Title
A person who owns property is said to have title to it.
Title defects
("Clouds" on title) "Problems with a real property owner's title"
A common reason for using a quitclaim deed is to clear up title defects, which are often referred to as clouds on the title.
Clouds are problems appearing in the public record that cast dou
Marketable title
Title that is free from serious defects
Alienation
The process of transferring ownership of (title to) real property from one party to another"
"May be either voluntary or involuntary"
All of the different methods by which real property can be transferred from one person to another.
Whether accomplished
Voluntary alienation
Occurs when an owner deliberately transfers title to someone else."
"Voluntary alienation of real property includes the transfer of title by patent, by deed, or by will.
Involuntary alienation
A transfer of property without any action by the owner, as a result of the operation of law."
"Involuntary alienation of real property can be the result of rule of law, adverse possession, or accession.
Alienation by rule of law includes dedication, inte
Patents
To transfer real property into private hands, the government gave an individual or a company a document called a patent.
Grant by a sovereign
"Title to land is transferred from the government to a private party by a document"
"Title to all real property o
Deeds
A deed is the document a private landowner uses to transfer real property to someone else.
"The most common form of voluntary alienation is transfer by deed."
"A written instrument that, when properly executed, delivered, and accepted, conveys title or ow
Grantor
The owner of real property with a deed"
To satisfy the statute of frauds, a deed must be in writing and signed by the grantor.
A deed must be signed by the grantor. A deed without the grantor's signature is ineffective, even if it has all of the other el
Grantee
A party that is receiving all or part of a grantors interest in real property"
The grantee does not sign the deed.
The grantee does not need to be competent.
He only needs to be alive or in existence at the time of conveyance.
"A grantor conveys real prop
Conveyance
The process of transferring real property from the grantor to the grantee by deed"
A valid deed must include words of conveyance, sometimes called a granting clause.
The deed must explicitly state in some way that the property is being transferred from t
Deeds most often in California are?
1. grant deed,
2. the quitclaim deed,
3. the trustee's deed,
4. deeds executed under court order
Grant Deed
The most commonly used deed in California."
A grant deed must use the term "grant" in its words of conveyance.
Carries two warranties:
1. The covenant of the right to convey (Grantor has not previously conveyed title to anyone else),
2. The covenant agai
A grant deed uses the term "grant" in its words of conveyance and carries two warranties:
1. "the grantor has not previously conveyed title to anyone else, and
2. the grantor has not caused any encumbrances to attach to the property other than those already disclosed."
"Both apply even if they are not expressly stated in the grant deed"
The wo
Warranties and covenants
Promises
"May be stated in the deed if the parties so desire
Quitclaim Deed
A quitclaim deed offers no warranties, conveys no after-acquired title, and creates no liability for the grantor.
It is typically used to clear away clouds on title.
"A deed that conveys and releases any interest in a piece of real property that the grant
Reformation deed
When used to cure a cloud on the title, a quitclaim deed is sometimes called a reformation deed.
"Perhaps one of the parties' names was misspelled, or the land description was inaccurate. A quitclaim deed used in this way
Trustee's Deed
Property is foreclosed under a deed of trust, the trustee conveys the property to the buyer at the foreclosure sale with a trustee's deed.
When a deed of trust is foreclosed on, a trustee's deed is used to convey title.
The trustee's deed states that the
Deeds Executed by Court Order
Used to convey title after a court-ordered sale of property.
A common example is the sheriff's deed used to transfer property to the highest bidder at a court-ordered foreclosure sale"
"Usually states the exact amount of the purchase price approved by th
Warranty deed
Rarely used in California"
"Title insurance has made it largely unnecessary for buyers to rely on deed warranties"
"Gives the greatest protection to a real estate buyer.
The grantor makes five basic promises, or covenants, to the grantee.
These covenants
Special warranty deed (General warranty deed)
Rarely used in California", but in some other states it's the most commonly used type of deed
(In California, deed warranties have effectively been supplanted by title insurance as a way of assuring buyers of marketable title.)
"Title insurance has made
Requirements for a Valid Deed
A deed will transfer title only if it meets the legal requirements for validity. To be valid, a deed must:"
1. be in writing,
2. identify the parties,
3. be signed by a competent grantor,
4. have a living grantee,
5. contain words of conveyance (the gran
In Writing
Statute of frauds is a state law that requires certain contracts and other legal transactions to be in writing.
With only a few minor exceptions, the statute of frauds applies to any transfer of an interest in real property.
