Transfers by Operation of Law

Question 1

When seller dies before closing

Answer 1

if they have already executed a sale contract, the decedents personal rep must complete the transaction.

Question 2

Ademption in inheriting realty 2 types

Answer 2

1. adeemed by extinction

2. adeemed by satisfaction

Question 3

Adeemed by extinction

Answer 3

If a gift of realty described specifically in a will is not in the T’s estate at the time of death, then its adeemed by extinction, and B takes nothing.

Question 4

Adeemed by satisfaction

Answer 4

If a gift of realty was made during the T’s lifetime, but the specific property is still mentioned in the will, the gift is adeemed by satisfaction b/c the b has already received it.

Question 5

If a gift of realty was made during T’s lifetime but a general devise in the will, then the realty already received will not be adeemed by satisfaction unless:

Answer 5

1. will provides for deducting gift
2. T, in writing, declared gift was part of general devise, OR
3. devisee, in writing, acknowledged gift was part of the general devise.

Question 6

Exoneration (majority rule)

Answer 6

Inherited realty is taken subject to all outstanding liens and mortgages, the estate does not pay them off.

Question 7

Lapse

Answer 7

CL: if the B predeceased the decedent, any gift to the B fails.
Modern: anti-lapse where heirs stand in the shoes

Question 8

Three types of recording statutes

Answer 8

1. race statute
2. notice statute**
3. race-notice statute

Question 9

Race Statute

Answer 9

First in time, first in right

Question 10

Notice Statute***

Answer 10

A bona fide purchaser for value who takes w/o notice of any other claim prevails

Question 11

Types of notice

Answer 11

1. actual
2. constructive
3. inquiry

Question 12

Actual notice

Answer 12

Actually knew

Question 13

Constructive Notice

Answer 13

comes through recording acts. As soon as you record a deed, you give constructive notice to the world that the property is yours.

Question 14

Inquiry notice

Answer 14

Info that is learned or could have been learned that would lead a RP to inquire further.

Question 15

Race-Notice Statute

Answer 15

An unrecorded conveyance is invalid against a subsequent BFP who takes w/o notice and records first.

Question 16

Estoppel by deed ***

Answer 16

Applies to the situation where someone transfers title to prop that they don’t have then they do acquire title. Earlier conveyance by them is now considered valid.

Question 17

Shelter rule*** chain of title

Answer 17

Provides protection for a subsequent taker who does not satisfy the applicalbe recording statute. A person who is a successor in interest to a person protected by the recording statute is also protected (shelters under the good titlte of the predecessor)

Question 18

exception to the shelter rule

Answer 18

a subsequent person may not take advantage of the shelter rule if that person:

1. attempts to wash the deed by conveying to a TP and then immediately taking a reconveyance of the prop; OR
2. commits fraud in respect to the deed.

Question 19

Title Insurance

Answer 19

can be purchased at time of closing by the buyer, so that if there is a defect in chain of title, an unexpected encumbrance, or other similar problem, the buyer can make a claim under the insurance policy.