Chapter 8 Contracts and Transferring Real Estate Interests

1. Chapter 8Contracts and Transferring Real Estate Interests “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

2. Major Topics • Documents used to transfer title to real estate • Concept of “good title” to real estate • Insuring the title to real estate • Transferring the title to real estate • Requirements for transferring title under a sales contract • Types of Leases • Landlord Tenant Laws • Triple Net vs. Gross leases • Sale-Leasebacks • Leases with purchase options • Important Lease Clauses “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

3. Introduction to Deeds Deed “A written instrument used to convey title to real estate” Requirements for a valid Grantor • Age of capacity • Sufficient mental capacity “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

4. Introduction to Deeds (Contd.) Requirements for a valid deed Grantors & Grantees must be identified Grantor’s Signature is required, and signatory’s authority authenticated (Power of Attorney) Consideration Words of Conveyance Legal Description of the property Acknowledgement (Notary’s seal) Deed must be delivered “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

5. TYPE OF DEEDS • Quitclaim Deed • General Warranty Deed • Special warranty Deed • Judicial Deed “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

6. Real Estate Title Transfer Most common method is the “sales contract” with underlying agreement between buyer and seller, which satisfy the following Common Law requirements: • The Offer • The acceptance • Consideration • Written evidence “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

7. Invalidating Contracts Major reasons • “Capacity” • Lack of full information • Material Defect • Undue Influence • Duress “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

8. Transferring Title to Real Estate • By Inheritance • By Adverse Possession • Transferring Title to the Public: Eminent Domain “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

9. Temporary Transfer: Leases • Leases are a class of real estate that include possession but no ownership • Long term leases can be just like ownership in the sense of having almost permanent possession Forms of Tenancy • Tenancy for years • Periodic Tenancy: Month-to-month lease • Tenancy at will • Tenancy at Sufferance “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

10. Landlord Tenant Rights • “Uniform Residential Landlord and Tenant Act • Security Deposit and Interest • Landlord’s obligations: • Allow the tenant “Quiet Enjoyment” • Keep property fit for occupancy • Make timely repairs (unless these are the responsibility of the tenant as stated in the lease) “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

11. Commercial Leases • Base Rent Rent paid by tenant to landlord • Gross Lease Landlord pays all operating expenses • Net Lease Tenant pays certain defined expenses • Triple Net Lease Tenant pays for all operating expenses “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

12. Commercial Leases (Contd.) • How Rents May be Increased or Escalated • Ground Lease • Sale Leaseback • Lease with Purchase Options • Lease with Purchase Options “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

13. END “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner