Ownership Flashcards
1
Q
Allodial System
A
Individuals are entitled to own property without proprietary control of the king/government. All property in the United States is under the Allodial System.
2
Q
Fee Simple Absolute
A
Highest degree of ownership.
Has unlimited duration.
Is inheritable.
Is subject to only the government powers.
3
Q
Fee Simple Defeasible
A
Fee simple conditional
An estate that dictates, “on the condition that…”
An estate that provides the “right to re-enter”
Example: “I will sell my property to you with the condition that alcohol is never served on the premises. If you have a wine and cheese party, then I have the right to take back the property.”
4
Q
Fee Tail
A
Property inherited by a monarch is illegal in the United States.
5
Q
Estate in Reversion
A
A life estate that is deeded to a life tenant - incomplete bundle of rights during lifetime.
A reversion estate that is retained by the grantor. After death of life tenant, grantor has complete bundle of rights.
6
Q
Estate in remainder
A
Estate in remainder: differs from the above because the remainder estate is given to a third party who is known as the remainderman. After death of life tenant, the remainderman has complete bundle of rights.
7
Q
Pur Autre Vie
A
(estate in reversion/estate in remainder) - life tenant has the incomplete bundle of rights until a third party dies.
8
Q
Involuntary Life Estates
A
legal life estates or marital right. It is not possible to sell the property without the consent of the partner, or to own property in one name only.
9
Q
Dower
A
Wife’s interest in husband’s property
10
Q
Curtesy
A
Husband’s interest in a wife’s property
11
Q
Homestead
A
protection against unsecured debts for the party who did not sign for the loan.
12
Q
Vesting
A
The method in which one holds title to property
13
Q
Tenants in Common
A
Two or more people holding ownership concurrently, with the right to individually possess, will, or sell. This is undivided, but not necessarily equal interest.
14
Q
Partition Law Suit
A
One can request the courts to sell his shares of a Tenants in Common arrangement
15
Q
Joint Tenancy
A
Ends upon death of one tenant; Corporations excluded.
TIME; TITLE; INTEREST; POSSESSION;
16
Q
Encumbrance
A
Burdens or limits your title to a property
17
Q
Lien
A
document that uses a property to secure payment for a debt, or the discharge of an obligation owed
18
Q
Specific liens
A
applied to a specific piece of property and affect only that piece of property.
19
Q
General liens
A
against the person an all assets, as a result of a lawsuit
20
Q
Trust Deed
A
Makes real property collateral for a loan.
21
Q
Mortgage
A
A lien that is used to secure real property for the payment of a promissory note, or debt
22
Q
Notice of Cessation
A
should be filed when work on a project ceases for a period of 30+ days
23
Q
Not of non-responsibility
A
Should be filed by an owner within 10 days of discovering than an unauthorized person is performing construction on his property
24
Q
Special assessment
A
legal charge against real estate by a public authority to defray the cost of specific local improvements
25
Attachment
legal process by which property is seized and held, SYMBOLICALLY, until a pending judgment suit has been decided.
26
Judgment
a court decision as a result of a lawsuit, and gives the FINAL determination of the rights of the parties in the proceeding.
27
Formal Declared Homestead
the owner must complete and file a "homestead document" at the county courthouse
28
Dwelling house exemption
available to ALL valid homeowners that haven't previously filed the "homestead document" at a courthouse
29
Deficiency judgment
the total assets of the borrower are available for collection by the debt holder
30
Easement
interest in another’s land. It is not a lien, but rather, it is a RIGHT
Can be created by Implication; Reservation; Necessity Condemnation; Expressed.
arise by Express Grant; Implication of Law or By Necessity; Long Use or Prescription.
31
Appurtenant Easements
Easements for adjacent properties or neighbors.
32
Dominant vs servient party
Dominant party is a person who is benefited; Servient party is a person who is burdened by the easement.
33
Easement in Gross
An easement in gross is a legal right to use another person's land for as long as the owner owns that land or the holder of the easement dies
34
Easements by Necessity
created by a court of law. An easement by necessity would be granted to a landlocked property. An easement by implication would be when someone sells land, but retains the mineral rights.
