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Modern Real Estate Practices > Ownership & Title > Flashcards

Flashcards in Ownership & Title Deck (25):
1

Estate in Severalty

Sole Ownership

  • owned by an individual
  • upon death, prop goes to heirs (intestate) or devisees (had a will)
  • legal entity can own (ex. corp., partnership, trust, REIT - syndication)
  1. in LLC, partner's liability is equal to their share or amount invested
  2. sale of interest may require securities license

2

Concurrent (Multiple) Ownership

 

  • two or more persons have an undivided interest, factional but undivided, with equal rights to possession; no one person owns any particular part of the whole (or land in this case)

3

Tenancy in Common

  • co-ownership w/o any right to survivorship to other owners; it's the default for Texas (unless specified in deed differently)
    • shares can be unequal
  • upon death, interest goes to heirs/devisees
    • subject to probate
    • each tenant responsible for taxes as individual or group
  • Partition Lawsuit can divide property

4

Joint Tenancy

  • co-ownership WITH right of survivorship to other owners; surviving tenants to absorb dead tenants shares & liens dissolve
  • deed must specify JT; if missing, defaults to TIC
  • Shares must be equal
  • upon death, interests go to co-owners w/o going through probate
    • overrides a will
    • death cert & JT affidavit must be recorded
  • 4 entities: PITT (posession, interest, title, & time)
  • Partition Lawsuit can divide prop among co-owners

5

Tenancy by the Entirety

  • exculsive to married couples (some states)
  • community property rights effect property rights during marriage by spouses & after marriage.
    • prop owned jointly is distinguished from each spouse's seperate property
    • generally, any prop acquired during marriage is considered community property

6

Common Interest Community Ownership

Definition & Types

  • often regulated by state's common interest ownership act
  • can levy mandatory assessments on it's owners (HOA)
  • seller's have disclosure requirements to buyers related to the sale of
  • TYPES:
    • Condo, Townhouse, Cooperative, Time-Share

7

Condominium

  • cubes of air; hold freehold estate in the unit and a tenancy in common in the common elements (used by all: pool, hallway, elevator, tennis court, etc.)
  • may be any type of real estate, residential/commercial (office bldg, parking lots, etc.)
  • created by recorded declaration describing legal and physical structure & any restrictions for use.
    • describes any party walls
    • specifies common elements
    • specifies any limited common elements (reserved for use of one or more with exclusion to other units; assigned parking, balconies, storage)
  • each owner member of HOA
  • seperate title and taxation
    • unit w/common elements % is seperate parcel
    • taxed as one parcel; HOA fees + Prop Taxes
  • owners own and finance their own unit
  • sellers required to give full disclosure (especially the budget)

8

HOA role in Condominium

  • manages common elements & pays taxes HOA owes
  • adopts rules, regs, & budget
  • adopts & amends bylaws
  • imposes & collects assessments (creates a foreclosable lien on the unit)
  • holds annual meetings
  • maintains insurance on common elements, not the seperate units themselves

9

Town House

(Condo Twin, just more grounded)

  • similar in ownership rights to condo & establishment of the HOA
  • generally, includes land under and around the unit

10

Cooperative

  • all tenants for corporation to buy & own property; entity will allow owners (stockholders) occupany; you do not own the unit, the corp does.
  • tenant's association owns the real estate
  • buyer is member of association, share holder, and has proprietary lease (No deed, no ownership; own shares of the corporations stock)
  • stockholder/tenant pays assessment/assoc. fees
    • like a condo, but no deed

11

Time-Share

(Think resort properties...)

  • buyer gets interest in real estate & right to use for a certain period of time.
  • purchasers or developer may own the land and contract for it's use
  • sale of time-share/condo with a mandatory rental pool agreemnt may require securities license seperate from RE license

12

Alienation

3 ways to do this...

