Real EstateReal Estate Principles and Practices Principles and Practices

Chapter 5Chapter 5

Estates, Interests, Deeds, Estates, Interests, Deeds, and Titleand Title

© 2010 by South-Western, Cengage Learning

© 2010 by South-Western, Cengage Learning

Key TermsKey Terms

Acknowledgment

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

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Key TermsKey Terms

Grantor

Habendum clause

Homestead

Joint tenancy

Legal life estate

Life estate

Nonfreehold estate

Recordation

Remainderman

Reversion

Severalty ownership

Tenancy by the entireties

Tenancy in common

Title

Warranty deed

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Freehold EstatesFreehold Estates

Ownership for an indefinite duration

Freehold: Freehold: uncertain

Types of freehold estatesTypes of freehold estatesFee simpleFee simple

Fee simple defeasibleFee simple defeasible

Life estatesLife estates

Estate of inheritanceEstate of inheritance

Not of inheritance freehold estateNot of inheritance freehold estate

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Freehold EstatesFreehold Estates

Fee Simple Fee Simple title: complete rights with absolute ownership

Sell

Will

Give away

Retain possession

Subject to government and land use restrictions

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Freehold EstatesFreehold Estates

Qualified fee estates

Two types:

Fee simple determinableFee simple determinable

Fee simple to a Fee simple to a condition subsequentcondition subsequent

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Freehold EstatesFreehold 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

ReversionerReversioner

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Freehold EstatesFreehold Estates

Violation of the condition requires court action to regain possession

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Life EstatesLife Estates

Granted by will or deedOrdinary 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

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Legal Life EstatesLegal Life Estates

Created by statuteCreated by statute

andand

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Legal Life EstatesLegal Life Estates

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Legal Life EstatesLegal Life Estates

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Nonfreehold EstatesNonfreehold Estates

Nonfreehold estate:Nonfreehold estate:Less than freehold

Possessory interest for a defiant period of time

Leasehold interests

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Nonfreehold EstatesNonfreehold Estates

Estate for yearsEstate for years

Periodic estatePeriodic estate

Estate at willEstate at will

Estate at sufferanceEstate at sufferance

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The DeedThe Deed

Title: Title: evidence of ownership

Deed: Deed: document used to transfer ownership

Tangible proof

Quality of the estate

Quantity and amount

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The DeedThe Deed

Deed gives proof of gives proof of

TitleTitle

which represents the quality of thewhich represents the quality of the

EstateEstate

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The DeedThe Deed

Livery of seizin: Livery of seizin: Transfer of possession

Grantor: Grantor: Seller

Grantee: Grantee: Purchaser

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The DeedThe Deed

Deed must be executed, delivered and accepted

Singed by Grantor

Corporations may hold title

Fictitious name

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The DeedThe Deed

Delivery made by the grantor during grantor’s lifetime

Third party mat accept on behalf of grantee

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The DeedThe Deed

Gives constructive noticeNot mandatory

County office where the property is located

Copy in book of recordsOriginal returned

Actual notice: Actual notice: actual knowledge

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The DeedThe Deed

Competent parties

Consideration

Words of conveyance

Description of real estate

Restrictions

Quantity or quality

Signatures of grantors

Parties: grantorgrantor and granteegranteeCompetent: Competent: capable of entering into a contract

Consideration: Consideration: price paidToken amount

“For love and affection”

Words of conveyance: Words of conveyance: grant title in the granting clause

Description: Description: identifies the real estate

Restrictions: Restrictions: “subject to…”

Qualities and quantity of the interest: Qualities and quantity of the interest: warranties

Signatures of the grantorsSignatures of the grantors

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Conveyance FeeConveyance Fee

State tax – varies

Usually paid by grantor

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Types of DeedsTypes of Deeds

Most complete ownership

Guarantees title:

Covenant of seizinCovenant of seizin

Quiet enjoymentQuiet enjoyment

Freedom from Freedom from encumbrancesencumbrances

Further assurancesFurther assurances

Right to conveyRight to convey

Covenant of warrantyCovenant of warranty

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Types of DeedsTypes of Deeds

Guarantees only during grantors ownership

Grantors have not encumbered the property

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Types of DeedsTypes of Deeds

Warranties created by the grantors

Own property

Have not previously conveyed the property

Encumbrances during the grantors ownership

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Types of DeedsTypes of Deeds

No warranties

Grantor has an interest in the property

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Types of DeedsTypes of Deeds

No warranties

Grantors “quit their claim”

Used to remove a cloud on a cloud on the titlethe title

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Types of DeedsTypes of Deeds

Trust DeedTrust Deed

Secures payment of a debt

Held in trust by 3rd party for the benefit of a lender

Deed of reconveyance

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Types of DeedsTypes of Deeds

Used to donate real property

Consideration

“for $1.00 and other valuable consideration”

“for love and affection”

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Types of DeedsTypes of Deeds

Deed of SurrenderDeed of SurrenderConveys interest of life tenant or remainderman

Deed of ReleaseDeed of ReleaseClears title when mortgage is paid

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Types of DeedsTypes of Deeds

Correction DeedCorrection DeedDeed of reformation

Corrects errors

Cession DeedCession DeedUsed by a subdivider to transfer streets to the government

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Types of DeedsTypes of Deeds

Sheriff’s DeedSheriff’s DeedReferee's deed

Transfers property sold at public auction

No warranties

Administrators DeedAdministrators DeedTransfers property of deceased

Referee’s deed in partition

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Types of DeedsTypes of Deeds

Tax DeedTax DeedTransfers property sold for unpaid taxes

Executor’s DeedExecutor’s DeedTransfers property of deceased

No warranties except for executor’s acts

States full sales price

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Types of DeedsTypes of Deeds

Guardian’s DeedGuardian’s DeedConveys a minor’s interst

Director’s DeedDirector’s DeedPublic agency sells surplus land

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Taking Title to Real PropertyTaking Title to Real Property

Ways to take title:Ways to take title:Joint tenancy

Tenancy in common

Concurrent ownership

Tenancy by the entirety

Severalty ownership

Multiple ownership

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Taking Title to Real PropertyTaking Title to Real Property

Acquired prior to marriage

Acquired by gift or inheritance

Each may devise their portion of the community property to anyone

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Taking Title to Real PropertyTaking 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

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Taking Title to Real PropertyTaking Title to Real Property

HomesteadHomestead: family’s place of residence

Protection from judgments

Requirements:

Permanent residence

File as homestead

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Taking Title to Real PropertyTaking Title to Real Property

Claim’s which are not exempt:

Real estate taxes

Real estate special assessments

Real estate mortgages

Mechanics liens