Methods of Transfer and Conveyance in Real Estate

Common methods of transfer

• Form of property ownership

• Sale

• Gift

• Part gift/part sale

• Distribution from trust

• Distribution from estate-wills/intestacy

• Court order

• Other

Requirements for a Gift

• Donative’s intent by the donor or grantor

• Delivery of the gift

• Acceptance by the donee or grantee

Requirements for a Valid Deed

• Grantor with legal capacity

• Signature of the grantor

• Grantee named with reasonable certainty

• Recital of consideration

• Words of conveyance

(continued)

Requirements for a Valid Deed

• Habendum or type of interest conveyed

• Description of land conveyed

• Acknowledgment

• Delivery

• Acceptance

Types of Deeds

• Quitclaim deed

• Warranty deed

• Special warranty deed

• Deed of bargain and sale

• Judicial deed

The Common Law Warranties of the Grantor

• Warranty of seisin

• Warranty of right to convey

• Warranty of freedom from encumbrances

• Covenant of warranty

• Warranty of quiet enjoyment

• Warranty of further assurances

Modern Warranties of Grantor

• The grantor possesses an indefeasible fee simple estate, or the grantor has good title and the transfer is proper.

• There are no encumbrances against the property except those specifically noted.

• The grantee shall have quiet enjoyment of the property, and the grantor will warrant and defend title against all claims.

Requirements for Adverse Possession

• Actual and exclusive possession

• Open, visible, and notorious possession

• Continuous and peaceable possession

• Hostile and adverse possession

• Possession for the required statutory period

Types of Recording Statutes

• Race– First to record (first in time, first in right)

• Notice– Last bfp to take title (failure of others to record)

• Race/Notice – First bfp to record

Not required to transfer: required for future protection

Title Insurance

• An insurance contract-covered risks/exclusions

• Does not transfer from seller to buyer

• Purchased by buyer

• Covers property not person

Scope of Title Insurance

• Failure of title to the property (covers forgery, fraud, unauthorized signatures, electronic recording failure and a host of other problems that arise in recording titles to property and executing deeds)

• Defects in title such as liens

• Lack of right of access

• Unmarketable title

• Encroachments

Other Portions of Title Policies

• Exclusions – Outline those items not covered

• Schedules, generally A and B – Outline the added protections or endorsements purchased

by the policy holder and exclusions

• Conditions– Requirements for the issuance of the policy, such as

removal of liens

• Stipulations – Certain statements of fact that the parties agree upon

Exclusions from Title Policies

• Violations of environmental laws unless recorded in the public records

• Litigation defense costs for items excluded under schedule B exceptions

• Purchasers who are not bona fide purchasers

• Problems noted in public records other than those that are part of the property records designated by the state as the proper filing place for matters affecting property

• (Continued)

Exclusions fromTitle Policies

• “Unmarketability of title” items

• Problems with title based on usury

• Mechanic’s liens that arise from work contracted for and commenced after the date of the policy

• Eminent domain rights unless there is notice in the public records of eminent domain proceedings prior to the title policy being issued