Chapter 3 (A-3) Transfer of Title & Title Insurance

Question 1

Four ways title can be transferred?

Answer 1

1. Voluntary alienation - sell of own free will.
2. Involuntary alienation - loose title w/o consent. Foreclosure, imminent domain.
3. Descent (INTESTATE) - die w/o a will but have heirs.
4. Will - (TESTATE - time to do the will) still goes thru probate

Question 2

Who are the parties in a deed or title transfer?

Answer 2

Grantor - seller or representative of seller.

Grantee - buyer

Question 3

Basic requirements for deed transfer

Answer 3

1. Grantor must be competent - 18, sane, sober, have civil rights.
2. Identifiable grantee (doesn’t require competency).
3. Granting Clause - coveying clause that conveys ownership from seller to buyer.
4. Legal description of property.
5. Legal consideration - valuable or good (love & affection)
6. Grantor signature (shows intent).
7. Acknowledgment (notorized) - shows signed of freewill, identify proof
8. Delivered to Grantee

Question 4

Testimonium

Answer 4

All the language on the face of the deed.

Question 5

Moratorium

Answer 5

Govt restrictions don’t have to be recorded on a deed.

Question 6

What are optional Deed Clauses?

Answer 6

1. Habendum Clause - ‘To have & to hold’ - Found on face of deed & is a condition on the title.
2. Exceptions to reservations - things the deed does not convey such as trade fixtures.

Question 7

What covenants does a conveying deed include?

Answer 7

1. Covenant of Seizin - grantor has right to convey title.
2. Covenant of quiet enjoyment - grantor promises to defend grantee against claims of third parties.
3. Covenant Against Further Encumbrances - Grantor promises the property is free from encumbrances except those revealed.

Question 8

Covenant Against Further Encumbrances

Answer 8

Grantor promises the property is free from encumbrances except those revealed.

One of the 3 covenants on all conveying deeds.

Question 9

Covenant of quiet enjoyment

Answer 9

Grantor promises to defend grantee against claims of third parties.

One of the 3 covenants on all conveying deeds.

Question 10

Covenant of Seizin

Answer 10

Grantor has right to convey title.

One of the 3 covenants on all conveying deeds

Question 11

What are the two types of Warranties as they relate to title?

Answer 11

Further Assurance - obligates grantor to perfect the title, grantor liable for clouds that occurred during seller’s ownership but not before. In Special and General Warranty Deeds.

Warranty Forever - Grantor guarantees during and before ownership clouds on title. Only in a General Warranty Deed.

Question 12

What are the three types of deeds?

Answer 12

1. Patent Deed - govt (sovereign power) issued.
2. Conveying or Granting Deeds, i.e. Sheriff’s Deed.
3. Releasing Deeds, i.e. Quit Claim Deed.

Question 13

What is a warranty deed?

Answer 13

Private real estate transaction deed.

Special Warranty Deed is limited and used with new home sales. Limits builder’s liability.

General Warranty Deed is deed for resi resale. Best for buyer; worst for seller. Has all the covenants and warranties.

Question 14

Why record a deed?

Answer 14

Gives enforceability to claim of title. First one to record has stronger case. Maintain chain of title.

Question 15

What are the five releasing/other type deeds?

Answer 15

1. Quit Claim Deed - clouds
2. Gift Deed - type of quit claim. B/t relatives.
3. Disclaimer Deed
4. Correction Deed
5. Fiduciary Deed

Question 16

What is a quit claim deed?

Answer 16

1. A way to remove clouds from title out of court.
2. No covenants or warranties
3. May convey but not designed to convey.

Question 17

What is a gift deed?

Answer 17

1. Type of quit claim deed.
2. Is used for love vs value.
   Used between relatives.

Question 18

What is a disclaimer deed?

Answer 18

1. Spousal denial of interest in prior to taking title. If have title use quit claim deed.
2. No covenants or warranties.

Question 19

What is covered in the Owner’s Title Insurance Policy?

Answer 19

1. Errors by title co
2. Incorrect marital status
3. Hidden (undiscovered) defects - forgery, incompetent grantors.

Also called Standard

Question 20

What is not covered in the Owner’s Title Insurance Policy?

Answer 20

1. Item in public record
2. Rights of parties in possession
3. Unrecorded documents i.e. Mechanic’s Lien
4. Questions of survey
5. Gaps in chain of title (all policies have this exclusion)

Question 21

Who benefits from Owner’s Title Insurance Policy? Who pays?

Answer 21

Buyer(Vendee) benefits; seller (Vendor) pays.

Question 22

Who benefits from ALTA? Who pays?

Answer 22

Lender (mortgagee/beneficiary); buyer (Mortgagor/Trustor) pays.

ALTA = Extended Coverage = Broad Form Coverage

Question 23

What type of deed is used in property tax foreclosure?

Answer 23

Treasurer’s Deed

Question 24

What type of deed is used in bankruptcy sale?

Answer 24

Trustee’s Deed

Question 25

What type of deed is used in mortgage forclosure?

Answer 25

Sheriff’s Deed

Question 26

What type of deed is used in a trustee’s sale?

Answer 26

Trustee’s Deed

Question 27

What type of deed is used in a judgment execution?

Answer 27

Sheriff’s Deed

Question 28

What is adverse possession/prescription suit?

Answer 28

Method of acquiring title; it is NOT an easement:

1. Open
2. Hostile
3. Nortorious
4. By claim of right

Question 29

Devise

Answer 29

Real property title transfer on death - devisor is giver; devisee is receiver.

Question 30

Bequest or legacy

Answer 30

Personal property. Legacy = cash

Question 31

Holographic

Answer 31

Hand written will. Does not require witnessing.

Question 32

Formal or conventional will

Answer 32

Witnessed will signed by testator.

Question 33

Nuncupative (not in AZ)

Answer 33

Oral will. Weakest will.

Question 34

Codicil

Answer 34

An amendment to a will.