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Real Estate Licence - Study > Section 2 - Real Estate Title and Ownership > Flashcards

Section 2 - Real Estate Title and Ownership Flashcards

1
Q

What is Title?

A

The RIGHT2 or OWNERSHIP of LAND.

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2
Q

What RIGHTS does OWNERSHIP include?

A

DEEP-C

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3
Q

Title may be held as …

PIJTCP

A 
Partnership
Individually
Jointly
Trust
Corporation
Partnership
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4
Q

“Title” also refers to a _____.

A

DEED (evidence of ownership of land)

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5
Q

What is Alienation of Title?

A

Transferring Ownership RIGHTS or INTERSESTS in Real Property from one person to another.

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6
Q

What are the 3 BASIC TYPES OF TITLE?

BEL

A

BARE LEGAL
EQUITABLE
LEGAL

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7
Q

What is LEGAL TITLE

DEEP-C

A

DEEP-C

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8
Q

Equitable Title?

A

A SALES CONTRACT or CONTRACT FOR A DEED that gives ownership of a property on a future date.

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9
Q

Can the EQUITABLE INTEREST/TITLE be passed on to a buyer’s heirs after they die?

A

YES

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10
Q

What are the ways EQUITABLE INTEREST/TITLE can be passed on or TRANSFERRED?
(SAM)

A

They can be
SOLD
ASSIGNED
MORTGAGED

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11
Q

What is Bare Legal Title (NAKED TITLE)?

A

Title that grants ownership but WITHOUT the usual rights and privileges that come with ownership, like DEEP-C.

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12
Q

Who would be an example of a NAKED TITLE Holder?

A

A trustee who holds Naked Title because the homeowner borrowed against their house. The Trustee holds the TITLE but the borrower still enjoys the rights/privileges.

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13
Q

REAL ESTATE NOTICE

A

Putting the world “on record” as to the ownership of real property.

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14
Q

What are the 3 kinds of Real Estate Notice?

CIA

A

Constructive/Legal Notice
Inquiry Notice
Actual Notice

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15
Q

Actual Notice

A

A person has SEEN or BEEN GIVEN actual information or documents.

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16
Q

What are examples of ACTUAL NOTICE?

SIS

A

Searching Public Record
Inspecting the Property
Shown a legal TITLE document

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17
Q

Constructive/Legal Notice

A

When one gives Constructive/Legal Notice, they have made public their ownership rights and the public now has the responsibility of looking into the public records to find out who has ownership or interest in the property.

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18
Q

Inquiry Notice

A

A Legal Notice that says that if factors exist on a property that would make a reasonable person inquire further - then you should inquire further. For example, if you see a trail going through a property…you would be expected to INQUIRE whether that trail is actually an EASEMENT

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19
Q

What are TITLE RECORDS?

A

They are all documents affecting title, interests and rights to real property and are maintained in every city and county in the US.

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20
Q

Where are TITLE RECORDS typically located?

A

They are typically located with the County Clerk’s office at the City or County courthouse.

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21
Q

Are TITLE RECORDS open to the public for inspection?

A

Yes

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22
Q

Are TITLE RECORDS required to be written up and recorded according to the laws of the same state that the land is located in?

A

Yes

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23
Q

What kinds of records do TITLE RECORDS include?

ZOD) (MLP

A 
Zoning
Ordinances
Deeds
Mortgages
Liens
Permits
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24
Q

What is ACKNOWLEDGEMENT?

A

A formal declaration made by a person who has signed a document in front of an authorized officer - usually a Notary Public.

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25
Q

Is it TRUE that Under the recording acts, ALL DOCUMENTS affecting any RIGHTS, ESTATE, TITLE OR INTEREST in LAND, (DEEDS, MORTGAGES, LIENS, etc) must be recorded in the city or county where the land is located so that this information is available to anyone?

A

YES

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26
Q

This LOCAL PUBLIC RECORD is for the protection of:

A

Real Estate Property Owners
Prospective Buyers
General Public
Interested Creditors

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27
Q

Once made public, it then becomes the responsibility of ______ to examine the public record to find out the state of the Title to a particular parcel of land

A

Any Interested Party

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28
Q

What is a TITLE EXAMINATION?

A

When a SELLER is UNDER CONTRACT of Sale, they are required to deliver a title that is FREE FROM REASONABLE DOUBT as to who the owner is.

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29
Q

What is a MARKETABLE TITLE

A

A Free/Clear Title

30
Q

Does the REQUIREMENT of a MARKETABLE TITLE need to be written into a SALES CONTRACT?

A

NO. It is implied in the law, so it doesn’t need to be stated in the CONTRACT.

31
Q

Is it TRUE that sometimes the buyer will insert a provision into a contract that specifically states that the seller shall deliver title FREE FROM ALL DEFECTS OR ENCUMBRANCES, anyway?

A

YES.

32
Q

Can a BUYER still reject the TITLE due to even a small, insignificant encroachment or defect?

A

YES.

33
Q

What is an ENCUMBRANCE?

A

A legal right or interest held by another that reduces the value of one’s property.

34
Q

What are some examples of ENCUMBRANCES?

A 
Lien
Mortgage
Lease
Easements
Encroachments, etc
35
Q

How does one determine that a TITLE is MARKETABLE?

A

With a Title Search

36
Q

What is a TITLE SEARCH?

A

An examination of the public records.

37
Q

How far back does a TITLE SEARCHER begin their search?

A

Usually back to the ORIGINAL SOURCE of Title or 40-60 years back, depending on local norms.

38
Q

What is the PURPOSE of a Title Search?

A

To see if there are any defects in the CHAIN OF TITLE

39
Q

What is a CHAIN OF TITLE?

