Unit 6: Transfer of Title- 6% Flashcards Preview

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Flashcards in Unit 6: Transfer of Title- 6% Deck (66)
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1
Q

Acknowledgment

A

A formal declaration made before a duly authorized officer, usually a notary public, by a person who has signed a document.

2
Q

Adverse Possession

A

The actual, open, notorious, hostile, and continuous possession of another’s land under a claim of title. Possession for a statutory period may be a means of acquiring title.

3
Q

Bargain And Sale Deed

A

A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed.

4
Q

Deed

A

A written instrument that, when executed and delivered, conveys title to or an interest in real estate.

5
Q

Deed Of Trust

A

See trust deed.

6
Q

Devise

A

A transfer of real property by will. The decedent is the devisor, and the recipient is the devisee.

7
Q

General Warranty Deed

A

A deed in which the grantor fully warrants good, clear title to the premises. Used in most real estate deed transfers, a general warranty deed offers the greatest protection of any deed.

8
Q

Grantee

A

A person who receives a transfer of real property from a grantor.

9
Q

Granting Clause

A

Words in a deed of conveyance that state the grantor’s intention to convey the property at the present time. This clause is generally worded as “convey and warrant”; “grant”; “grant, bargain, and sell”; or the like.

10
Q

Grantor

A

The owner transferring title to or an interest in real property to a grantee.

11
Q

Habendum Clause

A

That part of a deed beginning with the words “to have and to hold,” following the granting clause and defining the extent of ownership the grantor is conveying.

12
Q

Intestate

A

The condition of a property owner who dies without leaving a valid will. Title to the property will pass to the decedent’s heirs, as provided in the state law of descent.

13
Q

Involuntary Alienation

A

See alienation

Alienation Clause

The clause in a mortgage or deed of trust stating that the balance of the secured debt becomes immediately due and payable at the lender’s option if the property is sold by the borrower. In effect, this clause prevents the borrower from assigning the debt without the lender’s approval.

14
Q

Probate

A

A legal process by which a court determines who will inherit a decedent’s property and what the estate’s assets are.

15
Q

Quitclaim Deed

A

A conveyance that transfers whatever interest the grantor has in the specified real estate, without warranties or obligations.

16
Q

Reconveyance Deed

A

A deed used by a trustee under a deed of trust to return title to the trustor.

17
Q

Special Warranty Deed

A

A deed in which the grantor warrants, or guarantees, the title only against defects arising during the period of the grantor’s tenure and ownership of the property and not against defects existing before that time, generally using the language, “by, through, or under the grantor but not otherwise.”

18
Q

Testate

A

Having made and left a valid will.

19
Q

Testator

A

A person who has made a valid will. A woman might be referred to as a testatrix, although testator can be used for either a man or a woman.

20
Q

Title

A

(1) The right to ownership or the ownership of land. (2) The evidence of ownership of land.

21
Q

Transfer Tax

A

Tax stamps required to be affixed to a deed by state and/or local law.

22
Q

Trustee’s Deed

A

A deed executed by a trustee conveying land held in a trust. A trustee’s deed is used to transfer title to the beneficiary of the trust or the buyer at a trustee’s sale.

23
Q

Voluntary Alienation

A

See alienation.

24
Q

Will

A

A written document, properly witnessed, providing for the transfer of title to property owned by the deceased, called the testator.

25
Q

The deed promising that the grantor holds title to the identified property and has not encumbered the property during the time it was held by the grantor is

A

the special warranty deed

The special warranty deed promises that the grantor will defend the title against the grantor’s actions, but not those of earlier owners of the property.

26
Q

The document used to convey ownership to real property is

A

a quitclaim deed.

Deeds transfer real property. Both a title policy and abstract with title opinion are used to verify and protect against defects of title.

27
Q

The document that acts as security for a promissory note is

A

a deed of trust.

A deed of trust conveys title to a trustee, who holds it as security for a promissory note. Conveyance or grant deeds, such as a general warranty or quitclaim, transfer title to property.

28
Q

A deed contains a promise that the title conveyed is good and a promise to obtain and deliver any documents necessary to ensure good title. This deed contains an example of which covenant?

A

Further assurances

Any promise to obtain documents to make the title good is the covenant of further assurance. The covenants of quiet enjoyment, seisin, and warranty forever are not addressed.

29
Q

A person who has died without a will has died

A

intestate

When a property owner dies intestate, title to the property will pass to the decedent’s heirs, as provided in the state laws of descent.

