Unit 6: Transfer of Title Flashcards
T/F Transfer of title is an aspect of a real estate sales transaction generally handled by lawyers and title companies,
True
Title Concepts - voluntary alienation
T/F: A “grantor” conveys property TO a “grantee”
True
Title Concepts - voluntary alienation
T/F: A “grantee” receives property FROM a “grantor”
True
title Concepts - Voluntary alienation
What is a “deed” and what does it convey?
A deed is the instrument that conveys property from grantor to grantee
What is “Voluntary Alienation”
Voluntary alienation is the legal term for the transfer of title during the property owner’s lifetime
How is a “deed” executed”
a deed is executed by the grantor
Who is the “grantor”?
The grantor is the owner who transfers the property
Who is the “grantee”?
The grantee is the person who receives the property
What are the requirements for a valid deed (9)
- grantor who has the legal competency to execute the deed
-grantee named with reasonable certainty to be identified
-statement of consideration
-granting clause (words of conveyance)
-Habendum clause, which defines the ownership right received by the grantee
-accurate legal description of the property conveyed
-any relevant exceptions or reservations to conveyance of full title
-acknowledgement (notarization) of the signature of the grantor
-delivery of the deed and acceptance by the grantee to pass title
What is a “habendum clause”?
The habendum clause begins with the words to have and to hold. Its provisions must agree with those stated in the granting clause
What is an “acknowledgement”?
an acknowledgment is a formal declaration under oath that the person who signs a written document does so voluntarily and that the signature is genuine
Types of Deeds
General Warranty deed
this deed provides the greatest protection to the buyer because the grantor is legally bound by the certain covenants (promises) or warranties.
Types of Deeds
Special Warranty deed
A deed in which the grantor warrants, or guarantees, the title only against defects arising during the period of the grantor’s tenure and ownership of the property and not against defects existing before that time, generally using the language, “by, through, or under the grantor but not otherwise.”
Types of Deeds
Bargain and sale dee
A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed.
Types of deeds
Quitclaim deed
provides grantee with the lease protections. Caries no covenants or warranties and generally convesys only whatever intereste the grantor may have when the deed is delivered.
Types of Deeds
Deed of Trust
An instrument used to create a mortgage lien by which the borrower conveys title to a trustee, who holds it as security for the benefit of the note holder (the lender); also called a deed of trust.
types of deeds
reconveyance deed
A deed used by a trustee under a deed of trust to return title to the trustor.
types of deeds
trustee’s deed
A deed used by a trustee under a deed of trust to return title to the beneficiary
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What is a “transfer tax”
Tax stamps required to be affixed to a deed by state and/or local law.
Math
A state has a transfer tax of $1.50 for each $500 (or fraction of $500) of the sales price of any parcel of real estate. The transfer tax is to be paid by the seller. To calculate the transfer tax due in the sale of a $300,000 house, use the following two steps:
Value ÷ dollar amount per taxable unit = taxable units
Taxable units × rate per unit = tax
In this example:
$300,000 ÷ $500 = 600 taxable units
600 × $1.50 = $900
The seller in this transaction must pay a transfer tax of $900 to the state.
What is involuntary alienation”?
act of transferring property to another involuntarily - usually by operation of law
examples of involuntary alienation
-condemnation allowed by state’s power of eminent domain
-foreclosure of a mortgage loan
-sale to satisfy delinquent tax liens
-transfer on death of owner by law of intestate succession or if no heirs found, to state by excheat
-adverse possession
what happens whena. person dies “intestate” (wihtout valid will)
the title to the real estate passes to the heirs identified in the state’s law of intestate succession. if no heris can be identified or found, the state will acquire the prperty by the state’s power of escheat
What is adverse possession?
Another means of involuntary transfer. The actual, open, notorious, hostile, and continuous possession of another’s land under a claim of title. Possession for a statutory period may be a means of acquiring title.
