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Principles of California Real Estate

Principles of California Real Estate. Lesson 3: Transfer of Real Property. Alienation. Alienation: Process of transferring ownership of real property from one party to another. May be voluntary or involuntary. Alienation Voluntary alienation.

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Principles of California Real Estate

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  1. Principles of California Real Estate Lesson 3: Transfer of Real Property

  2. Alienation Alienation: Process of transferring ownership of real property from one party to another. • May be voluntary or involuntary.

  3. AlienationVoluntary alienation Voluntary alienation: owner voluntarily transfers an interest in his or her land to someone else. Examples: • Patents • Deeds • Wills

  4. Voluntary Alienation Patents Patent: Instrument used to convey government land to a private individual.

  5. Voluntary AlienationDeeds Deed: Instrument which, when properly executed and delivered, conveys title to real property from the grantor to the grantee.

  6. DeedsParties to a deed • Grantor:One who grants an interest in real property to another. • Grantee: One who receives a grant of real property.

  7. DeedsTypes of Deeds • Grant deed • Quitclaim deed • Trustee’s deed • Deeds executed by court order • Warranty deed • Special warranty deed

  8. Types of DeedsGrant Deed Grant deed warrants that grantor has not: • conveyed title to anyone else • caused any undisclosed encumbrances to attach to the property Both warranties apply even if not stated in the deed.

  9. Grant DeedAfter-acquired title Grant deed conveys after-acquired title. After-acquired title: Title acquired by a grantor after she attempted to convey property she didn’t yet own.

  10. Types of DeedsQuitclaim deed • A quit-claim deed: • contains no warranties • does not convey after-acquired title • conveys only the interest held by the grantor at the time it is given

  11. Quitclaim DeedCloud on title Cloud on title: A claim, encumbrance, or apparent defect that makes the title to a property unmarketable. Example: Construction lien filed against the property. A quitclaim deed is often used to “cure” clouds on the title.

  12. Should use the words: release remise quitclaim Should NOT use the words: grant convey Quitclaim DeedLanguage

  13. Types of DeedsTrustee’s deed Trustee’s deed: The deed given to a successful bidder at a trustee’s sale (deed of trust foreclosure sale).

  14. Types of DeedsSheriff’s deed Sheriff’s deed: Used to transfer property to the highest bidder at a court-ordered foreclosure sale of property. • Example: Mortgage foreclosure sale

  15. SummaryPatents and Deeds • Patent • Grant deed • After-acquired title • Quitclaim deed

  16. Requirements of a Valid Deed • In writing • Identify the grantor(s) and grantee(s) • Signed by competent grantor • Living grantee • Contain words of conveyance (granting clause) • Contain adequate description of the property

  17. Requirements of a Valid Deed In writing Under statute of frauds, deed to real property must be in writing.

  18. Requirements of a Valid Deed In writing Under statute of frauds, deed to real property must be in writing. Statute of frauds:Law requiring certain contracts and other legal transactions to be in writing and signed in order to be enforceable.

  19. Requirements of a Valid DeedIdentify grantor and grantee Both the grantor(s) and the grantee(s) must be identified in the deed. Grantee could be described rather than referred to by name. Example: Conrad Adams hereby grants and conveys title to his only son.

  20. Requirements of a Valid DeedSigned by competent grantor Deed must be signed by the individual(s) who will be bound by the transfer—and he, she, or they must be legally competent.

  21. Requirements of a Valid DeedSigned by competent grantor Deed must be signed by the individual(s) who will be bound by the transfer—and he, she, or they must be legally competent. Competent: Of sound mind, for the purposes of entering into a contract, and having reached the age of majority (18).

  22. Requirements of a Valid DeedSigned by competent grantor Illiterate grantor can sign the deed by making his or her mark, but the mark must be accompanied by the signatures of witnesses.

  23. Requirements of a Valid Deed Power of attorney Power of attorney: document authorizing another party (attorney in fact) to act on behalf of the grantor. For attorney in fact to sign deed on grantor’s behalf, the power of attorney must:  • specifically authorize attorney in fact to do so, and • be recorded in the county where the property is located.

  24. Requirements of a Valid DeedTransfer by corporation • Deed transferring title to property owned by corporation must be signed by an authorized corporate official, with the signature accompanied by the corporate seal.

  25. Requirements of a Valid DeedTransfer by corporation • Deed transferring title to property owned by corporation must be signed by an authorized corporate official, with the signature accompanied by the corporate seal. • Authorization must come from a resolution of the Board of Directors. • Even the President or CEO is not authorized to sign the deed without this resolution.