30
Q

To be valid, a deed must include all of the following EXCEPT

A

tax

Tax is not included in the deed. Typically, a transfer tax, if any, is imposed by the county in which the property is located at the time the deed is recorded. 38.

31
Q

What is the purpose of probate?

A

Distribute all assets correctly, Account for all assets that exist, Satisfy the decedent’s debts

The answer is all of these. The purpose of probate is to see that the assets are distributed correctly, that all assets are accounted for, and that the decedent’s debts are satisfied.

32
Q

A resident of Denver bought acreage in a distant county, never went to see the acreage, and did not use the ground. An artist moved a mobile home onto the land, had a water well drilled, and lived there for 22 years. The artist may become the owner of the land if the artist is in compliance with the state law regarding

A

adverse possession.

Adverse possession is (hostile) possession of real estate without the permission of the owner and contrary to the owner’s best interests. If it continues in an open, conspicuous (notorious) way for the time set by statute (the statutory period), the adverse possessor may take legal action to be declared the owner on the basis of all these facts.

33
Q

When a corporation transfers ownership of property, the deed must be signed by

A

an authorized officer.

Proper authority for the sale must be given by bylaws or by a resolution passed by the board of directors. Shareholders are not necessarily officers, nor are brokers. A grantee does not sign a deed.

34
Q

A deed contains a guarantee that the grantor will compensate the grantee for any loss resulting from the title’s failure in the future. This is an example of which covenant?

A

Warranty forever

he grantor promises to compensate the grantee for the loss sustained if the title fails at any time in the future in the covenant of warranty forever.

35
Q

A valid will devises a decedent’s real estate after payment of all debts, claims, inheritance taxes, and expenses through

A

the court action known as probate

For the title to pass to the devisees, state laws require that on the death of a testator, the will must be filed with the court and probated. Probate is the legal procedure verifying the validity of a will and accounting for the decedent’s assets.

36
Q

Title is NOT considered transferred until the deed is

A

delivered to and accepted by the grantee.

The most complete answer is delivered to and accepted by the grantee during the grantor’s lifetime.

37
Q

Generally, where does a probate proceeding involving real property take place?

A

In both the county where the decedent resided and the county in which the property is located

There will be two probates conducted: one in the county where the decedent resided and another in the county where the real estate is located.

38
Q

Title to real estate may be transferred during a person’s lifetime by

A

involuntary alienation.

Transfer of title by devise (will), descent (death intestate), or escheat (for lack of a will and lack of heirs) all occur after death. Involuntary alienation, such as condemnation, foreclosure sale, or tax sale, can occur during a person’s lifetime.

39
Q

An important purpose of a living trust is to

A

avoid having property in the trust go through probate.

On the trustor’s death, the trust need not go through a probate proceeding because title automatically passes to the beneficiary named in the trust. The living trust has no effect on the value of the estate for estate tax purposes, however.

40
Q

Which of the following is FALSE about probate?

A

The laws of probate are set at the national level.

Estate taxes must be paid before any distribution. The laws of each state govern the probate proceedings. Property held in tenancy by the entirety passes immediately.

41
Q

All of the following are true of the holder of a fee simple absolute estate EXCEPT

A

the estate terminates upon death.

Fee simple absolute estates potentially last forever.

42
Q

Probate is a formal judicial process that does all of the following EXCEPT

A

see that assets are distributed correctly, but only if the deceased was unmarried.

Married couples, as well as unmarried individuals, normally are subject to probate rules. The use of living trusts by spouses can postpone probate until the second spouse dies. Probate confirms the validity of a will, determines the precise assets, and identifies to whom those assets will pass.

43
Q

A deed would be valid without

A

a competent grantee.

While the grantor must be legally competent, the grantee could be legally incompetent—for example, a minor (provided a guardian or other person with legal authority over the property of the incompetent person accepts the deed on that person’s behalf.)

44
Q

In MOST states, a written will must be signed by its testator

A

before two or more witnesses, who must also sign the document.

45
Q

To be valid, a deed must name

A

a grantee.

The person to whom the property is being conveyed must be readily identified from the deed itself.

46
Q

Under the covenant of quiet enjoyment, a grantor

A

ensures that the title will be good against the title claims of third parties.

Quiet enjoyment means freedom from claims of third parties—persons other than grantor and grantee.

47
Q

A sale to satisfy delinquent tax or mortgage liens is an example of

A

involuntary alienation

A sale to satisfy delinquent tax or mortgage liens is an example of involuntary alienation.

48
Q

Which type of deed is used by a grantor whose interest in the real estate may be unknown?