An unwritten deed cannot tran
Statute of frauds
State law that requires certain contracts and other legal transactions to be in writing"
Under the statute, an oral conveyance of title to real property is not valid.
Identification of the Parties
Both the grantor and the grantee must be identified in the deed.
The name of the grantee is not required, as long as an adequate description is given; for example, "John T. Smith's only sister."
The grantee may also take title under a fictitious name.
A
Signed by a Competent Grantor
A grantor must be legally competent when she signs the deed.
This means that the grantor must be an adult (at least 18 years old) and must be of sound mind.
If the grantor is not legally competent, the deed is not valid."
"In addition to requiring a deed
Attorney in fact
An attorney in fact (not necessarily a lawyer) is someone the grantor has appointed to act on her behalf in a document called a power of attorney."
"A deed can also be signed by the grantor's attorney in fact
Power of attorney
Must include a description of the property and specifically authorize the attorney in fact to convey it.
It should be recorded in the county where the property is located.
Note that the law does not allow an attorney in fact to deed his principal's prope
Living Grantee
The grantee does not have to be legally competent in order for the deed to be valid.
It is only necessary for the grantee to be alive (or, if the grantee is a corporation, legally in existence) and identifiable when the deed is executed.
Words of Conveyance
The requirement of words of conveyance, the granting clause, is easily satisfied.
The single word "grant" or a similar word is sufficient.
Additional technical language generally should be avoided, since it adds nothing to the validity of the deed.
Description of the Property
A valid deed must contain an adequate description of the property to be conveyed.
The full legal description should always be used, although a deed can be valid without that, as long as it has a description that makes it possible to identify the property
Acknowledgment, Delivery, & Acceptance
In addition to a valid deed, a proper conveyance of real property also involves acknowledgment, delivery, and acceptance of the deed.
Acknowledgment
A formal declaration made before an authorized official, such as a notary public or county clerk, by a person who has signed a document; he states that the signature is genuine and voluntary."
"Occurs when the grantor swears before a notary public or oth
Delivered
Delivery must occur while the grantor is alive."
The grantor must have the intention of immediately transferring title to the grantee.
"Example: After Sam Wiggins died, a deed was found in his safe "deposit box.
The deed granted Sam's farm to his nephew,
Nonessential Terms
There are some elements that should be included in a deed even though they aren't legally required. "
1. Habendum clause
2. Exclusions & reservations clause
3. Recital of consideration
4. Grantor's seal
5. Warranties
6. Technical terminology
"The date of
Habendum clause
("To have and to hold" clause), which states the nature of the interest the grantor is conveying.
A deed defines or limits the type of estate that is being transferred to the grantee.
If there is no habendum clause, the deed is presumed to convey a fee s
Exclusions & reservations clause
A list of any encumbrances (easements, private restrictions, or liens) that will burden the grantee in taking the title.
However, valid encumbrances usually remain in force even if they aren't listed in the deed.
Recital of consideration
To indicate that the transfer is a purchase instead of a gift.
Many deeds include a recital of consideration as an indication that the conveyance was not a gift to the grantee.
(If the transfer were a gift, the grantee might be vulnerable to the claims o
Wills
The written declaration of an individual that designates how her estate will be disposed of after death."
A will (or testament) is a legal document in which a person specifies how his property is to be distributed when he dies."
Valid Will
1. In writing
Testator
The person who makes a will
Testate
Someone who leaves a valid will when he dies is said to have died testate
Intestate
Someone who dies without a valid will is said to have died intestate
Beneficiaries
Those who receive property through a will are called the beneficiaries."
A person who is bequeathed personal property in a will is a legatee.
A person who is devised real property in a will is a devisee.
Bequest
(Legacy) "A gift of personal property in a will"
A transfer of personal property by will is called a bequest, and the recipients are called legatees.
A testator bequeaths personal property to a legatee.
Ex. "A testator bequeaths personal property to legat
Devisee
A gift of real property in a will"
Ex. "A testator devises real property to devisees
Codicil
An amendment to a will
Legal Requirements
Under California law, a will generally must be:
1. in writing,
2. signed by the testator,
3. attested to by at least two competent witnesses.
Holographic will
One where all of the material provisions as well as the signature are in the testator's own handwriting.
A holographic will may be valid even though it was not signed in the presence of witnesses.
If any portion of an otherwise
valid holographic will is
Probate
Probate is the legal procedure for establishing the validity of a will and distributing property according to the terms of the will.
