Chapter 14 Methods of Transfer and Conveyance in Real Estate

Types 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 deed Judicial deed 2

Requirements for a Valid Deed Grantor with legal capacity Signature of the grantor Grantee named with reasonable certainty Recital of consideration Words of conveyance Habendum or type of interest conveyed Description of land conveyed Acknowledgment Delivery Acceptance 3

Transfer of Title to Real Property Writing Deeds Delivery Transfer is proper Title is good 1. Warranty Quiet enjoyment Free from encumbrances (continued on next slide) 4

Transfer of Title to Real Property 2. Special Warranty Warranty for time of ownership 3. Bargain and sale 4. Quitclaim Transfers title to the extent grantor has title 5

Howe 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.

Consider 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.

Allen 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.

Grantor Capacity, Identification, and Signatures 9

Diversified International Properties v Diversified International Properties v. Lucas (#X) 2008 WL 5159900 (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.

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 11

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. 12

2012 Star Tribune Article: What rights does Barone have? Marc Barone bought a double-wide trailer on 10 acres The 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 years Problem discovered when assessor bumped real owner’s land value because of home on it shortly after Barone bought it.

Consider 14.5: Adverse Possession. Pepkas owned Outlot 37 and part of Outlot 40 Pepkas 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. Pepka Outlot 37 Dews Outlot 40 Pepka’s land on outlot 40

Adverse Possession End-of-chapter Q9 Adverse possession – airstrip. Used for 40 year by plaintiff and others. Adverse possession? Adverse Possession Planted 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. Hendrix Juittings 10 foot strip

Weinstein v. Hurlbert Adverse Possession Disputed Boundary. Time of Possession. 1984-2004 and then new owner until 2008. Adverse Acts – Summer home and these only occurred in the summer Mowing lawn Maintenance and replacement of Rosa Rugosa bushes Parking of boats on property Removal of sign from new owner in 2008 that staked property Is that adverse enough

Consider 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 Property Lot 18 Laurins Property Lot 19 Lake

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 18

Number of Years Required for Adverse Possession (Fig. 14-2) State Years Alabama 20 Alaska 10 Arizona 10 Arkansas 7 California 5 Colorado 18 Connecticut 15 Delaware 20 Dist. of Col. 15 Florida 7 Georgia 20 Hawaii 20 Idaho 5 Illinois 20 Indiana 10 Iowa 10 Kansas 15 Kentucky 15 Louisiana 30 Maine 20 Maryland 20 Mass. 20 Michigan 15 Minnesota 15 Mississippi 10 Missouri 10 Montana 5 Nebraska 10 Nevada 5 New Hamp. 20 New Jersey 30 New Mexico 10 New York 10 N. Carolina 20 North Dakota 20 Ohio 21 Oklahoma 15 Oregon 10 Pennsylvania 21 Rhode Is. 10 South Carolina 10 South Dakota 20 Tennessee 7 Texas 3 Utah 7 Vermont 15 Virginia 25 Washington 7 West Virginia 10 Wisconsin 20 Wyoming 40 These 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

Requirements for a Gift Donative’s intent by the donor or grantor Delivery of the gift Acceptance by the donee or grantee Consider 14.6 – Transfer to Daughter Gift 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 Suit 20

Consider 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 Middleton Logan Middleton, President V.T.C. Lines, Incorporated Issue: A creditor of V.T.C. Lines is suing that the conveyance is invalid.

Types of Recording1 Statutes Race First to record (first in time, first in right) Notice Last bona fide good faith purchaser (bfp) to take title (failure of others to record) Race/Notice First bfp to record Notice/Race 1Not required to transfer: required for future protection 22

Title Insurance Does not transfer from seller to buyer Purchased by buyer Covers property not person Single premium 23

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 (new in 2006) Does not cover known deficiencies in title 24

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 Conditions Requirements for the issuance of the policy, such as removal of liens Stipulations Certain 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

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 on the next slide) 26

Exclusions from Title 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 27