Chapter 9 Flashcards
What is an Actual notice?
Evidence of ownership only from physical possession
What is Constructive Notice?
Evidence of ownership obtained from the recording of ownership in public documents. Serves as a notice to the world as the true owner
How far back does the root of title extend back from the recording of a claim?
30 years
What is a chain of title?
Timeline of recorded documents linking past owners from the root of the title to the present day
What is a title plant?
a compilation of public records containing copies of all real estate documents, arranged according to the date of recording in the public record
What is a title search?
A search of all documents that may affect title to a property
What is an abstract?
a date-order compilation of all documents that may have an effect on the tile to property being investigated
What is an opinion of title?
An attorney’s legal opinion as to the quality of title, based on a review of the title history
What are title defects (cloud on title)?
Claims or other factors that could cause a title to property to be declared invalid
What is a mortgagee’s title insurance (lender’s title insurance)?
Title insurance that protects the lender by paying the unpaid balance of the loan if the borrower loses title of the property
What is mortgagor’s title insurance (owner’s title insurance)?
Title insurance obtained by a property owner wishing to provide protection against issues in the title
What is alienation of title?
Transfer or conveying of ownership from one party to another
What are the ways of voluntary transfer of title?
Deed
Will
What are examples of involuntary transfer of title?
Descent and distribution
Escheat
Eminent Domain
Adverse Possession
What is Descent and distribution?
When someone dies intestate (without a will) and the title transfer is determined by law to the decedent’s heirs
What is Escheat?
When someone dies intestate (without a will) and has no heirs. Property goes to the state
What is Eminent Domain?
When the government takes your home to build something for the benefit of the public. This is done through the process of condemnation
What is Adverse Possession?
When someone hostile takes over your home and won’t leave for 7 continuous years. Your title goes to them if they paid taxes those 7 years
What is sleeping on your rights?
When an owner fails to eject a trespasser, causing them to lose the title of their home
What is a deed?
Document that is used to voluntarily convey ownership from one party to another
What are the requirements for a valid deed?
Must be in writing
Must have the names of all the parties
Must contain a legal description of the property
Must state the legal rights being conveyed
Must list the consideration ($$)
Must be signed by the grantor with 2 witnesses
Must contain the granting clause
Must be delivered and accepted
Who is the grantor in a deed?
The party conveying (transferring) ownership to someone else.
Must be competent in order to sign the deed
Who is the grantee in a deed?
The party that receives the ownership. Does not need to be competent, signature is not required
When is a title considered officially transferred?
When the deed has been voluntarily sent and voluntarily received
Which is the only necessary clause in a deed?
Granting clause (Premises Clause)
What is stated in a premises (granting) clause?
Names of the parties
Words of conveyance
Consideration
Date of transfer
Legal description of the property
What does the Habendum Clause contain?
States the bundle of rights that are being conveyed. What you are about to have and hold.
What is the Reddendum Clause?
Clause in the deed used in a remainder estate to reserve a right in the title, not the land
What are warrants, or deed covenants?
Promises made by a grantor to the grantee giving assurance as to the quality of the title
What is a warrant of seisin?
Promise by the grantor to the grantee that they own the property and have the legal right to convey it
What is Warrant of quiet enjoyment?
Assurance given by the grantor to the grantee that no one will be able to make a claim against the ownership of the property
What is a Warrant of Further assurance?
promise given by the grantor to take whatever action is necessary to protect and defend the title forever
Which title insurance is transferrable?
Lender’s title insurance, if they sell the loan to another company. The owner’s title insurance is not transferrable
What is a warrant against encumbrances?
Assurance given by the grantor that there are no encumbrances against the property and that they are responsible for any liens or claims not listed on the deed
What is a covenant of warranty forever?
Assurance given by the grantor that the grantee will be able to enjoy possession and uninterrupted use of the property forever
What is a quitclaim deed?
Deed that contains no warrants (or covenants), which conveys any interest the grantor may have in the property. This is the best deed for the seller as it provides the least protection to the buyer.
Fastest method of transfer
What is a Bargain and Sale Deed?
Type of deed that contains only one warrant, the warrant of seisin, stating that the grantor is the true owner of the property and has the legal right to convey it
What is a General warranty deed?
Type of deed that provides the best protection to the grantee that promises that the grantor is the true owner, has the right to sell, and will defend the title against any and all claims forever
If no deed type is specified in a contract, this is the type of deed used
When is a quitclaim deed used?
To cure defects or a cloud on the title
To transfer one spouse’s interest in a property to the other in a divorce
What is a Personal Representative’s Deed?
Deed used to convey the property of an individual who died intestate (without a will)
What is a Guardian’s Deed?
Deed used to convey the property of a minor on the minor’s behalf
What is a Committee’s Deed?
Deed used to convey property owned by a mentally incompetent person
What is a Master Deed?
Deed used by a developer to convey land to a condominium association so they can convey individual units
What is a Unit Deed?
Deed that conveys individual condo units from the association to the individual owner
What is a cloud on title?
Term used to describe a property with a defective title
What is a Suit to Quiet Title?
Court action taken to resolve a dispute regarding a claim to a title
What is Police Power?
The government’s right to restrict the use of land to protect the health, safety, or welfare of the citizens
This is exercised by zoning codes, building codes, and health codes
What is the process the government has to go through to take your property for public use?
Condemnation proceeding
What is Property Taxation?
The power of local government to levy taxes on private property, which if not paid, may result in a lien on the property which could end in foreclosure
What are the types of governmental limitations on private property rights?
Property Taxation
Eminent Domain
Police Power
Escheat
What is encroachment?
Unauthorized physical intrusion onto another’s property
Who is the Lessor?
A landlord giving a lease
Who is the Lessee?
Tenant signing the lease
What is required for a legal lease?
Competent parties
Names and signatures of the lessor and lessee
Consideration ($$)
Term of the tenancy
Legal description of the property
What is a Net lease?
Lease for commercial and industrial companies
Lease in which a tenant pays a fixed rent plus insurance, maintenance.
What is a gross lease?
Lease used for residential properties
Tenant pays a fixed rental amount. Landlord pays all other expenses
What is a percentage lease?
Lease for retail centers and malls
Tenant pays rent and a percentage of their income
What is a lease-option?
Lease with an option to buy within a specified time frame
What is a Graduated payment or step-up lease?
Lease containing specified rent increases at pre-determined times in the lease
What is a sale-leaseback?
Lease where the owner sells the property to an investor with a condition that the new owner immediately leases it back to the seller
What is a Lien?
Financial claim against a property by a creditor or unit of government that is used to secure the payment of a debt owed by the property owner
What is a superior lien?
Involuntary lien that takes precedence over other liens and get paid first in the event of a foreclosure
What is a junior lien?
Lien that is typically paid based on the date of recording. always gets paid after superior liens have been paid
What is a specific lien?
Lien that is specific to one property
What is a general lien?
Type of lien that applies to any property the person may own
What is a Special Assessment Lien?
Superior lien owed by a property owner that is given by local government for improvements such as road paving or sidewalks
What is a mortgage lien?
Junior lien that is given by a borrower as security for repayment of a loan
What is a judgement lien?
General Junior lien imposed when a party is entitled to collect damages awarded by a court as the result of a lawsuit
What is a Construction Lien?
Junior Lien entitled to a builder or contractor who has not been paid money for materials or labor used to build or improve a property
This lien dates back to the date on which the labor was first performed
What is Lis Pendens?
Notification of a pending lawsuit against a property owner
