Conveyances And deeds

Question 1

Ways to Transfer Titles

The conveyance or transfer of title from one owner to another involves ALIENATION
Of title by current owner and acquisition of title by new owner.

Every property owner has a right of alienation.that is the right to transfer his interest in the property to another.

Answer 1

Alienation may be voluntary or involuntary.

Voluntary alienation refers to such actions as the sale, gift, or will the property to another.

Involuntary alienation refers to transfer of ownership of the estate by operation of law (by court).

Question 2

5 ways to transfer title:

Answer 2

1. To and from the government
2. By physical action
3. By adverse possession
4. Upon death
5. By court action

Question 3

Titles transferred to and from Government.

Forms of transfer of title to and from government include: 
Patent
Forfeiture 
Dedication
Eminent Domain

Answer 3

PATENT: the first grant one would find in the chain of title is a patent issued by the government.

Question 4

FORFEITURE

Property may be forfeited to the government if it was used in commission of a crime.

Answer 4

DEDICATION
Is the gift or donation of property to the public without consideration. May happen through a dedication in public records, deeds, wills

Through statutory dedication, a developer may be required to turnover land in a proposed sub division to a public use, streets and public areas, in order to obtain approval for the development.

Through common law dedication, a local government may declare property to be dedicated for public use, due to a property owner allowing the public to use the property for an extended period.

Question 5

EMINENT DOMAIN
The government’s right to acquire title to property for public use by paying a just and fair compensation to the owner.

2 critical events are public use and fair compensation. The land is taken for public use: ie. Streets, highways,airports, public buildings, rail etc.

A district school board may seek property for school througheminent domain

A city can acquire property to widen a road through eminent domain.

Answer 5

CONDEMNATION is the process by which property is taken for public use under eminent domain.

Just compensation may include:
Compensatory Damages for fair market value
Severance Damages for loss in value to the portion of property not taken.
Consequential Damages for loss in value due to surrounding property taken. If the loss in value or use is too extensive, owner may sue for inverse condemnation., to require the government to take and pay for the property.

Question 6

PHYSICAL ACTION

Accession is the term for any additions to land or property whether by man-made or natural causes.

Man-made additions include “annexation “of fixtures. When owner builds house on land, the house becomes part of the title to the land.

Addition to one’s land by gradual deposit due to natural causes is “accretion”

“Reliction” is a gradual recession of water from its usual high mark so that the newly uncovered land becomes the property of the adjoining riparian property owner.

Answer 6

Physical Action

LOSS

Question 7

Title may be lost and acquired by ADVERSE POSSESSION

Answer 7

A claim of adverse possession would be defeated if during the required # of years:

The adverse use were discontinued even temporarily at any time

The true owner asserted ownership rights and resumed actual possession

The true owner took legal action to have the adverse possessors removed.

Question 8

In many states, the adverse possessor must also be in possession under a claim of right or color of title:

Answer 8

A “claim of right”. Means the adverse possessor claims ownership of the land.

A “color of title” means the adverse possessor claims title under a written conveyance of the property or by operation of law from another person claiming title under a written conveyance.

Question 9

Title generally cannot be acquired by adverse possession when the true owner is:

Answer 9

Under legal age

Incompetent or insane

The government can take title to private property by adverse possession.

Question 10

In order to get a marketable title to property, an adverse possessor would have to obtain a “quitclaim deed” from the ousted owner.

Answer 10

“Quiet Title Action” is a lawsuit to determine and resolve all adverse claims to ownership of the property.

Question 11

A person who merely uses another’s property openly, notoriously and hostilely for a continuous # of years cannot claim title by adverse possession. But can claim an “easement” giving him a permanent, irrevocable right to use that property.

Answer 11

Acquisition of an easement through adverse use is called PRESCRIPTION.

therefore, a person driving across another’s land for a certain number of years w/out permission could get right of way through prescription,
But not title by adverse possession.

Question 12

DEATH

UPON A PERSON’s death, property may pass on to others through probate or without probate.

Answer 12

No Probate

Joint Tenants a person has right of survivorship to any co owner named in deed.

If couple as tenants by entirety, upon death of one, the estate passes to the other to be held as a tenant in severalty.

