Unit 9 Title, Deeds, And Ownership Restrictions

Question 1

Identify the legal terms used in a will.

Answer 1

( Deceased Creator of Will )

• Testator “male”
• Testatrix “female”

( Property Conveyed by Will )

• Devise “real property”
• Bequest “personal property”

( Recipient of Property by Will )

• Devisee “real property”
• Beneficiary “personal property”

Question 2

Distinguish between actual notice and constructive notice to legal title.

Answer 2

1. ) “Actual notice” is direct knowledge acquired in the course of a transaction. Assume that a seller verbally discloses to the buyer that there is a construction lien on his home for an unpaid pool repair job. The seller has given the buyer actual notice that there is a lien on the property.
2. ) “Constructive notice” (also called legal notice) is accomplished by recording a document in the public records.

Question 3

Understand the types of title insurance policies.

Answer 3

1. ) “Owner’s policy” is issued for the total purchase price of the property. It helps to protect the new owner (or the owner’s heirs) against unexpected risks such as forged deed signatures and damages for any defect in the title.A one- time premium is paid when the policy is issued. The policy is not transferable to another owner.
2. ) “Lender’s policy” is issued for the unpaid mortgage amount. The lender (or mortgagee policy) protects the lender against title defects. This policy is transferable. If the mortgage lender sells the mortgage to another investor, the title insurance is assignable to the new mortgagee.

Question 4

Be able to explain clauses in a deed.

Answer 4

( Interest or Estate Being Conveyed )
The “habendum clause” defines the bundle of legal rights being conveyed to the grantee. The clause starts with the words “to have and to hold.” Then, the word “forever” usually follows if the estate is fee simple or the words “for the life of the grantee” if it is a life estate.

Question 5

Name the covenants in a General Warranty deed.

Answer 5

• Covenant of seisin
• Covenant against encumbrances
• Covenant of further assurance
• Covenant of quiet enjoyment
• Covenant of warranty forever.
  “The grantor guarantees to forever warrant and defend the grantee’s title against all lawful claims.”

Question 6

Differentiate the types of lease agreements.

Answer 6

Net Lease, the tenant (lessee) pays fixed rent plus property costs such as maintenance and operating expenses (taxes, insurance, and utilities). Net leases are typically used on commercial property. The terms net, net-net, and triple-net are often used in commercial real estate. The number of “nets” indicates that the tenant is assuming more and more of the expenses.