Presentation on theme: "Chapter 14 Methods of Transfer and Conveyance in Real Estate"— Presentation transcript:
1Chapter 14 Methods of Transfer and Conveyance in Real Estate
2Types of Deeds Quitclaim deed Warranty deed Special warranty deed. Warranty only applies as to the time of ownership by the seller.Deed of bargain and sale. Same as a Special Warranty deedJudicial deed2
3Requirements for a Valid Deed Grantor with legal capacitySignature of the grantorGrantee named with reasonable certaintyRecital of considerationWords of conveyanceHabendum or type of interest conveyedDescription of land conveyedAcknowledgmentDeliveryAcceptance3
4Transfer of Title to Real Property WritingDeedsDeliveryTransfer is properTitle is good1. WarrantyQuiet enjoymentFree from encumbrances(continued on next slide)4
5Transfer of Title to Real Property 2. Special WarrantyWarranty for time of ownership3. Bargain and sale4. QuitclaimTransfers title to the extent grantor has title5
6Howe v. Palmer (#X) Undue Influence Howe – Owner of Farm. Howe inherited a from his mother. Howe was married to Esther, but Esther was not on the deed.Simple Man – Severe Dyslexia. Howe was a simple man with severe dyslexia that was easily influenced.Palmer Befriended Howe. Palmer became Howe’s friend. Palmer moved in with Howe to share expenses. Palmer helped clean the farm up but had a tag sale where he kept the proceeds.Palmer Said Howe Owed Him. Palmer said Howe owed him $20,000-$25,000 for his work on the farm, although no contract or even understanding was in place that Howe would pay Palmer for help in cleaning the farm. Palmer actually intimidated and forced Howe to sell items he did not want to sell.Howe Gave ½ the Farm to Palmer. Palmer then forced Howe off the farm and he ended up living on a trailer of the farm he worked.Howe Sued.
7Consider 14.1: Undue Influence? House-Keeper. Iver and Mary Villa hired Ary as a house-keeper.Elevated to Care-Giver. Mary died and Iver’s health deteriorated to the point he hired Ary to be a caretaker as well as a house-keeper.Will Leaves Money to Kids. Iver had a will naming his kids as beneficiaries.New House Jointly Owned with Care-Giver. He built a new house worth $350,000 and named Ary as a joint tenant. He also expected problems and gave Ary $5,000 to fight legal issues with the grant of joint tenancy.Undue Influence? Iver died and his daughter, as the personal representative brought suit against Ary and the conveyance on the grounds of undue influence.
8Allen v. Scott, Hewitt & Mize (#X) 186 SW3d 782 (MO App 2006), p. 370 Land Sold to Individual with Right to Assign. Allen sold land to Scott personally with an understanding that property would be assigned to Scott, Hewitt & Mize.At Closing, Assigned. Assignment took place but company did not legally exist due to improper filing with the state.Lawsuit.Improper Assignment as LLC Did Not Exist.Mistake as to Value. Scott, Hewitt and & Mize listed property at $1,000,000 after just buying it for $90,000 and Allen sued to have the deal rescinded based on the fact that the company did not exist when the property was conveyed.
9Grantor Capacity, Identification, and Signatures 9
10Diversified International Properties v Diversified International Properties v. Lucas (#X) 2008 WL (Ohio App 5 Dist)Divorce and Quickclaim Deed. Wife signed a quickclaim deed to property to husband. A notary was not present. Husband had friend notarize it later.Deed Recorded.Wife’s Attorney Sued for Recovery of Property. The wife owed the law firm $25,000 for legal fees.Improper Notary. But, the wife signed of her own free will.“Clean Hands” Doctrine.
11The Common Law Warranties of the Grantor Warranty of seisinWarranty of right to conveyWarranty of freedom from encumbrancesCovenant of warrantyWarranty of quiet enjoymentWarranty of further assurances11
12Modern 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.12
132012 Star Tribune Article: What rights does Barone have? Marc Barone bought a double-wide trailer on 10 acresThe trailer is actually on neighbors property and his 10 acres is too wet to build on.Previous owner built the home and lived there for 8 yearsProblem discovered when assessor bumped real owner’s land value because of home on it shortly after Barone bought it.