35
Easement by Prescription
the claimant has used the land for the time period set by law. Under California law, this time period is 5 years of continuous use.
Requirements: Possession, open, actual, continuous, and hostile
36
Encroachments
unauthorized intrusion of a building or other improvement onto another person's land.
37
```
Restrictions:
Deed/Restrictive
Limiting vs affirmative
Unenforeable
Private Deed
Convenant
Condition
Public restriction
```
Deed Restrictions/Restrictive Covenants: A restriction is a use encumbrance.
Limiting restrictions: State things you can never do. Affirmative restrictions: State things you must abide by.
Unenforceable Restrictions: Any restriction that violates public policy or is discriminatory is not enforceable.
A Private Deed Restriction is a written agreement to establish controls for private land, which limit the use or occupancy of the land, and are part of a developer's plan.
A covenant is a promise by the person who accepts an agreement to do or not to do certain things.
A condition is a restriction that places a limitation on the buyer's ownership.
Public restrictions are government-imposed restrictions on a property (zoning laws, building and health codes).
38
Subrogation
The substitution of a third person in place of a creditor to whose rights the third person succeeds in relation to the debt.
39
Torrens system
A legal system of land registration used to verify ownership and encumbrances without the necessity of an additional search of the public records.
40
Contracts:
| Express, Implied, Bilateral, Unilateral, and Executed vs Executory
Express Agreement- An oral or written contract in which the parties state the contract's terms and express their intentions in words; Implied Agreement - A contract under which the agreement of the parties is demonstrated by their acts and conduct.
Bilateral- In which both parties promise to do something; Unilateral - In which one party promises to do something if the other party acts.
Executed: Everything has been done, all promises have been fulfilled, and everyone has performed under the contract; Executory: Something remains to be completed in the contract.
41
Novation
Substituting a new contract for an old one
42
Earnest money
Cash deposit that shows buyer's intention to carry out the terms of the contract
43
Counteroffer
An attempt by seller to change the term proposed by the buyer
44
Mirror image
Seller agrees to an offer exactly as it was made
45
Liquidated Damages
Amount of money and or personal property agreed upon as settlement if one party doesn't live up to the terms of the contract.
46
Option
An agreement to keep open, for a set period, an offer to sell or lease real property.
47
Equitable Title
The interest the buyer has in property between time of acceptance of contract and closing.
48
Parol Evidence Rule
prevents the admission into court of evidence of any prior or contemporaneous oral or written negotiations or agreements that vary or contradict the terms of the written contract. No oral agreements allowed!
49
Defaults
A contract is completely performed when all the terms of the contract are carried out. A contract is breached or broken when one of the parties defaults.
Only the seller can sue broker for non-performance.
If the buyer defaults, seller may declare the contract forfeited, rescind the contract and return all payments made by the buyer or sue for specific performance and compensatory damages.
50
Types of real estate contractual agreements
Listing agreements; Property management agreements; Sale Contracts; Buyer's/tenant's agency agreements; Options; Leases; Statute of Limitations; Laches.
51
Escheat
The decedent died intestate (without a will) and without heirs. The property becomes owned by the government
52
Eminent Domain
The right of the government to take private property for the good of the public and/or for NECESSARY public use.
53
Adverse Possession
(Very similar to easement by prescription.) Possession; Open; Actual; Continuous; Hostile to the owner's title.
54
Tacking on
2+ owners working together to claim adverse possession
55
Color of title
A title appears clear, but isn't. Used with adverse possession.
56
Foreclosure
happens when property is transferred by non-payment of a debt secured by real estate.
57
Testate vs intestate
Testate: Dying with a will. Intestate: Dying without a will.
58
Requirements of a will
Requirements of a will: Legal Age; Sound Mind; Proper Wording; No undue influence; Witnesses; Signed by Testator (Maker of a will).
59
Devise vs bequest
To give real estate through a will is to devise. The transfer of personal property through a will is a bequest.
