All property acquired after marriage is jointly owned by the husband and wife

Question 35

Dower Rights

Answer 35

The rights a wife has in the property her husband acquires during marriage

Question 36

Curtesy Rights

Answer 36

The rights a husband has in property his wife acquires during marriage

Question 37

Subrogation Clause

Answer 37

allows the title company to assume
the rights of a buyer with respect to any claim against a seller if the title company has made payments to that buyer to satisfy that claim.

The property owner cannot collect from both the title company and the seller for one problem.

Question 38

Abstract of Title

Answer 38

A complete history of title

Question 39

Chain of Title

Answer 39

Included in the abstract and lists all owners from the first until today

Question 40

When an individual owns real property, he is said to have a what in that property.

Answer 40

freehold estate

Question 41

covenant against encumbrances

Answer 41

the only limitations to title are those listed in the deed and there are no unpaid claims against the property

Question 42

covenant of further assurance

Answer 42

the grantor is responsible for any documentation needed to ensure that title is transferred to the grantee

Question 43

joint tenancy

Answer 43

• The unique aspect of joint tenancy is the right of survivorship of the tenants.
• When a joint tenant dies, his or her share is equally divided among the surviving joint tenants immediately
• will NOT required

Question 44

In order to create a joint tenancy, what four unities are required?

Answer 44

1. Time – Owners must acquire their interests at the same time.
2. Title – They must acquire their interest from the same source (will, contract, deed, etc.)
3. Interest – They must hold equal shares.
4. Possession – Possession of the property must be shared equally

Question 45

tenancy by the entirety

Answer 45

• NOT RECOGNIZED IN TEXAS
• ownership by a husband and wife
• basically joint tenancy created between two married individuals.
• When one dies, the other immediately becomes an owner in severalty.
• the signature of both parties is required