Transfer of Title Flashcards

Abstract of Title

An abstract of title is a condensed history of all recorded documents and proceedings that affect the title to a specific parcel of real property. It is a summary, not a guarantee, of title condition.

Actual Notice

Actual notice means a person has direct, personal knowledge of a fact or interest in real property. This can come from being told, seeing something firsthand, or any form of direct awareness.

Adverse Possession

Adverse possession is a legal doctrine that allows a person to claim ownership of land by occupying it continuously for a statutory period under specific conditions, without the true owner's permission.

Bargain and Sale Deed

A bargain and sale deed implies that the grantor holds title and possession of the property but does not include warranties against encumbrances or title defects.

Chain of Title

The chain of title is the sequential history of all transfers of ownership for a specific property, from the original source (typically a government patent or grant) to the present owner. An unbroken chain is essential for marketable title.

Closing Process / Settlement

The closing process, also called settlement, is the final step in a real estate transaction where documents are signed, funds are disbursed, and title is officially transferred from the seller to the buyer.

Constructive Notice

Constructive notice is the legal presumption that a person has knowledge of information that is available through public records or visible inspection of the property, regardless of whether they actually knew about it.

Deed

A deed is a written legal document that conveys (transfers) ownership of real property from one party to another. It must be delivered to and accepted by the grantee to be effective.

Deed Requirements (Essential Elements)

For a deed to be valid, it must contain several essential elements including a competent grantor, identifiable grantee, consideration, legal description, granting clause, signature of the grantor, and delivery and acceptance.

Escrow

Escrow is an arrangement in which a neutral third party holds documents, funds, or other items on behalf of the buyer and seller until all conditions of the transaction are met.

General Warranty Deed

A general warranty deed provides the greatest protection to the grantee by guaranteeing that the grantor holds clear title and has the right to sell the property. It includes covenants that protect against all defects in title, even those arising before the grantor owned the property.

Intestate Succession

Intestate succession is the legal process by which a deceased person's property is distributed according to state law when they die without a valid will. State statutes determine the order of inheritance.

Marketable Title

Marketable title is title that is free from reasonable doubt as to who the owner is and free from liens, encumbrances, or defects that would cause a reasonable buyer to hesitate before purchasing. It is also known as merchantable title.

Probate

Probate is the legal process by which a deceased person's will is validated by the court and their estate is administered, including the transfer of real property to the named beneficiaries or heirs.

Quitclaim Deed

A quitclaim deed transfers whatever interest the grantor may have in a property without making any warranties or guarantees about the quality of title. It offers the least protection to the grantee.

Recording (Public Records)

Recording is the act of placing a document in the public records at the county recorder's office to give constructive notice to the world of an interest in real property. Recording protects the holder's interest against subsequent claims.

Special Warranty Deed

A special warranty deed guarantees that the grantor has not caused any title defects during their period of ownership, but does not warrant against defects that existed before the grantor acquired the property.

Title Insurance

Title insurance is a policy that protects the insured party against financial loss from defects in title that were not discovered during the title search. Unlike other insurance, it covers past events rather than future risks.

Title Search

A title search is an examination of public records to determine the history of ownership, liens, encumbrances, and other interests affecting a property. It verifies that the seller has the legal right to transfer the property.

Transfer Tax

A transfer tax is a tax imposed by state, county, or local government on the transfer of real property from one owner to another. It is typically based on the sale price or a flat rate per dollar of consideration.