14Consider 14.5: Adverse Possession. Pepkas owned Outlot 37 and part of Outlot 40Pepkas believed they owned the land where they built a driveway.Pepkas improved the driveway by first putting gravel on it and then asphalt. Pepkas also planted 6 trees along the driveway creating a line.The Pepkas and Dews got along well, until the Pepka’s decided to sell and a survey was done.Pepkas offered to purchase the strip, unsuccessfully.Lawsuit for adverse possession.PepkaOutlot 37DewsOutlot 40Pepka’s land on outlot 40
15Adverse Possession End-of-chapter Q9 Adverse possession – airstrip. Used for 40 year by plaintiff and others.Adverse possession?Adverse PossessionPlanted Grass on Contested Strip. IN 1970, Dan Juttings dad planted grass on a strip of his lot, including a 10 foot border between the house and the neighbor’s house.The father also planted two trees on the strip and a clothesline.From 1970 until 1998, Juntting’s father mowed and otherwise maintained the strip.1997 Survey. In 1997, the son bought the property and a survey was done showing the boundaries where everyone expected.1998 Survey. In 1998, the neighbors had a survey completed that revealed a 10 foot mistake in the line, putting the line within inches of the house. Jutting continued to mow and maintain the lawn.Fence Erected. Henrix erected a fence that when within an inch of the house.HendrixJuittings10 foot strip
16Weinstein v. Hurlbert Adverse Possession Disputed Boundary.Time of Possession and then new owner until 2008.Adverse Acts – Summer home and these only occurred in the summerMowing lawnMaintenance and replacement of Rosa Rugosa bushesParking of boats on propertyRemoval of sign from new owner in 2008 that staked propertyIs that adverse enough
17Consider 14.4: Adverse Possession. The Kapinskis owned and occupied lot 18 from 1935 to 1950.IN 1950 the lot was conveyed to Wyroskis.The Laurins purchased lot 19 in 1954.The lots were used as summer homes.Lot 18 planted lilacs and put a boat house that was over the boundary line.The Wyroski’s claim they now own the extra land through adverse possession.Wyroskis PropertyLot 18Laurins PropertyLot 19Lake
18Requirements for Adverse Possession Actual and exclusive possessionOpen, visible, and notorious possessionContinuous and peaceable possessionHostile and adverse possessionPossession for the required statutory period18
19Number of Years Required for Adverse Possession (Fig. 14-2) StateYearsAlabama 20Alaska 10Arizona 10Arkansas 7California 5Colorado 18Connecticut 15Delaware 20Dist. of Col. 15Florida 7Georgia 20Hawaii 20Idaho 5Illinois 20Indiana 10Iowa 10Kansas 15Kentucky 15Louisiana 30Maine 20Maryland 20Mass. 20Michigan 15Minnesota 15Mississippi 10Missouri 10Montana 5Nebraska 10Nevada 5New Hamp. 20New Jersey 30New Mexico 10New York 10N. Carolina 20North Dakota 20Ohio 21Oklahoma 15Oregon 10Pennsylvania 21Rhode Is. 10South Carolina 10South Dakota 20Tennessee 7Texas 3Utah 7Vermont 15Virginia 25Washington 7West Virginia 10Wisconsin 20Wyoming 40These figures represent a general time period. Many states have variations depending on issues such as deed, etc. For example, Texas periods run from 3 to 25 years.19
20Requirements for a Gift Donative’s intent by the donor or grantorDelivery of the giftAcceptance by the donee or granteeConsider 14.6 – Transfer to DaughterGift of House to Daughter. Mary Blettell was in poor health and went to live with her daughter. Mary’s second husband continued to live in Mary’s home. Mary instructed her daughter to bring her deed to her and she signed it over to her daughter. She asked her daughter to put the deed in a safe deposit box until she died.Daughter Recorded Deed When Mother Died.Mary’s Heirs Filed Suit20
21Consider 14.1 Corporate Owner of Property. Confusing Deed Conveyance. THIS DEED OF CONVEYANCE, made and entered into this 8th day of April, 1975, between LOGAN MIDDLETON, President of the V.T.C. Lines Incorporated, Harlan, Harlan County, Kentucky, party of the first part, and JOHN CHRISTIAN, Evarts, Harlan, County, Kentucky, party of the second part.Signature Line:/s/Logan MiddletonLogan Middleton, PresidentV.T.C. Lines, IncorporatedIssue: A creditor of V.T.C. Lines is suing that the conveyance is invalid.
22Types of Recording1 Statutes RaceFirst to record (first in time, first in right)NoticeLast bona fide good faith purchaser (bfp) to take title (failure of others to record)Race/NoticeFirst bfp to recordNotice/Race1Not required to transfer: required for future protection22
23Title Insurance Does not transfer from seller to buyer Purchased by buyerCovers property not personSingle premium23
24Scope 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 liensLack of right of accessUnmarketable titleEncroachments (new in 2006)Does not cover known deficiencies in title24
25Other Portions of Title Policies ExclusionsOutline those items not coveredSchedules, generally A and BOutline the added protections or endorsements purchased by the policy holderConditionsRequirements for the issuance of the policy, such as removal of liensStipulationsCertain statements of fact that the parties agree are part of their assumptions for the policy, such as the new definition of what constitutes a “public record”25
26Exclusions from Title Policies Violations of environmental laws unless recorded in the public recordsLitigation defense costs for items excluded under schedule B exceptionsPurchasers who are not bona fide purchasersProblems 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 on the next slide)26
27Exclusions from Title Policies “Unmarketability of title” itemsProblems with title based on usuryMechanic’s liens that arise from work contracted for and commenced after the date of the policyEminent domain rights unless there is notice in the public records of eminent domain proceedings prior to the title policy being issued27