A

Quitclaim deed

A quitclaim deed transfers whatever interest the grantor may have. If the grantor has no interest, the grantee will acquire nothing and have no right of warranty claim against the grantor.

49
Q

In front of witnesses, a property owner says to a friend, “I never made a will, but I want you to have my property when I die.” If the friend becomes the owner of the property, it is because the state recognizes what kind of will?

A

Nuncupative

A nuncupative will is an oral will. A holographic will is completely handwritten. A testamentary trust is established by will after the owner’s death. Probate is the process of determining the validity of the will and distributing the assets of the estate

50
Q

When a person dies, ownership of real estate

A

passes immediately.

When a person dies, ownership of real estate immediately passes either to the heirs by descent or to the persons named in the will. Before full title and possession of the property may be taken, the estate must go through a judicial procedure called probate.

51
Q

A 15-year-old recently inherited a parcel of real estate and has decided to sell it. If the 15-year-old executes a deed conveying the property to a purchaser, such a conveyance would be

A

voidable.

Real estate contracts entered into by minors are generally voidable by the minor until the minor reaches the age of majority—18 in most states—or shortly thereafter.

52
Q

A bargain and sale deed contains how many express warranties?

A

0

A bargain and sale deed contains no express warranties against encumbrances; however, it does imply that the grantor holds title and possession of the property.

53
Q

In a special warranty deed, the grantor promises

A

to defend the title against any encumbrances during the grantor’s period of ownership.

A special warranty deed promises that while the seller owned the property, the seller did not cloud the title. The seller only defends against clouds on title that may have occurred during the seller’s ownership period.

54
Q

When conveying interests in real estate using a quitclaim deed, the extent of promises given by the grantor to the grantee are

A

none.

A quitclaim deed gives no warrants to the grantee. Claims during the grantor’s ownership would be covered by a special warranty deed. A general warranty deed provides the same warranties as a special warranty deed but also covers claims made before the grantor’s ownership of the property. No deed requires the grantor to supply title insurance.

55
Q

A bank wants to convey title to a foreclosed property but does not want to give any title warranties or have any future claims or liabilities. Which type of deed should the bank use?

A

Quitclaim deed

A quitclaim deed conveys the grantor’s interest but contains no warranty that the grantor even has any interest.

56
Q

In one state, the transfer tax is $0.80 per $500 or fraction thereof. There is no tax charged on the first $500 of the price. What tax must the seller pay if the property sells for $329,650?

A

$527.20

The seller must pay $527.20:

$329,650 – the $500 = $329,150

$329,150 ÷ $500 = 658.3, rounded up to 659 659 × $0.80 = $527.20

57
Q

The grantee receives greatest protection with what type of deed?

A

General warranty

In the general warranty—often just called warranty—deed, the grantor makes more promises and gives the grantee more covenants than in any other deed

58
Q

The process of probate is

A

a formal judicial process.

Probate is a legal procedure for verifying the validity of a will and accounting for the decedent’s assets. The process can take several months to complete.

59
Q

All of these are necessary to a valid deed EXCEPT

A

the grantee’s signature.

The grantee does not need to sign the deed, because the grantee receives the property.

60
Q

A modification to a will is called

A

a codicil

Any modification to a previously executed will is contained in a separate document called a codicil. Additional agreements attached to an agreement of sale are addenda; an amendment is a change to the existing content of a contract. Probate is the process of determining the validity of a will.

61
Q

Transfer of property by foreclosure of a mortgage loan is

A

involuntary transfer.

Involuntary transfers are usually carried out by operation of law—such as by condemnation, foreclosure of a mortgage loan, or a sale to satisfy delinquent tax or mortgage liens.

62
Q

A grantor conveys property by delivering a deed. The deed contains five covenants. This is MOST likely

A

a general warranty deed.

A general warranty deed contains covenants of seisin, further assurance, quiet enjoyment, freedom from encumbrances, and warranty forever.

63
Q

A sale to satisfy delinquent tax or mortgage liens is an example of

A

involuntary alienation.

64
Q

Title to real estate means the right to or ownership of the land and represents the owner’s

A

bundle of legal rights and also serves as evidence of ownership.

65
Q

P signed a deed transferring ownership of P’s house to Q. To provide evidence that P’s signature was genuine, P executed a declaration before a notary. This declaration is known as

A

an acknowledgment.

P gave this acknowledgment as to the validity and voluntary nature of P’s signature to a notary. The notary took P’s acknowledgment and attached a seal.

66
Q

For a deed to be recorded, MOST states require that it be

A

acknowledged.

Having the deed notarized or acknowledged shows that the grantor freely signed the document.