Unit 9 Flashcards
Title
A way of referring to ownership not an actual printed document
It can be transferred in 3 ways:
1. Voluntary Alienation: sale, gift, or will
2. Involuntary Alienation: Operation of law
3. Will or descent after the owner dies
Deed
Written instrument by which an owner of real estate intentionally conveys the owners right, title, or interest in a parcel of real estate to another. Requirements: - granting clause - Habendum - Legal description - Signature of grantor - Delivery and acceptance
Grantor
Conveys the title by deed. Must be 18 years old. A deed by a minor is voidable. Must be mentally capable. If impaired the deed is voidable. Legally incompetent then the deed is void.
Grantee
Receives title by deed. Must be named.
Consideration
A valid deed must contain a clause acknowledging that the grantor has received consideration. Usually money but does not have to be.
Granting Clause
Words of conveyance. “I John Smith, convey and warrant…”
Habendem Clause
Defines ownership taken by the grantee. “to have and to hold”
Acknowledgement
A formal declaration under oath that the person who signs the written document does so voluntarily and that the signature is genuine. Prevent forgery.
Corporate Deed (3 basic rules)
- A corporation can convey real estate only by authority granted in its bylaws or on proper resolution passed by its board of directors.
- Deeds to real estate can be signed only by an authorized officer
- The corporate seal must be affixed to the conveyance
Common deed forms
- General warranty deed
- Special warranty deed
- Bargain and sale deed
- Quitclaim deed
General Warranty Deed
Provides the greatest protection to the buyer because the grantor is legally bound by certain covenants or warranties. Grantors defend title against both themselves and all those who previously held title.
Five Covenants:
- Seisin: Possession
- Against encumbrances: free from any liens or encumbrances
- Quiet enjoyment: good against third parties
- further assurance
- warranty forever
Special Warranty
The norm.
Warranties that the grantor received title and that the property was not encumbered during the time the grantor held title except as noted in the deed.Grantors defend the title against themselves.
Bargain and sale deed
Contains no express warranties against encumbrances. It does imply that the grantor holds title and possession of the property. Used in foreclosures and tax sales. Should get title insurance for protection.
Quitclaim deed
Provides the least protection of any deed. It carries not covenants or warranties. The buyer can be certain the seller has renounced all claims to the property. Only conveys whatever interest the grantor may have when the deed is delivered. Usually used to cure a defect called a cloud on the title ex) misspelled name. Also used when transferring between family members.
Deed in trust
mean by which a truster conveys real estate to a trustee for the benefit of a beneficiary.
Transfer Tax
Most state laws require the conveyance of real estate be taxed. Payable when the deed is recorded. May be paid by the seller or buyer or split. (value/ unit) x rate per unit= tax
Exempt from transfer tax
- between parent and child or siblings
- deeds not made in connection with a sale
- governmental bodies
- charity, religious, or educational institutions
- partitions
- tax deeds
- deeds pursuant to mergers of corporations
- deeds from subsidiary to parent corporations
- deeds securing debts
Intestate
When a person dies with no will and no heirs the title to the estate passes to the state by the states power of escheat.
Adverse Possession
Involuntary title transfer. When someone is open, notorious, continuous, hostile- without consent, and adversely using another property for a prescriptive period (in PA 21 years). Leads to ownership.
Testator
person who makes the will.
Devise
Gift of real property
Bequest
Gift of personal property
Legacy
Gift of money
Probate
legal procedure that confirms the validity of a will and accounts for the decedents assets. It also confirms the person to whom the assets are to pass. Can take several months. Formal judicial process. Takes place where the dependent resided and the country in which the property is located.
Codicil
Document made for modification, amendment, or an addition to a will.
