Estate titles, Transfer's, Deeds

Question 1

Deed:

Answer 1

The legal document that transfers a title of real estate from one party to another

Question 2

General warranty deed

Answer 2

Deed that provides the greatest protection for the buyer

Question 3

Special warranty deed

Answer 3

A deed where the grantor warrants only that the property was not encumbered during the time they held title, except as noted in the deed, and that they have done nothing during ownership to cloud or damage the title

Question 4

Bargain and Sale Deed:

Answer 4

A deed without any warranty against encumbrances; only implies that the grantor holds title and possession of the property

Question 5

Quitclaim deed

Answer 5

Provides the grantee with the least protection of any deed, while imposing the least liability on the grantor

Question 6

Deed in trust

Answer 6

A method of delivering a deed into a trust from a trustor to a trustee

Question 7

The general requirements for an instrument to qualify as a deed in Texas are that it must contain the following:

Answer 7

The name of the grantor and grantee

Statement of consideration

Granting clause, a.k.a. words of conveyance

Habendum clause

Legal description of the property being conveyed

Exceptions or reservations

Acknowledgement of the grantor’s signature

Delivery and acceptance

Question 8

The granting clause needs to indicate what interest in the property is

Answer 8

being conveyed by the grantor.

Question 9

When you need to define or limit the ownership interest of the grantee (such as a fee simple, defeasible fee, or life estate interest), use a

Answer 9

Habendum clause

Question 10

acceleration clause, which makes the entire loan amount

Answer 10

due immediately upon default.

Question 11

In a hypothecation clause, the borrower pledges

Answer 11

collateral to secure a debt or as a condition precedent to the debt.

Question 12

Release clause

Answer 12

This clause allows one party to withdraw under certain circumstances.

Question 13

There are four main types of deeds that are used in conveying real estate:

Answer 13

General warranty deed
Special warranty deed
Bargain and Sale deed
Quitclaim deed

Question 14

Five Basic Implied Warranties

Answer 14

Covenant of Seisin: The grantor warrants that they are the property owner and have the right to convey title. If this is broken, the grantee can recover the full purchase price.

Covenant Against Encumbrances: The grantor warrants that the property is free from liens or encumbrances (except those named in the deed.) If this covenant is broken, the grantee can sue for the cost of removing the encumbrance.

Covenant of Quiet Enjoyment: The grantor guarantees that the title is good against any third party who might bring court actions to establish superior title to the property.

Covenant of Further Assurance: The grantor promises to obtain and deliver any instrument needed to make the title good.

5.Covenant of Warranty Forever: The grantor guarantees that they will compensate the grantee for losses if the title fails in the future.

Question 15

A conveyance that carries only one covenant is a

Answer 15

Special warranty deed

Question 16

A bargain and sale deed, sometimes called a deed without warranty, contains

Answer 16

no warranties against encumbrances.

Question 17

Similar to deeds having exceptions and/or reservations (subject to clauses), there are some exceptions that title policies will not cover. Here are some examples:

Answer 17

Restrictive covenants and deed restrictions (common in platted subdivisions)

Special assessments (charges that government or homeowner associations have levied against real estate projects for special projects)

Question 18

Here are some more examples of title policy exemptions:

Answer 18

Utility easements (an easement that permits a utility provider the right to use and access a specific area of another’s property for gas, electric, water, and/or sewer lines)

Aquatic addenda (title insurance policies make an exception for waters, beaches, streams, and related matters)

Question 19

This title notice advises the buyer to:

Answer 19

Have an attorney examine the abstract of title or

Obtain a title policy. If a title policy is obtained, buyer should have an attorney examine the title policy commitment.

Question 20

Recording

Answer 20

The process of placing documents into the public record per state law

Question 21

Title search

Answer 21

An examination of all public records in the county to determine who has rights in the property and whether any defects exist in the chain of title

Question 22

The statute of frauds is a doctrine of law that requires

Answer 22

certain documents (known as instruments) that affect interests in real estate be in writing in order to be enforceable.

Question 23

If the ownership chain is broken anywhere along the line, meaning there are missing links or gaps in the chain, there is

Answer 23

cloud on the title that must be fixed through the courts with an action to quiet title.

Question 24

The person responsible for preparing this report(abstract of title) is called an

Answer 24

Abstractly

Question 25

Marketable Title:

Answer 25

Title that is free from significant encumbrances or defects that might otherwise prevent a purchaser from enjoying or eventually selling the property

Question 26

Torrens System:

Answer 26

Title process in which a property owner obtains a certificate that is recorded in the public records; not used in Texas

Question 27

Alienation:

Answer 27

The transfer of title to real estate

Question 28

Acquisition

Answer 28

The process of gaining ownership or control of real property or an interest in real property

Question 29

Condemnation

Answer 29

The governmental act of seizing private land through exercise of power of eminent domain

Question 30

Defeasible Fee Estate: Also known as fee simple defeasible or qualified fee, is a type of

