Chapter 9 - Title Records & Transfer of Title

Question 1

Bargain & Sale Deed

Answer 1

Any deed that recites a consideration and purports to convey the real estate

• -typically no title search is done
• -sales price is typically lower

Question 2

Deed

Answer 2

A written instrument which when properly executed and delivered conveys title to real property from one person (grantor) to another (grantee).
Purposes of a deed:
–Transfer of ownership of land from one person to another
–To prove ownership of a parcel of real estate

Question 3

Grant Deed

Answer 3

A limited warranty deed using the word “grant” or like words that assures a grantee that the grantor has not already conveyed the land to another and that the estate is free from liens/encumbrances placed by the grantor.

Question 4

Grantee

Answer 4

A person to whom a grant is made.

Question 5

Grantor

Answer 5

A person who transfers his or her interest in property to another by grant.

Question 6

Quitclaim Deed

Answer 6

A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest.

• -offers the least protection for buyers
• -buyer is encouraged to conduct a thorough title search to make sure they’re getting a property free of liens, easements, and encumbrances.

Question 7

Sheriff’s Deed

Answer 7

A deed given by court order in connection with the sale of a property to satisfy a judgment.

Question 8

Special Warranty Deed

Answer 8

A deed in which the grantor warrants or guarantees the title only against defects arising during the grantor’s ownership of the property and not against defects existing before the time of the grantor’s ownership.

• -grantor only covenants that the property is not encumbered by mortgages or other liens and that the grantor has title to the property
• -typical for commercial real estate

Question 9

Voluntary Alienation

Answer 9

Transfer of title to an asset with the consent of the owner through executing a deed or through a will

Question 10

(General) Warranty Deed

Answer 10

A deed used to convey real property which contains warranties of title and quiet possession, and the grantor thus agrees to defend the premises against the lawful claims of third persons.
–provides the most protection for the buyer (grantee) – grantor promises there are no other claims of ownership of the property, no encumbrances (i.e., mortgages or liens), no boundary disputes, and promises that these claims are valid forever

Question 11

Conveyance

Answer 11

having the right to transfer real estate to another

Question 12

Tax Deed

Answer 12

Seizure of Property - state law allows a local official to sell a property that does not pay their property taxes, in order to pay off the unpaid taxes.

• -Super lien
• -auctioned off even though it still has other mortgages or liens on title

Question 13

Trustee’s Deed

Answer 13

deed used after a foreclosure sale - states where a mortgage on property is accomplished by the owner giving a Deed of Trust to the lending bank. A foreclosure sale ends with a Deed of Trust going from the bank to the new owner.

Question 14

What are the required elements of a deed?

Answer 14

• -Legally required to be in writing
• -Date
• -Lists the parties, the grantor & grantee
• -Legal Capacity of signors
• -Consideration - exchange of something of value
• -Legal Description of the property
• -Granting Clause - stating that property is being transferred
• -NOTARIZED signature of the grantor
• -Deed must be conveyed (i.e., handed over to the grantee) and recorded with the county to prove evidence of delivery

Question 15

Acceptance

Answer 15

The act of agreeing or consenting to the terms of an offer thereby establishing the “meeting of the minds” that is an essential element of a contract. If acceptance is not achieved, the transaction may be voided and have no legal significance.

Question 16

Acknowledgment

Answer 16

A formal declaration made before an authorized person, e.g., a notary public, by a person who has executed an instrument (i.e., deed) stating that the execution was done through his/her free will.

Question 17

Recording

Answer 17

The process of placing a document on file with a designated public official for public notice. This public official is usually a county officer known as the County Recorder who designates the fact that a document has been presented for recording by placing a recording stamp upon it indicating the time of day and the date when it was officially placed on file. Documents filed with the Recorder are considered to be placed on open notice to the general public of that county.

Question 18

Actual Notice

Answer 18

Express or implied knowledge of a fact.

Question 19

Constructive Notice

Answer 19

Notice of the condition of title to real property given by the official records of a government entity which does not require actual knowledge of the information.
–even though a person wasn’t specifically told of the recording, everyone is deemed by law to know about it because of the nature of public recording.

Question 20

Involuntary Alienation

Answer 20

transfer of ownership without the consent of the owner

• -transfer by descent
• -escheat
• -eminent domain
• -adverse possession

Question 21

Will

Answer 21

document intending to communicate the wishes of an individual (testator/testatrix) after death - gives instructions on how to distribute and dispose of their assets after they die

Question 22

Devise

Answer 22

A gift or disposal of real property by last will and testament.

