Chapter 5 Transfer of Title to Real Property

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aribet
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235784
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Chapter 5 Transfer of Title to Real Property
Updated:
2013-11-06 20:15:48
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NC Real Estate Exam
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Description:
Modern Real Estate Practice in NC 8th Edition
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  1. Title
    • The right to or ownership of the land
    • It represents the bundle of rights the owner possesses in the real estate
    • It denotes the facts that, if proven, enable a person to recover or retain ownership or possession of a parcel of real estate.
  2. Alienation
    The act of transferring property to another.
  3. Deed
    a written instrument by which an owner of real estate intentionally conveys right, title, or interest in the parecel of real estate to another.
  4. Grantor
    Owner (Seller)
  5. Grantee
    Person who receives the title. (Buyer)
  6. Requirements for a valid conveyance (deed)
    • Must be in writing
    • Grantor must have legal capasity to execute a deed
    • Grantor and grantee must be identified
    • Must be adequate words of conveyance
    • Must be an accurate legal description of the property conveyed.
    • Deed must be signed by the grantors
    • Deed must be delivered to an voluntarily accepted by the grantee.
  7. Voluntary Alienation
    Gifting or sale with the wishes and consent of the property owner.
  8. Types of Deeds (4)
    General Warranty Deed, Special Warranty Deed, Quitclaim Deed, Special Purpose Deeds
  9. General Warranty Deed 4 Covenants
    • Provides greater protection than any other deed, best deed for the grantee, gives the grantor greatest degree of liability
    • Covenant of seisin and the right to convey
    • Covenant against encumberances
    • Covenant of quiet enjoyment
    • Covenant of warranty forever
  10. Special Warranty Deed (Limited warranty deed)
    • 2 warranties:
    • Warranty that grantor received title
    • Warranty that property was unencumbered by grantor.
  11. Bargain and sale deed
    • No express warranties against encumbrances.
    • Does imply that grantor holds title and possession of the property
  12. Quitclaim Deed (non-warranty deed)
    • Provides grantee with least protection of any deed.
    • No express or implied covenants or warranties.
    • Used primarily to convey less that fee simple or to cure a title defect (cloud on the title).
  13. Special purpose deeds
    • Correction Deed
    • Deed of gift - must be recorded within 2 years or it becomes void.
    • Deed of release
    • Deed in lieu of foreclosure - gives the lender back the property instead of claiming foreclosure.
    • Trustee's deed - generally used to transfer title after a foreclosure auction.
    • Timber or mineral deed
    • Deeds executed pursuant to court order - full consideration (money paid for property) is usually stated in the deed.
  14. Excise Tax
    • Tax paid by the seller of real property, based on the sales price of the property.
    • 1$ for every $500 of consideration or fraction thereof and always is expressed as a whole dollar amount
    • Exempts transfer by a govt. entity, transfer by will or intestate succession because of death, transfer by deed of gift when no consideration is paid, transfer by merger or consolidation, transfer by lease for a term of years, and transfer by instruments securing a debt.
  15. Calculating Excise tax
    Round the sales price up to the nearest $500, divide by 500 and multiply by $1
  16. Involuntary Alienation
    Transfer of property without the owner's wishes or consent.  Usually carried out by operation of law (Government condemnation, to pay a debt).
  17. Escheat
    When a person dies intestate (without a will) and leaves no heirs, the title to that person's real estate passes to the state by the state's power of escheat.
  18. Eminent Domain
    The right of the government to acquire privately owned real estate for public use.
  19. Condemnation
    The process by which the government exercises the right of eminent domain.
  20. Adverse Possession
    The open, continuous, exclusive, adverse, notorious (OCEAN) possession of another's land under a claim of title.  Possession for a statutory period of 20 years in NC may be a means of acquiring title.
  21. Transfer of a deceased person's property:
    By descent
    By will
    • By descent:  Intestate succession (without a will), property will be passed down to the heirs, if no heirs it will escheat to the state.
    • By will:  The gift of real property by will is known as devise.  a legacy or bequest is a gift of personal property.  Person receiving personal property is a beneficiary.
    • If a husband and wife own property as tenants by the entirety, that property cannot pass by will.
  22. Marketable Title (5 criteria)
    • Be free from significant liens and encumbrances
    • Disclose no serious defects
    • Be free of doubtful questions of law or fact to prove its validity
    • Protect a purchaser from the hazard of litigation or any threat to quiet enjoyment of the property
    • Convince a reasonably well-informed and prudent person that the property could be sold or mortgaged at a fair market value.
  23. Title Search
    the examination of all public records that might affect a title.
  24. Chain of title
    Shows the record of ownership.  In NC, real estate agents are prohibited from giving an opinion on the condition of a title.
  25. Marketable Title Act
    Provides that if a chain of title can be tracked back for 30 years and no other claim has been recorded during that time, the title becomes a marketable title.
  26. Title Insurance
    A contract by which a title insurance company agrees to indemnify (compensate or reimburse) the insured against any losses sustained as a result of defects in a title that existed at the time the policy was issued, other than those exceptions listed in the policy.
  27. ALTA Policy
    American Land Title Association, includes all the protection of a standard policy plus additional protection to cover risks that may be discovered only through inspection of the property or revealed by examination of an accurate survey.
  28. Constructive Notice
    Public notice during title recordation
  29. Conner Act
    a state law that provides that many types of real estate documents are not valid as to third parties unless they are recorded.

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