Unit 6 Flashcards
Give some examples of when one might own equitable title rather than legal title.
The buyer, during the period of contract contingency; a mortgagee who has the right to execute a strict foreclosure of the mortgage property (in a lien-theory state); a mortgagor (borrower) in a title-theory state; the buyer under a contract for deed purchase until the contract is fulfilled; the holder of an option to buy.
Why is “notice” important in determining who holds title to real estate?
Ownership is a function of evidence. The best evidence is a combination of actual and constructive notice. Actual = direct knowledge; constructive = “could-have-should-have-known” knowledge (especially, public records).
What is the function of a deed?
The deed is a transaction document, not an ownership document. It conveys title, when properly delivered and accepted (and registered, in Torrens counties), then ceases to have any transfer function except as evidence that a conveyance occurred, and as evidence of the warrants the conveyor made.
What is the difference between a bargain and sale deed and a general warranty deed?
A bargain and sale deed covenants valid title but may not warrant against encumbrances or promise to defend against claims. A general warranty deed is a bargain and sale deed that includes assurances of valid title, no encumbrances, and willingness to defend against all claims.
Describe the four types of will.
Witnessed—written, two witnesses; holographic-handwritten or typed, signed by testator; approved-on a pre-printed form approved by the state; nuncupative-written by a witness from testator’s oral statement; generally not valid for real estate transfer.
What happens to Joe’s real estate in your state if Joe dies leaving:
a) a wife, children, and a will;
b) a wife and children, but no will;
c) no legal heirs, and no will?
In general, a) after all claims have been satisfied (including those of legal life estates), the estate goes to the heirs according to the will; b) after all claims have been satisfied (including life estates), the estate goes to the heirs according to the state’s laws of descent and distribution; c) after all claims have been satisfied (here, there can be no life estate), the estate goes to the state by escheat.
What are the conditions necessary for an involuntary transfer by adverse possession to occur?
The adverse possessor must show: a claim of right; possession without concealment; possession without consent; possession for a statutory period; possibly, payment of taxes.
List the important reasons for creating and maintaining title records.
Maintain chain of title by listing previous owners and encumbrances; avoid ownership disputes; give notice of who owns the property and who has claims against it; reveal the marketability of the title; give notice of liens and establish lien priority.
Describe the four principal forms of title evidence.
a. Torrens certificate—a type of title certificate that also acts as a deed of conveyance; title and encumbrances are recorded on the certificate.
b. title insurance policy—an insurance policy indemnifying the policy holder against losses from title defects; the insurer’s “guaranty.”
c. attorney’s opinion of abstract—a written statement from an attorney stating an opinion of marketability based on examination of the title abstract.
d. title certificate—a statement of the condition of title as of the date of the certificate.
Someone who possesses all ownership interests owns _____ to the property
legal title
____ is the right to obtain legal title to a property in accordance with a contract between the legal owner and a buyer.
Equitable title
Receiving ___notice means learning something through direct experience or communication.
actual
_____ notice, or legal notice, is knowledge of a fact that a person could have or should have obtained - recordation of ownership documents in public records (title records).
Constructive
Transfer of title
when the transfer uses a written instrument, the transfer is a conveyance.
Voluntary alienation
public/private grant. A living owner makes a private grant by means of a deed of conveyance. A private grant that occurs when the owner dies is a transfer by will.
Involuntary alienation
without the owner’s consent. Occurs by the processes of descent and distribution, escheat, foreclosure, eminent domain, adverse possession, and estoppel.
It is necessary for the deed to be ___________________ by the grantee for title to pass.
delivered to and accepted
___ clauses describe the details of the transfer
Conveyance
____ clauses present the grantor’s assurances to the grantee.
Covenant
Statutory deeds
the covenants are defined in law and do not need to be fully stated in the deed.
Bargain and sale deed
“I own, but won’t defend.”
General warranty deed
“I own and will defend.”
Special warranty deed
“I own and will defend against my acts only.”
Quitclaim deed
“I may or may not own, and I won’t defend.”
A _______ deed is one tailored to the requirements of specific parties, properties, and purposes.
special-purpose
State law usually requires payment of a documentary stamp ___ on a conveyance of real property
tax
____ include transfers within the immediate family or between government entities.
Exemptions
A ____________ takes effect only after the testator’s death.
last will and testament
Amendatory -
can be changed at any time during the maker’s lifetime.