If a person has a life estate, upon death of person on whose life estate is based, title will either

Revert to the grantor or grantors heirs or devisees.

Pass to the remainderman as specified in the deed.

Probate is not required for the above instances.

Question 13

PROBATE is the process by which a court:

collects the deceased assets.

Pays legal claims of his creditors.

Distributes the remainder of the estate to those entitled to it.

Answer 13

Upon death of a person in severalty or a tenant in common, his interest would be probated whether he died in testate ( w/ Will). or intestate. W/out will)

Person dies testate, an executor distribute real property through a valid will are called
Devisees.

PErsonal property will pass by bequest or legacy are called legatees.

Question 14

When person dies intestate, the estate is transferred by descent to decedent’s heirs.

Answer 14

If no heirs are found, any real property will revert to the government through “ESCHEAT”.

Question 15

COURT ACTION can result in a conveyance of title:

Answer 15

A co-owner may hav his interest separated from the others through a partition suit.

Divorce Decrees may transfer title from both spouses to one spouse or require property be sold.

Bankruptcy Court may require property to be sold to satisfy claims of creditors

Courts may have property sold to pay off judgement creditors by means of an execution sale. To get paid the creditor goes to court. The court requires the sheriff to sell property is a “writ of execution” so the sale is termed an “execution sale.”

Real property used as collateral for a debt can be lost through foreclosure if the debt is not repaid according to its terms.

Question 16

Court action:

FORECLOSURE can result from failure to pay mortgage, construction liens, contracts for deeds, property taxes or special assessments.

Answer 16

JUDICIAL foreclosure: upon default, the credito requests court to foreclose
In some states, the request may be for “strict foreclosure.” This would terminate the property’s owner rights and give title to creditor.

In most cases the request is for “foreclosure and sale”which terminates owner’s rights and causes sheriff to sell property to highest bidder.

Question 17

A NON JUDICIAL FORECLOSURE is allowed when the mortgage or deed of trust used to make real property security for a loan has a power of sale provision, giving the lender or trust the power to foreclose and sell property w/out going to court.

Answer 17

A property owner has an “equitable right of redemption” in foreclosure actions.
This is the right to keep title by paying off the entire debt prior to the date of foreclosure.

In a tax foreclosure in Hawaii the property owner will also have “a statutory right of redemption”. Allowing him to buy back the property by paying off the entire debt within a specified period AFTER the foreclosure.

Question 18

FORFEITURE UNDER CONTRACT FOR DEED aka a real estate contract or land sales contract. Is a contract in which buyer agrees to pay seller over a period of time.

Answer 18

Often the seller has in the contract a provision allowing for forfeiture of the vendee interest, if he defaults so the vendor can reclaim property without having to resort to foreclosure.

Real property may be alienated as a result of a gift or a sale by means of a deed.
This is the most common means of title transfer.

Question 19

DEEDS.

Main purpose of a deed is to provide clear evidence of a change in title or transfer of interest in real property. Because the deed shows the transfer called “conveyance.”

The deed is evidence of title to the property but not the “title” itself.

Answer 19

The term TITLE refers to the intangible rights of ownership.

There is no document called title that shows ownership of real property. Instead the deed is evidence that one has rights of ownership.

Question 20

Elements of a Deed
Granting Clause

1. Be in Writing
2. Have words of conveyance.
3. Description of property
4. Identify parties on deed
5. Signed by grantor
6. Grantor must be legally competent
7. Be delivered.

Answer 20

HABENDUM. CLAUSE

THIS clause defines and limits the “quality and quantity “ of estate being conveyed.

Without this clause, the deed is presumed to convey a fee simple title.

Only needed  in deed when grantor is conveying “less than a fee estate”.
 A life estate should have this clause.
To have and to hold
Limits quantity and quality of estate.
Not required in deed.

Question 21

Deed Restrictions , restrict the grantees use of the property. (CC&Rs)
Covenants, conditions and restrictions.

Covenants and conditions may not be used for the purpose of illegal discrimination.

Any illegal covenant or restriction would cause the document to be null and void.

Answer 21

A covenant is a promise by the grantee to do or not do something with regard to the property.
A condition is a qualification of the estates being granted

Question 22

Property Description.