  • the act of conveying/transferring ownership of real property

  1. Private Grant (from indiv. using deed)
  2. Public Grant (from gov't to indiv. using land patent)
  3. Dedication (from indiv. to gov't)

13

Deeds

Characterisitics & Need-to-Knows

  • instrument that transfers bundle of rights/whatever interest held by grantor to a new owner (grantee), but does NOT prove ownership
  • only conveys real property
  • voluntary alienation
  • sellers required to provide written deed, never oral.
  • differences in deeds lie in extent of promises made by grantor to grantee
  • does not have to be recorded to transfer
    • title passes upon acceptance of the grantee

14

7 Essential Elements of a Deed

  • Competent Grantor: 18, sane, and sober
  • Execution (signature) by the grantor(s)
  • Identifiable grantee
  • Delivery to and acceptance by the grantee
  • Legal Description of the land
    • describes only the land; appurtenances presumed to transfer with the land unless specified otherwise
  • Consideration: money or something of value; "one dollar and other good and valuable consideration"
  • Words of Converyance (granting clause): says grantor voluntarily gives to grantee(s)
    • Habendum Clause: conveys freehold estate

15

General Warranty Deed

  • General Warranty Deed
    • most promises/covenants
    • best protection for grantee
    • 5 covenants & warranties of title:
      1. Covenant of seisin
      2. Covenant of quiet enjoyment (undisturbed)
      3. Covenant against encumbrances
      4. Covenant of further assurance
      5. Warranty forever; guaruntee of defense of title

16

Special/Limited Warranty Deed

  • Special/Limited Warranty Deed
    • warranty that grantor received title
    • warranty that property was unencumbered by grantor
    • A.K.A. Grant Deeds

17

Quitclaim Deed

  • used primarily to convey less than fee simple or to cure a title defect
    • best for grantor; least amount of liabilities
    • no covenants or warranties
    • problem solver; used to clear clouds on titles

18

Bargain & Sale Deed

Trustee/Sherriff's Deed/Certificate of Sale

Reconveyance Deed

  • B&S DEED: implicatioon that grantor holds title and possession
    • does not warrant against liens or encumbrances
    • warrants grantor's right to convey title
  • T/S DEED: transfers title at the end of a foreclosure proceeding or statutory redemption period; by law, to pay lenders
  • RECON DEED: used when borrower pays off a loan secured by a deed of trust; used by trustee to return title of trustor.

19

Conveyance After Death

Probate, Testate, & Intestate Succession

Dates back to Old England; a will transfers personal property after death & a testament transfers real property after death.

  • probate: process of distributing all assests of decesaed.
    • wills must go through probate before devisee to receive real property.
  • testate: transfer by will
    • Devise - act of transferring deceased person's interest in real estate to another (DEED = REAL PROPERTY)
    • Beqquest - act of transferring deceased person's interest in personal property to another (BILL OF SALE = PERSONAL PROPERTY)
  • Intestate Succession: no will; state will write will for you
    • heirs determined by state laws of descent; cannot be an heir until someone has passed.

20

Involuntary Alienation

Other ways of aquiring rights

  • law presumes owners will regularly inspect property
  • rights could be lost if owners do not inspect, even if they do not live in town
  • a quiet title action is needed in order to obtain title for possession
  • owners who grant permission for another's use (acknowledging possession) do not fall under this

21

Adverse Possession

  • ownership recognized by the court after Open, Continuous, Exclusive, Actual, & Notorious/Hostile (OCEAN) possession of another's land for a certain period of time set by state law

22

Easement by Prescription/Prescriptive Easement

  • easement recognized by court after OCEAN use of another's land for a certain period set by state law.

OCEAN: Open, Continuous, Exclusive, Actual, & Notorious/Hostile

23

Seller's Disclosure

(What does it cover?)

  • could be form or list depending on state & covers:
    • land/soil & environmental conditions (material fact/decision making fact)
    • structural issues & condition of fixtures
    • lot size, encroachments, easements, & so on
    • all material defects
  • seller's complete to the best of their current knowledge
  • must disclose latent and visible material defects (facts)
  • state laws determine when buyer should receive
  • buyers can rescind contract should it be proven the seller or seller's broker knew about a material fact and did not disclose it

24

Seller's Disclosure

Broker Requirements & Responsibilities

  • must visually inspect the property
  • disclose all material defects found, even if seller is not aware
  • request that the seller dislcose any laten defects
  • upon discovery of any defects, immediately disclose to all parties involved (buyer, buyer's agent, and seller)
  • suggest a property inspection; give options for property inspector
  • seller would be held responsible for any misrepresentation if seller withheld information on a defect from the broker

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