"The legal procedure for proving the validity of a will and carrying out the testator's directions.
Note that a will does
Executor
Under the court's supervision, the estate property is managed and distributed to the beneficiaries by an executor appointed in the will."
It is the executor's responsibility to carry out the terms of the will after the testator's death.
Administrator
If the testator did not name an executor, the probate court will appoint an administrator to perform those functions.
Personal representative
Either an executor or an administrator may be referred to as the testator's personal representative.
Involuntary Dedication
Dedication is the transfer of real estate from private ownership to public ownership, without payment to the private owner.
As we've discussed, it's called dedication when private property is transferred to public ownership, without compensation to the pr
Statutory dedication
As we've discussed, it's called dedication when private property is transferred to public ownership, without compensation to the private owner.
While dedication can be a voluntary gift, in many cases the transfer is made under some legal constraint.
It is
Common law dedication
The usual requirement for common law dedication is the owner's acquiescence in the public's use of her property for a prolonged period of time.
If property has been used by the public long enough, a government entity can pass an ordinance accepting a com
Intestate Succession
When someone dies intestate (without a valid will), the law provides for the distribution of his property"
"The order of succession varies from state to state, but in general the property passes first to the surviving spouse, then to any surviving childr
Heirs
Persons who take property by intestate succession
Descent
Those who receive property by intestate succession are said to have received property by descent, rather than by devise or bequest.
Intestate succession is supervised by the probate court.
The court appoints an administrator, who is responsible for distr
Escheats
Title to the property passes to the state government"
"If a person dies intestate and the probate court is unable to locate any heirs, then the intestate person's property escheats."
"The reversion of property to the state when a person dies without leav
Condemnation
The legal process used to acquire property by eminent domain"
"The act of taking private property for public use under the power of eminent domain
Eminent domain
The government has the constitutional power to take private property for public use, as long as it pays the owner for the property."
"The power of eminent domain can be exercised only if two requirements are met:
1. The intended use must be a public use�
Inverse Condemnation
If a property owner feels that his property has been taken or damaged by a public entity, the owner may file a lawsuit called an inverse condemnation action to force the government to pay the fair market value of the property.
Court Decisions
Title to property can be conveyed by court order in accordance with statutes and common law precedents.
The most common forms of court action affecting title to property are:
1. quiet title actions,
2. suits for partition,
3. foreclosures,
4. bankruptcies
Quiet Title
A cloud on a property owner's title can often be cleared away by having the potential claimant sign a quitclaim deed, which releases any interest he might have.
In situations where that solution is unavailable, the property owner may file a quiet title a
Partition
A suit for partition is a way to end co-ownership and divide the property. "
"Sometimes co-owners of property can't agree about what should be done with it.
For example, one might want to sell the property, but the others refuse to; or they may all want
Foreclosure
Someone who holds a lien against real property may force the sale of the property if the debt secured by the lien isn't paid.
Foreclosure is available for any type of lien that attaches to real property, including mortgages, deeds of trust, mechanic's li
Bankruptcy
Property may also be conveyed by order of a bankruptcy court.
Once a bankruptcy petition is filed, the court has the authority to distribute the eligible property of the debtor in order to satisfy creditors' claims.
The debtor's real property may be sold
Adverse Possession
A means by which a person may acquire title to property by using it openly and continuously without the owner's permission for the required statutory period."
"Another form of involuntary alienation, is the process by which possession and use of property
Requirements
In California, there are five basic requirements for adverse possession. Possession of the land must be:
1. actual, open, and notorious,
2. hostile to the owner's interest,
3. under claim of right or color of title
4. continuous and uninterrupted for a s
Actual, Open, & Notorious
Actual possession means occupation and use of the property in a manner appropriate to the type of property in question.
Residence on the property is not required unless residence is the appropriate use."
"Actual possession of farmland may be achieved by
Hostile
The adverse possessor must intend to claim ownership of the property and defend that claim against all parties.
Hostile intent is proven by the adverse possessor's actions.
If the adverse possessor uses the property in the same fashion as an owner would
Claim of Right or Color of Title
The adverse possessor must have a good faith but mistaken belief that she is the owner of the land."
Ex.: "One who takes possession under an invalid deed. In that situation, the adverse possessor may acquire title to all the property described in the def
Continuous & Uninterrupted; Payment of Taxes
An adverse possessor must have continuous and uninterrupted possession of the property for the length of time prescribed by state statute.