60
Codicil
Amendment to a will
61
Holographic
A will written in testator's own handwriting, not legal in some states (ok in CA)
62
Nuncupative
Deathbed orally given by testator, written down by nurse, and witnessed by doctor
63
Ways to acquire or transfer property (5)
Will: Formal or witnessed; Holographic will; California Statutory; California Statutory will with trust.
Succession: Separate and community property.
Accession: Accretion; Avulsion; Addition of fixtures; Improvements made in error
Occupancy: Abandonment; Prescription; Adverse possession.
Transfer: Private or Public grant; Gift; Alienation.
64
Quiet the title lawsuit
But what if there is a problem such as a misspelling or wrong legal description? Then there is a CLOUD on the title that must be cleared up with a QUIET THE TITLE LAWSUIT.
65
Statute of frauds
A state law that requires certain contracts to be in writing and signed by the party to be charged (or held) to the agreement in order to be legally enforceable in a court of law.
66
Principal of laches
Legal doctrine used to bar a claim asserted after the passing of a statutory period of time.
67
Alienation
another term for "transfer or convey."
Alienation is a real estate term; it is the "right and evidence of ownership of the land."
A deed is a document that transfers ownership from grantor to grantee.
68
Deed vs title
Deed is NOT the title, but it is evidence of the title
69
Grantor vs grantee
The Grantor is the seller or the giver of the real estate. The Grantee is commonly known as the "Purchaser/or Receiver."
70
Basic real estate deeds
General Warranty Deed;
Covenant of Seisin, Quiet Enjoyment, Against Encumbrances, Further Assurance, Warranty Forever.
Special Warranty Deed; Bargain and Sale Deed; Quit Claim.
71
Requirements necessary for a deed to be considered VALID:
Premise: Grantor; Grantee; Accurate Legal Description.
Habendum: Consideration; Granting Clause; Habendum Clause; Designation of any limitations; Exceptions and Reservations.
Testimonium: Signature; Delivery and acceptance; Date (not a requirement).
72
Recording the deed
Deed does not need to be recorded to be valid.
If an easement is not recorded, it is valid.
Recording the Deed establishes priority and provides constructive record. Needs to be notarized (attestation).
73
Actual vs Constructive notice
Constructive Notice: information that can be obtained from the public records at the courthouse.
Actual Notice is that which is legally known, but not recorded.
74
Caveat Emptor
Let the buyer beware
75
Types of deed
Grant, Sheriff's, The Gift, Tax, Land and Trustee's Deed.
A Trust Deed is NOT a deed. Rather, it pledges real property as security for the payment of a loan. Needs to be recorded within one week after the transaction.
A Reconveyance Deed is a "deed" that is involved with the financing of real estate.
76
Deed must contain:
An acknowledgement (be notarized);
The name and address to which future tax statements may be sent;
The basis for the computation of the transfer tax;
The names of all parties to the transaction;
A complete legal description for identification of the property; and
The payment of the recording fee.
77
Basic methods of deed delivery:
Manual delivery, which is the direct transfer from the grantor to the grantee;
Delivery through recording, which is the act of putting the title of record in the grantee's name at the county recorder's office;
Conditional delivery, which mandates that a specific event happen before the title can be passed, and then the title must be passed through a third party.
78
Escrow
the process in which a neutral third party, for a fee, acts as the closing agent for the buyer and seller.
There must be a binding contract between buyer (grantee) and the seller (grantor), the conditional delivery of transfer instruments and funds to a neutral third party.
79
Escrow holder
Banks, title insurance companies, and attorneys do NOT need to obtain special licenses to act as escrow holders (individuals cannot be escrow holders).
The buyer and seller must negotiate to choose which escrow company they wish to use. Keep in mind that this decision must not be made by either party's real estate agent. In addition, if one of the agents in the transaction has financial interest in an escrow company, this fact must be disclosed to both the buyer and seller prior to a final decision being made.
