Ownership & Title Flashcards
1
Q
Estate in Severalty
Sole Ownership
A
- owned by an individual
- upon death, prop goes to heirs (intestate) or devisees (had a will)
- legal entity can own (ex. corp., partnership, trust, REIT - syndication)
- in LLC, partner’s liability is equal to their share or amount invested
- sale of interest may require securities license
2
Q
Concurrent (Multiple) Ownership
A
- two or more persons have an undivided interest, factional but undivided, with equal rights to possession; no one person owns any particular part of the whole (or land in this case)
3
Q
Tenancy in Common
A
- co-ownership w/o any right to survivorship to other owners; it’s the default for Texas (unless specified in deed differently)
- shares can be unequal
- upon death, interest goes to heirs/devisees
- subject to probate
- each tenant responsible for taxes as individual or group
- Partition Lawsuit can divide property
4
Q
Joint Tenancy
A
- co-ownership WITH right of survivorship to other owners; surviving tenants to absorb dead tenants shares & liens dissolve
- deed must specify JT; if missing, defaults to TIC
- Shares must be equal
- upon death, interests go to co-owners w/o going through probate
- overrides a will
- death cert & JT affidavit must be recorded
- 4 entities: PITT (posession, interest, title, & time)
- Partition Lawsuit can divide prop among co-owners
5
Q
Tenancy by the Entirety
A
- exculsive to married couples (some states)
- community property rights effect property rights during marriage by spouses & after marriage.
- prop owned jointly is distinguished from each spouse’s seperate property
- generally, any prop acquired during marriage is considered community property
6
Q
Common Interest Community Ownership
Definition & Types
A
- often regulated by state’s common interest ownership act
- can levy mandatory assessments on it’s owners (HOA)
- seller’s have disclosure requirements to buyers related to the sale of
- TYPES:
- Condo, Townhouse, Cooperative, Time-Share
7
Q
Condominium
A
- cubes of air; hold freehold estate in the unit and a tenancy in common in the common elements (used by all: pool, hallway, elevator, tennis court, etc.)
- may be any type of real estate, residential/commercial (office bldg, parking lots, etc.)
- created by recorded declaration describing legal and physical structure & any restrictions for use.
- describes any party walls
- specifies common elements
- specifies any limited common elements (reserved for use of one or more with exclusion to other units; assigned parking, balconies, storage)
- each owner member of HOA
- seperate title and taxation
- unit w/common elements % is seperate parcel
- taxed as one parcel; HOA fees + Prop Taxes
- owners own and finance their own unit
- sellers required to give full disclosure (especially the budget)
8
Q
HOA role in Condominium
A
- manages common elements & pays taxes HOA owes
- adopts rules, regs, & budget
- adopts & amends bylaws
- imposes & collects assessments (creates a foreclosable lien on the unit)
- holds annual meetings
- maintains insurance on common elements, not the seperate units themselves
9
Q
Town House
(Condo Twin, just more grounded)
A
- similar in ownership rights to condo & establishment of the HOA
- generally, includes land under and around the unit
10
Q
Cooperative
A
- all tenants for corporation to buy & own property; entity will allow owners (stockholders) occupany; you do not own the unit, the corp does.
- tenant’s association owns the real estate
- buyer is member of association, share holder, and has proprietary lease (No deed, no ownership; own shares of the corporations stock)
- stockholder/tenant pays assessment/assoc. fees
- like a condo, but no deed
11
Q
Time-Share
(Think resort properties…)
A
- buyer gets interest in real estate & right to use for a certain period of time.
- purchasers or developer may own the land and contract for it’s use
- sale of time-share/condo with a mandatory rental pool agreemnt may require securities license seperate from RE license
12
Q
Alienation
3 ways to do this…
A
- the act of conveying/transferring ownership of real property
- Private Grant (from indiv. using deed)
- Public Grant (from gov’t to indiv. using land patent)
- Dedication (from indiv. to gov’t)
13
Q
Deeds
Characterisitics & Need-to-Knows
A
- instrument that transfers bundle of rights/whatever interest held by grantor to a new owner (grantee), but does NOT prove ownership
- only conveys real property
- voluntary alienation
- sellers required to provide written deed, never oral.
