Titles

Question 1

What approach is to be used when dealing with Title issues?

Answer 1

Take potential claimants in chronological order and establish their claims to the property, then take subsequent claimants and see if they can take title away via:

1. Adverse possession;
2. Land-Sale contract; or
3. Conveyance.

Question 2

What is required of adverse possession?

Answer 2

Physical Component:

1. Open, visible, and notorious - Must be sufficient to put the true owner on reasonable notice_;
2. Actual - Physical presence; or color of title;
3. Exclusive - Not shared with another;

Mental Component:
4. Hostile - Claim of right, as your own; or color of title, believing one has good title, permission will destroy hostile intent, mistake encroachment is sufficient for hostile intent. In some states, the payment of taxes is required to prove hostile intent; and

Time Component:
5. Continuous - It is a question of fact to be determined based on nature of the land and the use of the land. Common law period is 20 years. Tacking is allowed if one adverse possessor transfer to another.

Oklahoma RP Distinction - The payment of property taxes is one means whereby a claim of ownership is asserted; the failure to pay property taxes weakens a claim of ownership by adverse possession.

The requisite time period for adverse possession in Oklahoma is 15 years.

Question 3

Can one adverse possess a co-tenant’s interest?

Answer 3

This is harder to do. The only way to do is by ousting the co-tenant.

Question 4

What does the adverse possessor obtain?

Answer 4

An adverse possessor only claims that portion of the land that he actually occupied unless the adverse possessor enters under color of title and occupies a significant portion. This is a question of fact

Adverse possessor only gets whatever the true owner has.

Adverse possessor cannot obtain mineral rights if they were previously severed.

Oklahoma RP Distinction - Where the title to mineral rights has been severed from the title to the surface, possession of the surface by its owner is not adverse to the owner of the minerals below it. to acquire title to the mineral rights by adverse possession in such circumstances, the owner of the surface estate or some other person must take actual possession of the minerals by opening and operating mines for the statutory period.

Adverse possessor cannot obtain future interests until they become presently possessory.

Question 5

When is adverse possession tolled?

Answer 5

Tolling means that the statutory period will not run. Disability will toll (suspend) the running of the statute of limitations. Tolling will only occur if the disability exists at the time the adverse possession starts.

Disability is:

1. Infancy;
2. Legal incompetence; and
3. Imprisonment.

Question 6

What are the rights of the adverse possessor and true owner?

Answer 6

Until the statutory period has run, the true owner may eject the adverse possessor and collect damages.

As of the time the statutory period has run, the adverse possessor’s ownership relates back (relation back doctrine) to the start of the adverse possession.

During the statutory period, the adverse possessor is the owner against the entire rest of the world other than the true owner.

Question 7

What is the first requirement for a valid conveyance?

Answer 7

Intent.

The grantor must intend to transfer an interest immediately to the grantee.

Question 8

What is the second requirement for a valid conveyance?

Answer 8

Delivery of the deed.

1. Give the deed to the grantee - This creates a rebuttable presumption of delivery. It can be rebutted with extrinsic evidence showing no intent to presently transfer;
2. Retain the deed - This creates a rebuttable presumption of delivery. It can be rebutted with extrinsic evidence that shows that delivery was intended; and
3. Give the deed to a third party - Upon deliver to grantee, apply the relation back doctrine. If a condition is set, then apply relation back doctrine. If too many conditions, then more likely to fail. Condition of death, then transfer of life estate to themselves, with remainder to grantee.

Question 9

What is the third requirement for a valid conveyance?

Answer 9

Acceptance.

It is presumed if the conveyance is beneficial to the grantee.

Question 10

Does the statute of frauds apply for a valid conveyance?

Answer 10

Must be in writing (Statute of Frauds). The writing must:

1. Sufficiently identify the parties;
2. Show intent to make a present transfer;
3. Sufficiently describe the property; and
4. Have Grantor’s signature.

Oklahoma RP Distinction - Oklahoma does not require a subscribing witness for the validity of any deed, mortgage, contract, lease, bond, or other instrument conveying, affecting, or relating to real property.

No acknowledgement or recording is necessary for the validity of any deed, mortgage, or contract relating to the real estate as between the parties thereto.

Question 11

What happens if the seller dies before closing?

Answer 11

If there is a sales contract, the personal representative of the decedent must complete the transaction. The money goes to the beneficiary of the personal property.

Question 12

What happens in the case of the inheritance of real property?

Answer 12

1. If a gift of real estate described specifically in a will is not in the testator’s estate at the time of his death, the gift is adeemed by extinction, and the beneficiary takes nothing.
2. If a gift of real estate was made during the testator’s lifetime, but the spe-cific property is still mentioned in the will, the gift is adeemed by satisfac-tion because the beneficiary has already received it.
3. If a gift of real estate was made during the testator’s lifetime, but a general devise is in the will (e.g., “one-third of my estate”), then the real estate al-ready received will not be adeemed by satisfaction unless:
   (a) the will provides for deducting the gift;
   (b) the testator, in writing, declared that the gift was part of the general de-vise; or
   (c) the devisee, in writing, acknowledged that the gift was part of the gen-eral devise.

