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Modern Real Estate Practices > Ownership & Title > Flashcards

Flashcards in Ownership & Title Deck (25):

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


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)


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


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


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


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



  • 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)


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


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



  • 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



(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



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)



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


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


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


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


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


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.


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.


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


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


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


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


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