In California, the possession must be continuous and uninterrupted for five years, and the adverse possessor must p
Tacking
The periods of possession of successive adverse possessors can be added together to equal the statutory time period"
Ex.: "Tanaka adversely possesses property for four years, then transfers possession to White, who possesses the property for three years.
Perfecting Title
Since an adverse possessor's interest is not apparent from the public record, he must take additional steps to establish marketable title.
Unless the true owner is willing to provide a quitclaim deed, the adverse possessor will have to file a quiet title
Accession
Any addition to real property from natural or artificial causes.
An addition to one person's property sometimes involves the involuntary alienation of another person's property.
This type of involuntary alienation may occur as a result of one of these nat
Accretion
Waterborne soil may be deposited on land beside a body of water.
The deposited soil is called alluvion or alluvium, and the process is called accretion.
When riparian or littoral land is slowly enlarged in this way, the riparian or littoral owner acquire
Reliction
The water in a stream or lake may gradually recede; this retreat from the land is called reliction, or sometimes dereliction.
When riparian or littoral land is enlarged by the gradual retreat of the body of water, the landowner acquires title to the newl
Avulsion
Accretion and reliction are both gradual processes.
By contrast, avulsion occurs when land is violently torn away by flowing water or waves and deposited somewhere else, or when land is exposed by a sudden change in a watercourse.
Avulsion doesn't necess
Recording
Once an interest in property has been transferred (voluntarily or involuntarily), the new owner may protect his interest by having the deed or other document of conveyance recorded.
When a document is recorded, it is placed in the public record, so that
Recording Procedures
Filing a copy of the deed or other document at the county clerk's office (or recorder's office) in the county where the property is located.
Documents are recorded chronologically, in the order in which they were filed for recording.
Each recorded docume
Title search
When someone is considering buying a particular piece of property, a title search is performed to determine the validity of the seller's title and find what other claims there are against the property.
"An inspection of the public record to determine all
Chain of title
This includes tracing the chain of title (the series of recorded deeds that transferred the property from one owner to the next) back in time far enough to establish whether the seller is the true owner."
"A complete history of all of the recorded intere
Lis pendens
A notice of pending legal proceedings that may affect property
The Legal Effects of Recording
Having a document recorded has two extremely important legal consequences.
It provides notice of the interest conveyed in the document, and it establishes the priority of that interest.
Notice
Many legal issues depend on whether a person had notice of certain information.
If someone had notice of a particular fact, that means he knew or should have known it, and that may affect his legal rights.
There are two main types of notice:
1. actual not
Actual notice
Straightforward.
A person has actual notice of a fact if she actually knows about it.
She personally observed it, read about it, or was told about it.
Constructive notice
A person has constructive notice of a fact if, in the eyes of the law, she should have known about it, whether or not she actually did."
"Notice of a fact that a person is held by law to have (as opposed to actual notice). She had the opportunity to disc
Subsequent good faith purchaser without notice
A grantee who fails to record his deed can lose title to a subsequent good faith purchaser without notice: someone who later buys the property in good faith and without actual or constructive notice of the earlier conveyance.
In a conflict between two pu
Wild Deeds
A recorded deed that is outside the chain of title"
"In some situations, even though a document has been recorded, it is not part of the chain of title for the property."
"A wild deed won't necessarily be discovered in a standard title search."
"The gene
Possession and Notice
Possession of the land by someone other than the seller gives notice to the buyer that the possessor may have an interest in the property, and the buyer then has a duty to inquire into the matter further."
"This is sometimes called "inquiry notice" or "i
Title report
After the title search is completed, the title company prepares a title report describing the condition of the title.
The report lists all defects and encumbrances of record; these items will be excluded from the policy coverage.
"A report issued after a
Types of Title Insurance
Title insurers in California generally use policy forms published by the California Land Title Association (CLTA) & the American Land Title Association (ALTA). "
"Title insurance policies can be categorized in two basic ways:
1. According to what interes
Interest Insured
A title insurance policy is designed to insure the particular interest that the policy holder has in the property."
"An ordinary residential transaction typically involves two title insurance policies: an owner's policy to protect the buyer, and a lender
Owner's policy
An owner's policy provides title insurance coverage for the buyer, the new owner of the property.
"An owner's policy insures the title of the property buyer (the new owner)"
"Has traditionally been standard coverage.
