Real Estate Principles and Practices
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Real Estate Principles and Practices Chapter 5 Estates, Interests, Deeds, and Title © 2014 OnCourse Learning Key Terms Acknowledged Community property Consideration Co-ownership Curtesy Deed Dower Estate Fee simple Fee simple absolute Fee simple defeasible Fee simple determinable Fee simple to a condition subsequent Freehold estate Grantee © 2014 OnCourse Learning Key Terms Grantor Habendum clause Homestead Joint tenancy Legal life estate Life estate Nonfreehold estate Recordation Remainderman Reversion Reversioner Severalty ownership Tenancy by the entirety Tenancy in common Title Warranty deed © 2014 OnCourse Learning Freehold Estates Ownership for an indefinite duration Freehold: uncertain Types of freehold estates Fee simple Fee simple defeasible Life estates Estate of inheritance Not of inheritance freehold estate © 2014 OnCourse Learning Freehold Estates Fee Simple title: complete rights with absolute ownership Sell Will Give away Retain possession Subject to government and land use restrictions © 2014 OnCourse Learning Freehold Estates Qualified fee estates Two types: Fee simple determinable Fee simple to a condition subsequent © 2014 OnCourse Learning Freehold Estates Limits use to specific terms Conditional “as long as” used for purpose granted “qualified” the estate Violation of the condition results in land automatically reverting to original grantor Reversioner © 2014 OnCourse Learning Freehold Estates Violation of the condition requires court action to regain possession © 2014 OnCourse Learning Life Estates Granted by will or deed Ordinary life estate: based on life of life tenant Life estate pur autre vie: based on someone else's life Life tenant: Must maintain the property Pay taxes May not commit waste May lease May mortgage May sell May not will © 2014 OnCourse Learning Legal Life Estates Created by statute and © 2014 OnCourse Learning Legal Life Estates © 2014 OnCourse Learning Legal Life Estates © 2014 OnCourse Learning Nonfreehold Estates Nonfreehold estate: Less than freehold Possessory interest for a defiant period of time Leasehold interests © 2014 OnCourse Learning Nonfreehold Estates Estate for years Periodic estate Estate at will Estate at sufferance © 2014 OnCourse Learning The Deed Title: evidence of ownership Deed: document used to transfer ownership Tangible proof Quality of the estate Quantity and amount © 2014 OnCourse Learning The Deed Deed gives proof of Title which represents the quality of the Estate © 2014 OnCourse Learning The Deed Livery of seizin: Transfer of possession Grantor: Seller Grantee: Purchaser © 2014 OnCourse Learning The Deed Deed must be executed, delivered, and accepted Singed by Grantor Corporations may hold title Fictitious name © 2014 OnCourse Learning The Deed Delivery made by the grantor during grantor’s lifetime Third party mat accept on behalf of grantee © 2014 OnCourse Learning The Deed Gives constructive notice Not mandatory County office where the property is located Copy in book of records Original returned Actual notice: actual knowledge © 2014 OnCourse Learning The Deed Competent parties Consideration Words of conveyance Description of real estate Restrictions Quantity or quality Signatures of grantors Parties: grantor and grantee Competent: capable of entering into a contract Consideration: price paid Token amount “For love and affection” Words of conveyance: grant title in the granting clause Description: identifies the real estate Restrictions: “subject to…” Qualities and quantity of the interest: warranties Signatures of the grantors © 2014 OnCourse Learning Conveyance Fee State tax – varies Usually paid by grantor © 2014 OnCourse Learning Types of Deeds Most complete ownership Guarantees title: Covenant of seizin Quiet enjoyment Freedom from encumbrances Further assurances Right to convey Covenant of warranty © 2014 OnCourse Learning Types of Deeds Guarantees only during grantors ownership Grantors have not encumbered the property © 2014 OnCourse Learning Types of Deeds Warranties created by the grantors Own property Have not previously conveyed the property Encumbrances during the grantors ownership © 2014 OnCourse Learning Types of Deeds No warranties Grantor has an interest in the property © 2014 OnCourse Learning Types of Deeds No warranties Grantors “quit their claim” Used to remove a cloud on the title © 2014 OnCourse Learning Types of Deeds Trust Deed Secures payment of a debt Held in trust by 3rd party for the benefit of a lender Deed of reconveyance © 2014 OnCourse Learning Types of Deeds Used to donate real property Consideration “for $1.00 and other valuable consideration” “for love and affection” © 2014 OnCourse Learning Types of Deeds Deed of Surrender Conveys interest of life tenant or remainderman Deed of Release Clears title when mortgage is paid © 2014 OnCourse Learning Types of Deeds Correction Deed Deed of reformation Corrects errors Cession Deed Used by a subdivider to transfer streets to the government © 2014 OnCourse Learning Types of Deeds Sheriff’s Deed Referee's deed Transfers property sold at public auction No warranties Administrators Deed Transfers property of deceased Referee’s deed in partition © 2014 OnCourse Learning Types of Deeds Tax Deed Transfers property sold for unpaid taxes Executor’s Deed Transfers property of deceased No warranties except for executor’s acts States full sales price © 2014 OnCourse Learning Types of Deeds Guardian’s Deed Conveys a minor’s interest Director’s Deed Public agency sells surplus land © 2014 OnCourse Learning Taking Title to Real Property Ways to take title: Joint tenancy Tenancy in common Concurrent ownership Tenancy by the entirety Severalty ownership Multiple ownership © 2014 OnCourse Learning Taking Title to Real Property Acquired prior to marriage Acquired by gift or inheritance Each may devise their portion of the community property to anyone © 2014 OnCourse Learning Taking Title to Real Property Two or more people join in a business for the purpose of making a profit Trade name – severalty Individual owner names tenants in common or join tenancy © 2014 OnCourse Learning Taking Title to Real Property Homestead: family’s place of residence Protection from judgments Requirements: Permanent residence File as homestead © 2014 OnCourse Learning Taking Title to Real Property Claims which are not exempt: Real estate taxes Real estate special assessments Real estate mortgages Mechanics’ liens © 2014 OnCourse Learning