- differences in deeds lie in extent of promises made by grantor to grantee
- does not have to be recorded to transfer
- title passes upon acceptance of the grantee
14
Q
7 Essential Elements of a Deed
A
- Competent Grantor: 18, sane, and sober
- Execution (signature) by the grantor(s)
- Identifiable grantee
- Delivery to and acceptance by the grantee
- Legal Description of the land
- describes only the land; appurtenances presumed to transfer with the land unless specified otherwise
- Consideration: money or something of value; “one dollar and other good and valuable consideration”
- Words of Converyance (granting clause): says grantor voluntarily gives to grantee(s)
- Habendum Clause: conveys freehold estate
15
Q
General Warranty Deed
A
- General Warranty Deed
- most promises/covenants
- best protection for grantee
- 5 covenants & warranties of title:
- Covenant of seisin
- Covenant of quiet enjoyment (undisturbed)
- Covenant against encumbrances
- Covenant of further assurance
- Warranty forever; guaruntee of defense of title
16
Q
Special/Limited Warranty Deed
A
- Special/Limited Warranty Deed
- warranty that grantor received title
- warranty that property was unencumbered by grantor
- A.K.A. Grant Deeds
17
Q
Quitclaim Deed
A
- used primarily to convey less than fee simple or to cure a title defect
- best for grantor; least amount of liabilities
- no covenants or warranties
- problem solver; used to clear clouds on titles
18
Q
Bargain & Sale Deed
Trustee/Sherriff’s Deed/Certificate of Sale
Reconveyance Deed
A
- B&S DEED: implicatioon that grantor holds title and possession
- does not warrant against liens or encumbrances
- warrants grantor’s right to convey title
- T/S DEED: transfers title at the end of a foreclosure proceeding or statutory redemption period; by law, to pay lenders
- RECON DEED: used when borrower pays off a loan secured by a deed of trust; used by trustee to return title of trustor.
19
Q
Conveyance After Death
Probate, Testate, & Intestate Succession
A
Dates back to Old England; a will transfers personal property after death & a testament transfers real property after death.
- probate: process of distributing all assests of decesaed.
- wills must go through probate before devisee to receive real property.
- testate: transfer by will
- Devise - act of transferring deceased person’s interest in real estate to another (DEED = REAL PROPERTY)
- Beqquest - act of transferring deceased person’s interest in personal property to another (BILL OF SALE = PERSONAL PROPERTY)
- Intestate Succession: no will; state will write will for you
- heirs determined by state laws of descent; cannot be an heir until someone has passed.
20
Q
Involuntary Alienation
Other ways of aquiring rights
A
- law presumes owners will regularly inspect property
- rights could be lost if owners do not inspect, even if they do not live in town
- a quiet title action is needed in order to obtain title for possession
- owners who grant permission for another’s use (acknowledging possession) do not fall under this
21
Q
Adverse Possession
A
- ownership recognized by the court after Open, Continuous, Exclusive, Actual, & Notorious/Hostile (OCEAN) possession of another’s land for a certain period of time set by state law
22
Q
Easement by Prescription/Prescriptive Easement
A
- easement recognized by court after OCEAN use of another’s land for a certain period set by state law.
OCEAN: Open, Continuous, Exclusive, Actual, & Notorious/Hostile
23
Q
Seller’s Disclosure
(What does it cover?)
A
- could be form or list depending on state & covers:
- land/soil & environmental conditions (material fact/decision making fact)
- structural issues & condition of fixtures
- lot size, encroachments, easements, & so on
- all material defects
- seller’s complete to the best of their current knowledge
- must disclose latent and visible material defects (facts)
- state laws determine when buyer should receive
- buyers can rescind contract should it be proven the seller or seller’s broker knew about a material fact and did not disclose it
24
Q
Seller’s Disclosure
Broker Requirements & Responsibilities
A
- must visually inspect the property
- disclose all material defects found, even if seller is not aware
- request that the seller dislcose any laten defects
- upon discovery of any defects, immediately disclose to all parties involved (buyer, buyer’s agent, and seller)
- suggest a property inspection; give options for property inspector
- seller would be held responsible for any misrepresentation if seller withheld information on a defect from the broker
25
Q
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