Question 13

What is Exoneration?

Answer 13

Real property inherited under a will is taken subject to all outstanding liens and mortgages. The estate does not pay them off.

Question 14

What is lapse?

Answer 14

Common Law Rule: If a beneficiary predeceases a decedent, any gift to the beneficiary fails

Many states now have anti-lapse statutes so that the beneficiary’s heirs can “stand in his shoes” and accept the inheritance.

A will may also contain alternate instructions in the event that a beneficiary is not alive at the time of the testator’s death.

Question 15

What is recordation?

Answer 15

Recordation is not required to validate the transfer of title. However, it is important against parties who also claim that the owner conveyed title.

There is a strong presumption that “first in time, first in right”.

Recording acts protect subsequent purchasers.

Title based on adverse possession cannot be recorded. An adverse possessor must take action to quiet title.

Question 16

What are the types of recording statutes?

Answer 16

1. Race statute - Who records first prevails.
2. Notice statute - An unrecorded conveyance or other instrument is invalid as against a subsequent bona fide purchaser for value (more than nominal) and without notice (actual, constructive, or inquiry).
3. Race-Notice statute - An unrecorded conveyance or other instrument is invalid against a subsequent bona fide purchaser for value and without notice, who records first.

Oklahoma RP Distinction - Oklahoma has a notice recording statute.

Question 17

What are the two types of Indexes for conveyances?

Answer 17

Tract Index (Minority)
A legal description of the tract of land followed by a chronological listing of all conveyances involving that piece of land.

Oklahoma RP Distinction - Oklahoma is a tract index jurisdiction.

Oklahoma uses the Public Land Survey System, also known as the Rectangular Survey System. In this system, land is divided into parcels called townships, which are then subdivided into sections. Each township consist of 36 sections, and measures six miles N to S from a certain baseline. Each section is roughly 1 square mile, or 640 acres. Sections are further divided into half sections, quarter sections, half of a quarter sections, and quarter of a quarter sections. A half section is a half square mile, or 320 acres. A quarter section is a quarter square mile, or 160 acres. A half of a quarter section is a eighth square mile, or 80 acres. A quarter of a quarter section is a sixteenth square mile, or 40 acres.

Grantor-Grantee Index (Majority)
Two sets of books, arranged by the name of the grantor then by the name of the grantee.

Question 18

What is a wild deed?

Answer 18

A deed which exists outside the chain of title.

Even if recorded, they do not impart constructive notice.

Question 19

What is Estoppel by Deed?

Answer 19

Applies to a situation where someone transfers title to property that they do not have, but then later acquires.

Majority - Grantor transfers title to property he doesn’t own at the time, but he later acquires title to it. If previous grantee goes into court and asserts his claim to property, grantor is estopped from denying it to him. Previous grantee has to go to court to assert title.

Minority - Employ the operation-of-law theory – title automatically passes by operation of law to grantee. On June 1, automatically passes to X, while C loses in a race jurisdiction or a race-notice jurisdiction.

Oklahoma RP Distinction - Oklahoma recognizes the doctrine of estoppel by deed, which provides that if a grantor purports to convey an estate in property that he does not own, his subsequent acquisition of title to the property will automatically inure to the benefit of the grantee.

Question 20

What is the shelter rule?

Answer 20

This provides protection for a subsequent puchaser who does not satisfy the applicable recording statute.

A person who is a successor in interest to a person protected by the recording statute is also protected.

It does not apply if 1. a person attempts to wash his deed by conveying a third person then take a reconveyance, or 2. commits fraud in respect to the deed.

Question 21

What is title insurance?

Answer 21

Title insurance can be purchased at the time of closing by the buyer, so that if there is a defect in the chain of title, an unexpected encumbrance (e.g., undiscovered federal income tax lien on the property), or other similar problem, the buyer can make a claim under the insurance policy.

Oklahoma RP Distinction - Oklahoma’s Marketable Record Title Act provides that a marketable record title exists where:

1. a person has an unbroken chain of title of record extending back at least 30 years; and
2. nothing appears of record purporting to divest such person of title.

Question 22

What is the legal effect of a forged deed?

Answer 22

Forged deeds are void.

Question 23

What is Oklahoma’s Reformation of a Deed?

Answer 23

Under Oklahoma’s Nonjudicial Marketable Title Procedures Act, reformation of a deed is sought by requesting a curative instrument or corrective action from a party who has an adverse interest in the property. The party requesting the corrective action requests that the instrument from the adverse party, who must prepare it within 30 days. Upon failure to execute it, an action may be brought to quiet title.

If the party seeking quiet title prevails, the court may award costs and attorneys’ fees in addition to reasonable damages if:

1. Judgment could have been accomplished through the execution and delivery of a curative instrument or corrective action; and
2. the adverse party failed to comply without reasonable cause.