After the escrow company is chosen, who should pay the fee? This decision, too, is negotiable between the buyer and seller. As with several escrow practices in California, the payment of the escrow fee varies depending on the geographical location within the state. In some areas, the buyer or the seller pays, and in other areas, both parties share the cost.
80
Escrow procedures
Prepare the escrow instructions.
Order the preliminary title search and report.
Request the lender's demand, including any amount owed, and the pay-off statement.
Request for new loan instructions and documents.
Accept Structural Pest Control Report and Other Reports.
Accept Fire Insurance Policies and Complete Settlement.
Request Closing Funds.
Audit File.
Order Recording.
Close Escrow by preparing settlement statements for buyer and seller; disbursing all funds and delivering documents to the appropriate party or parties.
81
Proration
the process in which expenses, are divided proportionately between the buyer and seller. All escrow companies use 30 days as a base month in figuring out proration, but any date may be used if all parties to the transaction agree.
82
CA county fiscal year
July 1 to June 30
83
SoCal vs NorCal
In Southern California,
The bilateral escrow instructions are signed by the buyer and seller shortly after they've signed their purchase agreement, just after the start of escrow.
The escrow services are usually performed by independent escrow companies or financial institutions.
The escrow service fees are usually split 50-50 between the buyer and the seller.
In Northern California,
The escrow instructionsare usually not signed until one or two days just before the close of escrow.
The escrow services are usually performed by title insurance companiesthat have extensive escrow departments and many branch offices.
The escrow service fees are usually paid by the buyer.
84
Estate For Years
definite beginning and ending date
85
Estate from Period to Period
periodic tenancy
86
Estate at Will
stay without a lease
87
Estate at Sufferance
tenant must be evicted through the court
88
Actual vs Constructive Eviction
Actual Eviction: landlord's remedy to regain possession of property; Constructive Eviction: tenant must vacate the property, send notice to the landlord, and put the rent money in escrow.
89
Escalator Clause
the parties agree to an adjustment of rent based on set increases in taxes, insurance, maintenance, and other operating costs
90
Non-disturbance Clause
requires that tenants cannot be disturbed if the property is foreclosed upon.
91
Economic Rent
the rental income that real estate can command in an open market at any given time.
92
California Statute of Frauds:
A lease for more than one year MUST be in writing.
While a verbal lease of greater than one year IS valid, it is NOT ENFORCEABLE under the law.
IF a lease is written, then it MUST be signed by the lessor.
Both the lessee and lessor must be legally capable of making a contract (lease).
93
Lease minimum requirements
State the length or duration of the lease.
Include the amount of rent and the date on which it is to be paid.
Contain the names of the parties.
Include a sufficient description of the property.
Give evidence of both the landlord's and the tenant's intent to create a landlord-tenant relationship.
94
Security deposit requirements
Security deposits CANNOT be labeled as "nonrefundable."
The maximum allowed security deposits for residential properties (in addition to first month's rent) are:
For an unfurnished rental, 2 months' rent; for a furnished rental, 3 months' rent.
Statement of property condition: inspection report that states the condition of the property upon the tenant's moving in and moving out of the property.
If there is NO damage or cleaning required to the vacated property, then the landlord has a maximum of 21 days from the date of the tenant vacating the property to refund the security (and "cleaning") deposits.
95
Landlord's rights and responsibilities (6)
Implied right of habitability: guaranteeing that the property meets the minimum health and housing codes.
Ensuring that the property's common areas are safe.
Respect the tenant's use and quiet enjoyment of the property,as long as the tenant is following the terms of the lease.
Live by federal and state fair housing laws.
Allowed to terminate a month-to-month rental agreement (WITHOUT a reason or violation by the tenant) by serving a previous notice.
Right to inspect a property periodically, but must follow specific guidelines when doing so.
96
Tenants rights and responsibilities (4)
NOT damage the property.
Give at least 30 days' notice prior to vacating the property.
Tenants must not interfere with the rights of other tenants.
Keep the premises clean and sanitary.
97
Rental offset
the tenant can spend up to one month's rent in repairs
