Chapter 5: Transfer of Title to Real Property Flashcards
1
Q
What are the two functions of a title?
A
- it represents the bundle of legal rights the owner possesses in the real estate;
2: it denotes the facts that, if proven, enable a person to recover or retain ownership or possession of a parcel of real estate.
2
Q
What does alienation mean?
A
- the act of transferring property to another.
3
Q
What is Voluntary alienation?
A
- transfer of title made as either a gift or a sale with the wishes and consent of the property owner.
- owner must use some form of deed.
4
Q
What is a deed?
A
- is a written instrument by which an owner of real estate intentionally conveys right, title, or interest in the parcel of real estate to another.
- also known as evidence of title.
5
Q
what is a Grantor? Grantee
A
- a grantor Is the owner of the real estate parcel.
- a grantee is the person who receives the title.
- A deed is executed(signed) only by the grantor(s) the grantee(s) does not sign the deed.
Grantor- Must have a legal existence, be of lawful age, and be legally competent in order to convey title to real estate.
6
Q
What should a VALID deed contain?
A
- Deed must be in writing.
- The grantor must have the legal capacity to execute the deed. (sound mind)
- Grantee named with reasonable certainty to be identified.
- There must be adequate words of conveyance. Grantor: Must show intent.
- There must be an accurate legal description of the property conveyed.
- The deed must be signed by the grantors ONLY!
- the deed must be delivered to and voluntarily accepted by the grantee.
7
Q
What is a general warranty deed?
A
- Provides a greater protection than any other deed.
- best deed for grantee.
- gives grantor greatest degree of liability.
- it is referred to as;
#general warranty deed.
# a full covenant and warranty deed;
# or simply a warranty deed.
8
Q
What are the 6 North Carolina special Purpose deeds?
A
- A correction deed is used when there has been an error in a previous deed.
- A deed of gift is used when a grantor conveys property as a gift.
- A deed of release is used to release a parcel of property from a mortgage or deed of trust lien when the real estate loan has been paid in full.
- a trustees deed is a deed of conveyance executed by a trustee is a trustees deed, and is used when a trustee named in a will, trust agreement, or trust deed conveys the real estate to anyone other than the trustor. Generally used to transfer title after a foreclosure auction.
- A timber or mineral deed , as discussed in Ch. 2, is when some rights can be severed from the land and transferred by deed, such as the harvesting of timber or minerals from the land.
- Deeds executed pursuant to court order is a classification of deed that covers deeds such as a sheriffs deed, a tax deed, a guardians deed, and an executors deed. They are conveyed to show a transfer of property via court order or by will.
9
Q
what is a title?
A
- the right to or ownership of land.
10
Q
North Carolina Excise tax- based on sale price of property.
A
$1 for every $500.
- To calculate excise tax:
- if sales price is not an even $500 round up.
- Divide by $500
- multiply by $1.
EXAMPLE : Purchase Price = $89,250 round up= $89,500
$89,500 / 500 = 179 x $1 = $179 Excise Tax.
11
Q
Involuntary alienation- which means without the owners wishes or consent. 4 Types of Involuntary alienation.
A
- Escheat- When a person dies (intestate/without a will) and leaves no heirs, the title to that persons real estate passes to the state by the states power of escheat.
- Eminent Domain- is the right of the government to acquire privately owned real estate for public use. (Condemnation- is the process by which the government exercises this right, by either judicial or administrative proceedings) # In the taking of property just compensation is to be paid to the owner of said property and the owners rights to own said property are to be protected by due process of law.
- Lien Foreclosure- land can be transferred without the owners consent to pay off debts by foreclosing on the property, selling it, and the proceeds go to paying off liens such as mortgage loans, real estate taxes, Mechanics’ liens, and general judgements against the property owner.
- Adverse possession- is when another person claims that someone else’s land is there’s and they must have reason to believe so. OCEAN is the mnemonic was to remember
Open (well known to others)
Continuous ( uninterrupted for the required period)
Exclusive (not shared with another)
Adverse to the true owners possession (the adverse possessor must intend to claim that the land occupied is his or her own,) and
Notorious/hostile (without permission of the owner)
- In NC if the possessor is trying to acquire privately owned property and has “color of title” (a faulty document that purports to give the adverse possessor title) the period of possession is 7 years.
- If no color of title, the period of possession is 20 years.
It is difficult to prove adverse possession.
12
Q
transfer of a deceased persons property:
A
- By descent (intestate succession)- if a person passes without a will in place all property will be distributed to the descendants heirs. A will, will be made by the state, and the state will appoint someone to distribute the deceased’s possessions.
- transfer of title by will: a will is made by a mentally competent owner to convey title to real and personal property on the owners death.
- takes effect only after death;
- co-owners in a joint tenancy or tenancy by entirety can not be affected by a will;
- except in marriage, a spouse can not disinherit another spouse.
13
Q
Title records:
A
Are public records.
14
Q
Public records:
A
- Contain detailed information about every parcel of real estate in a city or county. They are maintained by :
- recorders of deeds
- county clerks
- county treasurers
- city clerks
- collectors, and
- clerks of court
15
Q
Title examination process
A
- public record search (attorneys in NC; title companies in other states)
- create “chain of title”
- Create “abstract of title” ;
- summary of conveyances; encumbrances
- certifies that history is complete
- attorney gives “ opinion of title”
- Thus the need for title insurance
- owner vs lender policies
- Lender’s policy does not protect buyer’s equity.