Adequate to identify the property being conveyed. Usually a legal description based on a survey.

Answer 22

The description may include exceptions and or reservations.

A deed “exception” leaves out, withholds or excepts a part of real property described in the deed.

A deed “reservation” reduces the rights conveyed by creating a new right of the grantor.

This would be used if the grantor wanted to keep an easement of mineral rights on the land.

Question 23

IDENTIFY PARTIES
A deed must properly identify by name the grantor and grantee.

COMPETENT GRANTOR
The grantor must be legally competent that is: alive, mentally competent and legally authorized to convey title, at the time the deed is delivered.

A deed would be voidable ( enforceable but able to be voided) by a grantor who is a minor or who determined to be mentally incompetent at time of delivery of the deed.

Answer 23

SIGNATUREThe grantor, or authorized agent with written document must sign the deed. All must sign the deed. The signatures do not have to be witnessed.

Question 24

DELIVERY
the deed will not convey title until it is delivered to the grantee and accepted. Acceptance is presumed if the grantee does not reject the deed. For delivery to be effective the grantor must:

Answer 24

Intend delivery. Delivery depends on intent of the grantor.

Intend title transfer to be immediate, not in future.

Give up control of the deed by:
Giving deed directly to grantee
Recording the deed
Giving deed to an escrow agent with instructions to deliver deed to the grantee
Or to record the deed after certain conditions are met

A deed may be used only once. Once a deed I’d delivered, it cannot be used again to convey any interest in the property.

Question 25

Other items Required for Validity or Recording.
In a few states the deed must be acknowledged in order to be valid.

In most states acknowledgement of the deed by grantor is required only in order for the deed to be recorded.

An “acknowledgement” is signing before a notary or other eligible official authorized to take acknowledgements of deeds that conveyance is voluntary.

Answer 25

A deed will generally show the grantees consideration for the interest being transferred.

In some states, this is required for validity.

In other states, it may be required for the deed to be recorded.
The consideration may be required to be shown as actual amount paid for property for tax assessment or conveyance tax purposes.

In the case of a gift, it may show a nominal fee.

GRANTEE need not be competent or sign a deed.
The only requirement of the grantee is that he be either a living person or legal person( such as a corporation) capable in law of accepting delivery of the deed.

Question 26

DEED FORMS

There are generally 4 forms of deeds.

Answer 26

1. Warranty Deed aka General Warranty Deed
2. Special Warranty Deed
3. Bargain and sale Deed
4. Quitclaim Deed

Question 27

Warranty Deed (General Warranty Deed)
This ‘‘tis the deed generally required.

From grantee’s POV the general warranty deed is the most desirable type of deed.

It provides the greatest protection for the grantee.
It creates the greatest liability for the grantor.

Answer 27

Normally the warranty deed states or implies the following warranties or covenants:

1. Covenant of Seizen:
   This guarantees the grantor owns and possesses the property, has a fee simple absolute interest, has no conditions restricting title and has right to convey the title.
   The grantor would be liable for full price of property if there were an undisclosed condition or he had only a life estate.
2. Covenant vs. encumbrances
   This guarantees there are no tax liens, mortgages, assessments or other liens except as stated in he deed
3. Covenant of Warranty
   This provides grantor will defend the title vs. all persons who lawfully claim title.
4. Covenant of quiet enjoyment
   This warrants that the grantee will not be disturbed by a person with a lien or better claim to the property.
5. Covenant of further assurance
   This warrants the grantor will perform any additional act or provide any document needed to provide the title as promised.

Question 28

DEED FORM

SPECIAL WARRANTY DEED is a limited warranty deed.
It limits the covenants by the grantor.

In this deed the grantor conveys and specially warrants to the grantee the real property free of encumbrances created or suffered by the grantor except as specifically set forth in the deed.

Answer 28

If an owner were not certain that the property he was selling was completely unencumbered but he was willing to guarantee the title vs. defects arising from any action.,by,through or under himself, he could offer the buyer a special warranty deed.

Question 29

Deed Forms

BARGAIN AND SALE DEED
a grantor willing to convey title but without any warranties of title may use this deed.