  26. Requirements of a Valid DeedMore than one grantor All grantors must sign deed. • A deed lacking a necessary signature is invalid. • An unnecessary signature does not invalidate the transfer. Signatures of both husband and wife are required to convey community property.

  27. Requirements of a Valid DeedGrantee must be alive Deed recipient must be alive, but need not be competent. • Child (or mentally incompetent person) can receive title to property but can’t convey title. • A corporation can receive title to property because it exists legally.

  28. Requirements of a Valid DeedContain words of conveyance Words of conveyance in a deed are often referred to as a granting clause: the words indicating the grantor’s intent to transfer an interest in property.

  29. Requirements of a Valid DeedAdequate property description Legal description of the property is not an absolute requirement, but including a legal description will ensure the description is adequate.

  30. Requirements of a Valid Deed Acknowledgment, delivery, acceptance For a conveyance to occur, the deed must be acknowledged and delivered by the grantor, and then accepted by the grantee.

  31. Requirements of a Valid DeedAcknowledgment Acknowledgment: Grantor declares to authorized official (i.e., notary public) that he signed deed voluntarily. Official then attests that signature is voluntary and genuine. • Official cannot have an interest in transfer. • Without acknowledgment, deed may be valid—but cannot be recorded.

  32. Requirements of a Valid DeedDelivery Delivery: Legal transfer of deed from grantor to grantee—resulting in transfer of title. • Delivery must take place while grantor is alive. • Grantor must intend to immediately transfer title to grantee.

  33. Requirements of a Valid DeedAcceptance Conveyance is completed when grantee accepts deed.

  34. Requirements of a Valid DeedAcceptance Conveyance is completed when grantee accepts deed. • Deed may be accepted by an agent.

  35. Voluntary Alienation Wills Will: A written instrument disposing of property upon the death of the maker (the testator). Will must be: • in writing • signed by the testator • attested to by at least two competent witnesses

  36. WillsHolographic will Holographic will: A will written, dated, and signed entirely in the testator’s handwriting, and which was not witnessed. • California recognizes holographic wills. Any typewritten or pre-printed provisions in a holographic will be disregarded.

  37. WillsWill terminology Person who receives property under terms of a will is called a beneficiary. • Personal property is bequeathed to a legatee. • Real property is devised to a devisee. Person who carries out will and settles estate is an executor or administrator.

  38. SummaryVoluntary Alienation • Statute of frauds • Grantor • Grantee • Competent • Words of conveyance • Acknowledgement • Delivery

  39. AlienationInvoluntary alienation Involuntary alienation: transfer of property interest against the will of the owner, or without action by the owner. May occur through: • operation of law • natural processes • adverse possession

  40. Involuntary AlienationDedication Dedication: Private party transfers land to the public. • Sometimes voluntary, but is typically required by a public entity.

  41. Involuntary AlienationStatutory dedication Statutory dedication: Involves recording a subdivision map identifying areas dedicated to the public (such as parks and streets). Example: Land developer is required to indicate on her subdivision map where dedicated parks and streets will be located before subdivision is approved.

  42. Involuntary AlienationIntestate succession Intestate succession: When someone dies without a valid will, the decedent’s property passes according to the laws of descent. When there is no will, the decedent’s lawful successors are called heirs instead of beneficiaries.

  43. Involuntary AlienationEscheat When property owner dies without will or any surviving heirs, property ownership escheats (reverts) to the state. • State is ultimate heir when no other rightful heirs to the property exist.

  44. Involuntary AlienationCondemnation Condemnation: Taking private property for public use through power of eminent domain. • Use must be a public use. • Owner must be compensated. Power of eminent domain may be exercised by government, or it can be delegated to quasi-public entities.

  45. Involuntary AlienationCourt order Transfer of interest in property against the owner’s will can also occur under court order. Most common examples:  • Quiet title action • suits for partition • foreclosures

  46. Court Order Quiet title actions Quiet title action: Court action intended to settle dispute about title to a particular property.

  47. Court Order Suits for partition Partition action: Lawsuit brought by a co-owner to have property divided. Once divided, each co-owner will own his or her part in severalty. • Co-owners may also partition property by agreement.

  48. Involuntary AlienationForeclosure Judicial foreclosure: Sale of property pursuant to court order to satisfy a lien (may be any type of lien). Deed of trust foreclosure: sale of property at a trustee’s sale under a power of sale (only available for deed of trust liens).

  49. Involuntary AlienationAdverse possession Adverse possession: Person other than owner of record can acquire title to real property through a long period of continuous possession.

  50. Involuntary AlienationAdverse possession Adverse possession must be: • actual, open, and notorious • hostile to the owner’s interest • under claim of right or color of title • continuous for five years

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