Now, however, the owner's policy in a
Lender's policy
(Also called a mortgagee's policy) protects a lender's security interest, insuring the lender's lien priority"
A mortgagee's policy provides title insurance coverage to protect the lender's security interest.
Leaseholder's policy
Insures only the validity of a lease
Extent of Coverage
In California, as in other states, title insurers have traditionally offered two main types of coverage:
1. Standard coverage and
2. Extended coverage.
In recent years, these have been joined by a third type,
3. Homeowner's coverage
Standard coverage policy
(Sometimes called a CLTA policy) insures against defects in title, including hidden risks such as forgery.
It does not insure against the interests of a person in actual possession of the property, such as an adverse possessor; against title defects know
Extended coverage policy
(Sometimes called an ALTA policy) insures against all matters covered by the standard policy, plus matters not of public record, such as the rights of parties in possession of the property, unrecorded mechanic's liens, and encroachments."
Coverage:
1. Ma
Homeowner's coverage
Available only in transactions involving residential property with up to four units.
Homeowner's coverage is quite broad.
It covers not only everything that standard coverage does, but also most of the same matters as extended coverage, such as encroachm
Governmental Action
Note that title insurance doesn't protect a policy holder from losses due to governmental action such as condemnation or zoning changes.
That's true no matter what type of coverage is involved.
Abstract of title
A condensed history of the recorded interests in a piece of real property
The process of transferring real property is called:
A. avulsion
B. quitclaim
C. alienation
D. dereliction
C. alienation
The government transfers title to private parties by means of a/an:
A. patent
B. deed
C. quitclaim
D. escheat
A. patent
A grant deed warrants that:
A. no one has adversely possessed the property
B. the grantor has not previously conveyed title to anyone else
C. the purchase price was fair and equitable
D. title has been duly recorded
B. the grantor has not previously conveyed title to anyone else
Clouds on title are usually cleared by:
A. a suit for partition
B. title insurance
C. adverse possession
D. a quitclaim deed
D. a quitclaim deed
A valid deed must refer to a grantee who is:
A. competent
B. over 21 years old
C. identifiable
D. intestate
C. identifiable
Conveyance requires a valid deed, plus:
A. recording
B. delivery
C. acceptance
D. Both b) and c)
D. Both b) delivery & c) addeptance
A person who makes a will is called a/an:
A. grantor
B. executor
C. testator
D. escheat
C. testator
An unwitnessed, handwritten will is called a:
A. formal will
B. holographic will
C. nuncupative will
D. probative will
B. holographic will
The process by which possession of property can result in ownership of the property is called:
A. fee simple
B. succession
C. adverse possession
D. reliction
C. adverse possession
A quitclaim deed conveys:
A. whatever interest the grantor has
B. only a portion of the interest held by
the grantor
C. only property acquired by adverse
possession
D. None of the above
A. whatever interest the grantor has
The main reason why a grantee should make sure the deed gets recorded is to:
A. give constructive notice of her interest in the property
B. show acceptance of the conveyance
C. make the transfer of title effective
D. prevent adverse possession
A. give constructive notice of her interest in the property
To be valid, a deed must:
A. include a recital of consideration
B. be in writing
C. have a habendum clause
D.transfer after-acquired title
B. be in writing
When a cloud on the title cannot be cleared with a quitclaim deed, the type of judicial proceeding initiated to determine ownership is a/an:
A. quiet title action
B. suit for partition
C. interpleader action
D. reformation action
A. quiet title action
All of the following are requirements for adverse possession, except:
A. actual, open, and notorious possession
B. continuous and uninterrupted possession
C. hostile possession
D. tacking
D. tacking
A standard coverage title insurance policy would protect against:
A. adverse possession
B. encroachments
C. a forged deed
D. condemnation
C. a forged deed
After-acquired title
An interest in the property that the grantor acquires after executing the deed
Grant deeds convey after-acquired title.
If the grantor did not own the property when the deed was executed, but acquires title later, then title passes to the grantee.
Sheriff's deed
Used to convey title to someone who purchases property at a mortgage foreclosure sale.
Tax deed
When the government forecloses on property because the property taxes weren't paid, the foreclosure sale purchaser receives a tax deed.
Gift deed
If one party gives property to another, she may use a gift deed.
A gift deed is not supported by consideration, and it is the easiest type of deed for a court to set aside if there is any hint it was executed in order to defraud creditors.
Devise
A transfer of real property by will is called a devise.
A testator devises real property to devisees.
Voluntary dedication
Voluntary dedication is a gift of private property to the public.