Chapter 3 Flashcards
(30 cards)
What are the essential elements of a deed?
A valid deed must include
(1) Identification of grantor and grantee
(2) Consideration
(3) Words of conveyance
(4) Legal description of the property
(5) Acknowledgment by a notary
(6) Delivery and acceptance.
Why is a competent grantor required for a valid deed but not a competent grantee?
The grantor must be legally capable of transferring ownership, whereas a grantee can be a minor or legally incompetent, as title can be held in trust or managed by a guardian.
What is the purpose of the Habendum Clause?
The Habendum Clause specifies the type and extent of ownership granted (e.g., ‘fee simple’ for full ownership, ‘life estate’ for ownership limited to a lifetime).
What is the difference between a General Warranty Deed and a Special Warranty Deed?
A General Warranty Deed guarantees the title is free from defects throughout the property’s history, while a Special Warranty Deed only covers defects occurring during the seller’s ownership.
How does a Quitclaim Deed differ from other types of deeds?
A Quitclaim Deed transfers any interest the grantor has without guarantees or warranties, often used to clear title defects or transfer property between family members.
What are common deed restrictions, and how do they impact property use?
Deed restrictions (or restrictive covenants) limit land use, such as prohibiting commercial buildings in a residential area. They are enforceable by homeowners’ associations or property owners.
What is an Implied Easement, and how does it arise?
An Implied Easement occurs when land use suggests an intended right of access (e.g., a seller retaining access to landlocked property by prior use).
What is an Easement by Prescription, and what are its legal requirements?
An Easement by Prescription is acquired through continuous, open, notorious, and hostile use of another’s property for a statutory period (often 10-20 years).
What is an Easement by Necessity?
An Easement by Necessity is created when a landlocked parcel has no access to a public road, ensuring legal access.
What is the Doctrine of Constructive Notice, and why is it important?
The doctrine states that once a document (such as a deed) is recorded, all parties are legally bound by it, whether or not they have read it.
What is Actual Notice, and how does it differ from Constructive Notice?
Actual Notice means a party has direct knowledge of a legal claim or property interest, whereas Constructive Notice applies once a document is recorded in public records.
What is Title Insurance, and what risks does it protect against?
Title Insurance protects property owners and lenders from financial losses due to title defects, unknown liens, or ownership disputes.
How is Title Insurance different from other types of insurance?
Unlike hazard insurance, Title Insurance is a one-time payment covering past title defects rather than future risks.
Who typically pays for Title Insurance, and when is it paid?
The seller usually pays for the owner’s policy, while the buyer pays for the lender’s policy. It is a one-time premium paid at closing.
What common exclusions exist in Title Insurance policies?
Title Insurance does not cover (1) zoning violations, (2) eminent domain actions, (3) future title defects, (4) unrecorded encroachments, or (5) environmental hazards.
What is the Covenant of Seizin in a Warranty Deed?
The Covenant of Seizin is a promise that the grantor owns the property and has the right to transfer it.
How do Marketable Title Laws reduce title search requirements?
Marketable Title Laws establish a legal starting point for title searches (often 30 years back), preventing the need for excessive historical records.
What is a Torrens Certificate, and why has its use declined?
A Torrens Certificate was a government-issued proof of ownership, but Marketable Title Laws and Title Insurance have largely replaced its function.
What are examples of conflicting claims to property that may not appear in public records?
(1) Adverse Possession, (2) Easements by Prescription, (3) Unrecorded Leasehold Interests, (4) Encroachments, (5) Easements by Estoppel, (6) Unrecorded Boundary Changes.
Why might a property survey be necessary when purchasing a home?
A survey identifies encroachments, fence placement issues, or violations of setback requirements that may not be apparent without an official boundary assessment.
What are the three major systems for legally describing property?
(1) Metes and Bounds (physical measurements), (2) Government Rectangular Survey (divides land into sections), (3) Plat Lot and Block Number (used for urban subdivisions).
Why is the Lot and Block System commonly used in urban real estate?
The Lot and Block System provides a clear, recorded map reference for easy identification and transfer of residential properties.
How does the Government Rectangular Survey system divide land?
Land is divided into townships (6x6 miles), then sections (1 square mile each), and further quarter sections for precise descriptions.
What challenges make establishing clear title more difficult for real estate than personal property?
Real estate has long ownership histories with potential claims, while personal property transactions typically involve clear and direct ownership transfers.