A

A History of Ownership - both RECORDED and UNRECORDED. Each owner is a LINK in the chain. If a LINK is missing, a gap in the chain exists and there is a CLOUD on the Title.

40
Q

What is a CLOUD on a title?

A

Any document, claim, unreleased lien, or encumbrance that might invalidate or impair a title to real property or make the title doubtful.

41
Q

How is a CLOUD on a title usually discuovered?

A

A Title Search

42
Q

How is a CLOUD removed? (QCD or S2QT)

A

A QUITCLAIM DEED or SUIT TO QUIET TITLE.

43
Q

If there is a CLOUD, can the Owner convey a MARKETABLE TITLE?

A

NO.

44
Q

Are all CLOUDS serious?

A

NO. Some are serious and others are not.

45
Q

What is the result of a successful QUITCLAIM DEED or SUIT TO QUITE TITLE?

A

To LEGALLY RECOGNIZE those with a genuine right of title and to QUIET those without a genuine interest or right to the TITLE.

46
Q

What is an ABSTRACT OF TITLE?

A

An ABSTRACT OF TITLE is a detailed report that summarizes what the the title searcher found in the public record.

47
Q

What kinds of reports does the ABSTRACT OF TITLE INCLUDE?

A 
Historical Summary of all 
GRANTS
CONVEYANCES
WILLS
JUDICIAL PROCEEDINGS
RECORDED LIENS
ENCUMBRANCES
48
Q

Do ABSTRACTORS render opinions on the condition of the title?

A

NO. Nor do they guarantee the MARKETABILITY of the Title.

49
Q

Are ABSTRACTORS licensed?

A

Yes they are.

50
Q

Once the Abstract is complete, what happens next?

A

It (The Abstract) is sent to a Title Examiner (Title Company, Licensed Abstractor or Attorney) who renders an opinion as to the STATUS OF OWNERSHIP.

51
Q

What is a CERTIFICATE OF TITLE?

A

The SIGNED, WRITTEN OPINION that states the ownership of a piece of REAL PROPERTY.

52
Q

Does a CERT OF TITLE list all previous owners of the property?

A

NO. It usually only identifies the present owner and lists on ly EXISTING encumbrances

53
Q

Who issues TITLE INSURANCE?

A

Usually the same company that issues the CERT OF TITLE?

54
Q

What does TITLE INSURANCE do?

A

It insures the property owner against losses that come up due to title defects (forged documents, undisclosed heirs, misfiled documents, etc).

55
Q

When is TITLE INSURANCE usually issued?

A

After the Title Company does its investigation and feels that it has an INSURABLE TITLE.

56
Q

Does a TITLE INSURANCE Policy cover everything?

A

NO. They usually include a list of exclusions - things they don’t cover - like UNRECORDED EASEMENTS, FACTS, revealed in an Accurate Survey, Taxes not yet due, ZONING and GOV’T RESTRICTIONS.

57
Q

Do TITLE COMPANIES require RECENT SURVEYS?

A

YES.

58
Q

COLOR OF TITLE / TACKING

A

When a TITLE appears to be valid, but a defect is actually present and renders the Title INVALID.

59
Q

Is there a way to go from a COLOR OF TITLE Deed to a LEGAL TITLE?

A

YES. If the purchaser OCCUPIES the property in GOOD FAITH for a period of time PRESCRIBED BY STATE LAW, and does not receive any legal challenge to his ownership rights, the PURCHASER can apply to the court for a CLEAR TITLE under ADVERSE POSSESSION

60
Q

What is TACKING?

A

When an ADVERSE OCCUPANT TACKS ON his/her PERIOD (years) OF POSSESSION to a PRIOR ADVERSE OCCUPANT’S Years of Possession. This will get the second occupant closer to the end of the Good Faith Period - previously assigned by the State.

61
Q

Can a CURRENT ADVERSE OCCUPANT sell their CLAIM to a property to another ADVERSE OCCUPANT?

A

YES. And the new owner can TACK ON the previous owner’s Years of Possession to their own Years of Ownership/Possession - getting them closer to the end of the GOOD FAITH PERIOD designated by the State.
court.

62
Q

Is the new ADVERSE OCCUPANT receiving a clean title from the previous ADVERSE OCCUPANT?

A

NO. The Original ADVERSE OCCUPANT did not deliver a good, marketable title to the next ADVERSE OCCUPANT. That OCCUPANT instead, bought a claim to a possible, future CLEAR TITLE.

63
Q

What is the TORRENS SYSTEM?

A

A legal system that provides for the REGISTRATION of LAND - to verify ownership.

64
Q

Is a TORRENS REGISTERED certificate of title the same as a Certificate of Title of Opinion of Title issued by a PRIVATE Title Examiner.

A

NO.

65
Q

How does TORRENS SYSTEM work?

A

An owner petitions the STATE COURT to register his property. After a TITLE SEARCH and a PUBLIC HEARING, if everything is in order, the COURT will issue a TORRENS REGISTERED CERT OF TITLE.

66
Q

Why use the TORRENS SYSTEM?

A

It’s one way to establish clear title. Once property is TORRENS REGISTERED, the Title, encumbrances cannot be enforced against the property unless the encumbrance is registered and noted on the REGISTERED CERT OF TITLE.

67
Q

TITLE just means…

A

Ownership

68
Q

LEGAL TITLE is…

A

OWNERSHIP with right of possession or use

69
Q

EQUITABLE TITLE is…

A

The RIGHT to LEGAL TITLE upon completion of a contract.

70
Q

BARE LEGAL TITLE is…

A

OWNERSHIP without right of possession or use.

Real Estate Licence - Study (12 decks)

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