Question 23

Devisee

Answer 23

beneficiary of a will that involves a transfer of real property / One who receives a gift of real property by will.

Question 24

Devisor

Answer 24

One who disposes of real property by will.

Question 25

Bequest

Answer 25

beneficiary of a will that involves a transfer of personal property.

Question 26

Intestate

Answer 26

A person who dies having made no will, or one which is defective in form, is said to have died intestate, in which case the estate descends to the heirs at law or next of kin.

Question 27

Probate

Answer 27

The official proving of a will. The legal process wherein the estate of a decedent is administered.

Question 28

Testate

Answer 28

Having made a valid will before one dies.

Question 29

Testator

Answer 29

One who makes a will.

Question 30

Transfer by Descent

Answer 30

when a property owner dies intestate (without a will), the state government is forced to determine who the property should go to through trying to find their heirs (spouse, children, grandchildren, etc.)

Question 31

Escheat

Answer 31

Taking the transfer by descent a step further, escheat occurs when the state government cannot find heirs to pass the property to OR if a property is abandoned. The state government ends up taking ownership of the property. Only state governments can use escheat–not federal, county, or municipal governments

Question 32

Eminent Domain (aka Condemnation)

Answer 32

The federal or state government legally taking private land or property after determining it is needed for public use or economic development. Private owners are fairly/justly compensated after their land/property is seized, leaving the owner is the same financial position they were in before the property was taken.
–Condemnation indicates that the property was inhabitable

Question 33

Adverse Possession

Answer 33

occurs when someone who is not the owner of the property can become the owner if they live there long enough (i.e., squatters’ rights). Squatters cannot hide the fact that they are there and the land needs to be put to good use through cultivation, improvement, or protection from substantial enclosure.

Question 34

Title

Answer 34

legal term to describe the bundle of rights in a property that a party can own - exclusive possession, acquisition, access easement, partition, exclusive use and enclosure, hypothecation, and conveyance.

Question 35

Equitable Title vs. Legal Title

Answer 35

Equitable title - actual enjoyment and use of the property
Legal title - ownership
Ex: in trusts, the beneficiary has equitable title, but the trustee holds legal title

Question 36

Chain of Title

Answer 36

A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be vested in the current owner.
–confirmed in a title search

Question 37

Abstract of Title

Answer 37

A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title.

Question 38

Opinion of Title

Answer 38

An attorney’s written evaluation of the condition of the title to a parcel of land after examination of the abstract of title.

Question 39

Marketable Title

Answer 39

Title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept.

• -no flaws in the legal description
• -no breaks in the chain of title
• -no unresolved liens, easements, shifting boundaries, etc.

Question 40

Cloud on Title

Answer 40

A claim, encumbrance or condition which impairs the title to real property until disproved or eliminated as for example through a quitclaim deed or quiet title legal action (i.e., paying off lien).

Question 41

Title Insurance

Answer 41

type of indemnity insurance on a title that is designed to protect lenders and homeowners from financial loss due to any defect in title after purchase of a property.

• -designed to ensure ownership rights
• -mistakes can happen after issuance of clear title

Question 42

Owner’s Policy

Answer 42

type of title insurance purchased at closing that’s designed to protect the buyer of the property from any financial losses incurred due to errors in title. This policy protects the immediate buyer of the property as well as their designated heirs

Question 43

Gap Insurance

Answer 43

type of title insurance that comes into play between the closing and the issuance of the title insurance policy. If any title errors come to light during that time, gap insurance would cover it.

Question 44

What is the process of getting title insurance?

Answer 44

1. Issue initial request for title insurance with title agency
2. Once research is complete, title agent will examine the docs of record to evaluate the title status of the property
3. Title Commitment issued, functioning as a tenuous agreement that a title will be issued at a later date, providing that the terms of the commitment are met (i.e., amount of insurance, parties involved, exceptions, and other requirements)
4. Buyer closes on the property - only after closing and the payment of the insurance premium will title insurance actually be issued and delivered.

Question 45

Bill of Sale

Answer 45

Legal document designated to demonstrate a legal transfer of personal property of high value (>$500), protecting both sides of the transaction from any disagreements that may arise.
–exchanged after the transfer of goods and confirmation of full payment is completed