Answer 29

This deed simply states grantor conveys real property to the grantee.

It does not provide any warranties or covenants of title in the grantee or the grantee’s successor.

Therefore, it will not provide grantee against title defects.

Question 30

Deed Forms

QUITCLAIM DEED
The quitclaim deed creates the least protection of any deed for the grantees and entails the least liability for the grantor.

Answer 30

It passes any interest the signer may have in the property but does not tie him to any warranty.

The interest could be fee simple, an easement, a claim of adverse possession, color of title or any other interest the grantor may have.

The quitclaim deed might convey no ownership rights at all.

It merely releases any claims of the grantor to rights in the property.

For this reason a quitclaim deed is most commonly used to remove a cloud from the title.

A cloud on the title is an encumbrance, charge or claim vs. the property which could legally make it impossible for the owner to convey a marketable title.

Question 31

Other Deeds.

In some states “grant deed” are used instead of warranty deeds.

Deeds may be referred to by their purpose:

Answer 31

A REFORMATION DEED aka correction deed.
Has wording stating the deed is given to correct a specific error in a previous deed.
A GIFT DEEDis used to make a gift of real property. The consideration given is good consideration (love and affection) rather than a valuable consideration.

A TAX DEED is used to convert title as a result of a tax foreclosure.

A SHERIFF’S DEED is used to convey title of property sold by the sheriff under a court foreclosure or execution of judgement.

AN. ESTOPPEL DEED is given by a delinquent borrower to the lender in order to avoid foreclosure.

A MINING DEED conveys mineral rights or an interest in a mine.

A TRUSTEE’S DEED is given by a trustee to the purchaser of property sold at a trustee’s sale, resulting from the default on a deed of trust.

Question 32

RECORDATION.

IN ORDER TO KEEP TRACK OF WHO HAS WHAT INTEREST IN A PARCEL OF REAL PROPERTY, STATE STATUTES PERMIT THE RECORDING OF DOCUMENTS RELATING TO REAL ESTATW.

Answer 32

Recording enables persons to give public nortice concerning documents affecting title to real estate.

Once recorded, the info in the deed or other document is available for public inspection.

Question 33

Recording System

Recording of documents affecting title to real estate must be performed in the country in which the property is located.

Answer 33

The recording system:

Enables a person to provide constructive notice to the world of the interests in a particular parcel of real estate.

Helps prevent forgery in recorded documents by requiring acknowledgement by a grantor in front of a notary public.

Establishes legal priority of interests .
Generally whoever records first and is without notice of a prior claim of right has priority.

       The date and time stamped establish legal priority for those interests that are recorded first.

Question 34

NOTICE

while an unrecorded deed is valid and binding between the parties to the deed, it would be void against the rights of a Bona Fide purchaser who first records his deed.

Answer 34

A Bona Fide purchaser is a purchaser who pays valuable consideration in good faith and has no notice of existence of another’s person’s claim to title.

A person is without notice if he has no actual knowledge of another’s rights to the property and has no reasonable means of obtaining that knowledge.

A person has notice of a prior claim of right when he has either a CONSTRUCTIVE notice or ACTUAL notice.

Question 35

CONSTRUCTIVE NOTICE.

When an owner of land provides the public with a means of obtaining knowledge of his rights in the land, that owner is providing constructive notice of his interest in the land.

Answer 35

A person can provide constructive notice in 2 ways:

1. Take possession of the land.
   Possession of land by person other than grantor gives constructive notice.
   A grantee who has an unrecorded deed provides constructive notice upon taking possession of the property by:
   Occupying the property
   Renting the property to a tenant who occupies the property.
   Any other means that would enable an interested person to determine that
   Perhaps the owner of record is not the current owner.
2. Properly record the deed. A better way of protecting one’s rights is to record the deed.

Question 36

ACTUAL NOTICE

A PERSON WHO HAS ACTUAL KNOWLEDGE OF A FACT IS SAID TO HAVE
AN ACTUAL NOTICE.

Answer 36

A person has constructive notice of ownership when a deed is recorded and has actual notice when he sees the recorded deed.

While he has constructive notice when a person is in possession of the property, he has actual notice when he knows the person is in possession of the property or
Knows of the person’s right of possession..