Answer 30

freehold estate in which the person who has possession of the property is only able to hold the property until an event takes place or does not occur; two common defeasible fee estates are fee simple determinable and fee simple subject to condition subsequent

Question 31

Fee Simple Subject to Condition Subsequent: A defeasible fee estate in which a grantor conveys a parcel of real estate subject to

Answer 31

a condition of ownership; the grantor must go to court to assert their right to retake ownership (right of re-entry)

Question 32

Fee Simple Determinable Estate: A defeasible fee estate that will

Answer 32

come to an end automatically and immediately upon the occurrence of a designated event, the time of such occurrence being uncertain

Question 33

Conventional Life Estate:

Answer 33

A type of freehold life estate created by a deed or will that lasts for the duration of the tenant’s life

Question 34

Legal life estate:

Answer 34

A type of freehold life estate created by an act of law; a Texas homestead would be one example

Question 35

Pur Autre Vie: “For the life of another”; a type of freehold life estate that grants

Answer 35

someone ownership of a property for the duration of another person’s life

Question 36

Hereditament:

Answer 36

Any property, whether real or personal, that is capable of being inherited

Question 37

Testate :

Answer 37

Describes the state of having an existing will at an individual’s time of death

Question 38

Intestate:

Answer 38

Describes the state of NOT having a will at an individual’s time of death

Question 39

Testator:

Answer 39

A party who makes a will

Question 40

Devise

Answer 40

The gift of real property by will

Question 41

Devisee

Answer 41

A person who receives real property by will

Question 42

Legacy/Bequest:

Answer 42

A gift of personal property

Question 43

Legatee:

Answer 43

The person receiving a gift of personal property

Question 44

Once a will is made, it can be changed. That process is called

Answer 44

codicil

Question 45

Voluntary Alienation:

Answer 45

The method by which property is transferred from the current owner to another party either by sale or gift

Question 46

Adverse Possession:

Answer 46

Involuntary transfer of title from an owner who does not use or inspect their land for a number of years to another person who has some claim to the land and takes possession

Question 47

Easement by Prescription:

Answer 47

Implied easement granted after the dominant estate has used the property in a hostile, continuous, and open manner for a statutorily prescribed number of years

Question 48

Easement appurtenant:

Answer 48

Easement that exists when two different parties own adjacent parcels of land and one owner has the ability to cross the other’s land

Question 49

Easement in gross:

Answer 49

Easement created when an individual or company that does not own the land is allowed to be on the owner’s property for specific purposes

Question 50

Easement by necessity

Answer 50

Easement created when an owner sells a portion of their land that cannot be accessed unless by crossing the seller’s remaining land

Question 51

Dominant Tenement:

Answer 51

Describes the parcel of land that benefits from an easement appurtenant by having the right to cross another owner’s adjacent land

Question 52

Servient Tenement:

Answer 52

Describes the parcel of land that must allow an adjacent owner to cross; an easement appurtenant exists at the expense of this party

Question 53

Option Money:

Answer 53

A payment that the prospective buyer makes to the seller in exchange for the exclusive option to terminate the sales contract within a specified period of time (known as the “option period”) without penalty; also known as the option fee

Question 54

Promissory note

Answer 54

Agreement to repay per the terms of the loan

Question 55

Closing Agent:

Answer 55

The representative of the title insurance company; usually conducts closing

Question 56

Doctrine of Relation Back:

Answer 56

The principle that something done today will be treated as if it were done earlier; often applies to actions associated with the escrow process in real estate transactions

Question 57

Affidavit as to Debts and Liens:

Answer 57

A sworn statement in which the seller assures the title company (and the buyer) that there are no liens, unpaid bills for repairs or improvements, or undisclosed defects in the title

Question 58

In many sales transactions, two closings actually take place at this time:

Answer 58

the closing of the sale and (2) the closing of the buyer’s loan, which involves the signing of the loan documents and disbursement of mortgage funds by the lender.

Question 59

The closing agent:

Answer 59

Assembles all the documents necessary to finalize the purchaser’s loan and the seller’s transfer of title
Prepares the Closing Disclosure (a document that itemizes services and fees charged to the borrower) following the provisions of the contract and the lender’s instructions
Arranges the time and place of closing with all parties
Conducts the closing (in most cases)

Question 60

the broker needs to know that the individual conducting closing has the responsibility to file Form

Answer 60

Form 1099-S with the IRS.

This form, which can be completed online, reports proceeds from the sale or exchange of real estate.

Question 61

Real Estate Settlement Procedures Act (RESPA):

Answer 61

An act designed to protect consumers from predatory lending and educate them about closing and settlement services

Question 62

Deceptive Trade Practices Act (DTPA):

Answer 62

The primary consumer protection law in Texas, designed to prevent service providers from using false and misleading statements or deceptive practices

Question 63

A few key things about the Loan Estimate:

Answer 63

It must contain a good faith estimate of credit costs and transaction terms.

The creditor must be deliver or place it in the mail no later than the third business day after having received the consumer’s application.

It must also be delivered or placed in the mail no later than the seventh business day before consummation of the transaction.