Commonly, the testator names an ____, or _______, to oversee the settlement of the estate. If a minor is involved, the testator may identify a ____ to handle legal affairs on behalf of the minor.
executor, ; personal representative ;guardian
Types of will
Witnessed
Holographic
Approved
Nuncupative
Validity
Testator be of legal age and mentally competent.
Testator indicate that the will is the “last will and testament”.
The will be signed.
Completion of the will be witnessed and signed by the witnesses.
The will be completed voluntarily, without duress or coercion.
A ____ settles a decedent’s estate, whether the person has died ___ (having left a valid will) or ___..
probate;testate;intestate
If the will does not name an executor, the court will appoint an ____ to fulfill this role.
administrator
Possible channels of probate deliberation, depending on whether there is a will and heirs
: testate proceeding, intestate with heirs, and intestate without heirs.
Laws of descent
involuntary alienation occurs when a title-holder dies without a valid will
Property that has been ___ for a statutory period may escheat to the state or county.
abandoned
A property owner who fails to fulfill loan obligations or pay taxes may lose an estate through ___
foreclosure.
Various government and public entities can transfer private property to the public sphere by the power of ____
eminent domain.
An _______ is someone who uses another’s property without the knowledge of the owner, or with the knowledge of an owner who fails to take any action over a statutory period of time.
adverse possessor
To claim legal title, the adverse possessor must:
Be able to show a claim of right or color of title as reason for the possession.
Have notorious possession.
Maintain a consistent claim of hostile possession
Occupy the property continuously for a statutory period of time.
In some states, pay taxes.
___ prevents a person from claiming an interest that is inconsistent with the person’s previous statements or acts.
Estoppel
Contain a history of every parcel of real estate in the county. Important purposes:
Public notice
Buyer protection
Lienholder protection
______ refers to the succession of property owners of record dating back to the original grant of title from the state to a private party.
Chain of title
To remove the ___title, an owner may need to initiate a ____, which clears the title record of any unrecorded claims.
clouded ;suit to quiet title
Abstract of title
is a written, chronological summary of the property’s title records, and other public records affecting rights and interests in the property.
Recording system
each state prescribes procedures for recording in public title records: forms, proper execution, acknowledgment, and witnessing.
The torrens system
title passes only when the conveyance has been duly registered on the title certificate itself. Encumbrances likewise have no legal effect until they are recorded.
Title evidence
to demonstrate marketable title to a buyer, a seller must show that the title is free of:
Doubts about the identity of the current owner.
Defects.
Claims that could affect value.
Undisclosed or unacceptable encumbrances.
The principal forms of evidence the owner can use to support these assurances:
torrens certificate
title insurance policy
attorney’s opinion of the title abstract
Title certificate
Torrens certificate
also acts as a deed of conveyance; title and encumbrances are recorded on the certificate.
Title insurance policy
indemnifying the policy holder against losses from title defects; the insurer’s “guaranty.”
Attorney’s opinion of the title abstract
a written statement from an attorney stating an opinion of marketability based on examination of the title abstract
Title certificate
a statement of the condition of title as of the date of the certificate.
The court proceeding that generally settles a decedent’s estate is called
probate
One of the conditions an adverse possessor must meet in order to obtain legal title to a property is
openly possessing and claiming the property without the owner’s consent.
In the Torrens System of recording,
title passes when the conveyance is registered on the title certificate.
What is a will?
A legal instrument for the voluntary transfer of real estate after death.
All of the following are ways for involuntary alienation to occur EXCEPT
private grant.
Which of the following circumstances is likely to render a will invalid?
The will is unsigned.
Which of the following is NOT a necessary condition for claiming title by adverse possession?
Occupy the property without concealment
Occupy an unpermitted structure on the property
Occupy the property without permission
Occupy the property for a statutory period
Occupy an unpermitted structure on the property
Which record would show you who owned a property back in 1940?
Title of Ownership
Title Record
Chain of Title
Chain of Ownership
Chain of Title
What is a documentary stamp tax?
A transfer tax based on the price of the property being conveyed
A buyer has signed a contract to purchase a property but is uncertain of the condition of the title. Who is legally responsible for knowing the condition of the title?
The buyer
The question of who owns title to a property is generally a function of
who has the best evidence of ownership.
If an owner of real property dies without leaving a will and with no legal heirs, what will generally happen to the property?
It will revert to the state or county by escheat.
Title can be voluntarily transferred by
grant, deed, and will.
A lender’s title insurance policy generally protects
the lender against the possibility that the lender’s lien cannot be enforced.
The property transferred by a will is called the
devise.
