3. Transfer Of Title And Title Insurance

Front 1

TITLE TO REAL ESTATE
Transfer Of

Back 1

Four Methods:
1. Voluntary Alienation: Effected thru Public/Govt. and Private/Individual Grants.

2. Involunary Alienation:
a. Foreclosure
b. Eminent Domain
c. Escheat
d. Adverse Possession

3. Descent: Dies with Heirs, but no Will; Court Appointed Adminstrator

4. Will: Deceased-appointed Executor

Front 2

TRANSFER OF TITLE
By Document: Deed

Back 2

Deed: Grantor/Seller - Grantee/Buyer
In Writing to be Enforceable: AZ Statute of Frauds

1. Competent Grantor: 18 Yr; Sound Mind
2. Identifiable Grantee: Identifiable; Competent or Incompetent; Status such as Minor, Married, Trustee, et al
3. Granting Clause: Clarifies what is being Given Up
4. Hadbendum Claus: Used when Limiting Interest
5. Legal Description: Precise
6. Exceptions/Reservations: Seller reserves Title to portion (Exception: Minerals) and (Reservations: Life Estate, Deed Restrictions, Zoning)
7. Legal Consideration: Valuable is money, goods, etc; and Good is love and affection (hard to enforce)
8. Signature of Grantor: Definitely in Joint Tenancy; Restrictions
9. Acknowledgement: Notarized: Identifies Grantor, Voluntary Action
10. Delivery to Grantee:
a) In Grantor's lifetime/actual delivery in Eastern States
b) Delivered thru Escrow; and unaffected by Grantor death priot to close in AZ

Front 3

TRANSFER OF TITLE
Deeds: Convenants/Promises

Back 3

Convenant Of:
1. Seizin: Grantor owns and has right to convey
2. Quiet Enjoyment: Grantor defends title agains claims; compensates Grantee if invalid or defective
3. Against Further Encumberances: Free from; Grantee can Sue if violated

Front 4

TRANSFER OF TITLE
Deeds: Warranties/Guarantees

Back 4

1. Further Assurance: Grantor corrects title during lifetime as needed
(Special and General includes)
2. Warranty Forever: Grantor defends title against claims; Grantee may Sue for damages up to value at time of sale
(General includes)

Front 5

TRANSFER OF TITLE
Deeds: Types

Back 5

1. Patent: First in Chain; Transfer from Sovreign Nation
2. Conveying/Granting: Includes a) Bargain & Sale; b) Special Warranty; c) General Warranty

Front 6

TRANSFER OF TITLE
Deed: Description: Bargain and Sale

Back 6

Government sells Real Property:
a) Under market value
b) No Warranties
c) Grantor Title and Possession are implied

Often foreclosures; lowest quality deed.

Front 7

TRANSFER OF TITLE
Deed: Types of Bargain and Sale

Back 7

1. Sheriff's Deed: Foreclosure for House Payments
2. Treasurer's Deed: Foreclosure for Property Tax
3. Executor/Administrator Deed: Settling of estate by probate
4. Trustee Deed: Property for disposal due to Bankruptcy or Deed of Trust Foreclosure
5. Private: Grantor may use to limit liability

Front 8

TRANSFER OF TITLE:
Deed: Types of Warranty Deeds

Back 8

1. Special Warranty: Grantor responsible for encumbrances and defects arising ONLY during ownership; 3-Covenants + 1-Warranty for Further Assurance
(Used for Land and to convey property by a Trustee or relaocation company)

2. General Warranty: Grantor fully guarantees clear title, but not physical condtion; 3-Covenants + 2-Warranties
(Greatest protection for Grantee)

3. Limited Warranty: 1-Warranty + Stuatory Convenants

Front 9

TRANSFER OF TITLE
Deed: Specialized: Quit Claim

Back 9

1. Quit Claim: Grantor conveys Right, Title, Interest at time of event.
No Convenants nor Warranties
(Used to release minor interests; remove defects; erase easements; clear title)

2. Gift Deed/Quit Claim: Good vs. Valuable Consideration; difficult to enforce expectations from Grantee
(Used between relatives)

Front 10

TRANSFER OF TITLE
Deed: Specialized: Disclaimer, Correction, Fiduciary

Back 10

1. Disclaimer Deed: Denys Interest in property; used when spouses buy property as Sole and Separate

2. Correction Deed: Re-recording of Deed to supplement and correct mistakes in original

3. Fiduciary Deed: Grantor or Grantee is represented by another (Ex: attorney, broker); holds or manages money or property in confidence (Ex: for celebrities)

Front 11

RECORDATION
of Real Property Documents

Back 11

Purpose:
1. Provide Constructive Notice; and 2. Establish Buyer's Priority

Recordation is:
a) Not Mandatory
b) Does Not Guarantee Validity of Title
c) Does Lend Enforceability
d) Part of Chain of Title, history

Recordation of Deed must be Accompanied By:
a) Notarized "Affidavit of Value"
b) Sworn statement attesting to Purchase Price
c) Signatures of Buyer and Seller
Above information used by Couny Assessor for Taxes

Front 12

TRANSFER OF TITLE
Involuntary Alienation: Natural

Back 12

Loss of property against owner's wishes thru:

1. Natural Causes: No Gain or Loss in Title (only physical) !
a) Erosion/Gradual or Avulsion/Sudden
b) Accretion: Acquiring land thru deposits along streams and Alluvium is the deposited soil
c) Reliction: receding waters add land along rivers and littoral water

Front 13

TRANSFER OF TITLE
Involuntary Alienation: Operation of Law-1 of 2

Back 13

Loss of land from Operation of Law by:

1. Tax Foreclosure: Treasurer's Deed
2. Bankruptcy Sale: Trustee's Deed
3. Mortgage Foreclosure: Sheriff's Deed
4. Trustee's Sale: Trustee Deed
5. Judgement Execution: Sheriff's Deed
(All above are Bargain and Sale)
6. Adverse Possession: Prescriptive Suit agains Owner after 10 years of possession singly or by successors, called 'tacking.' Prove open, hostile, notorious, active and continuous.

Front 14

TRANSFER OF TITLE
Involuntary Alienation: Operation of Law - 2 of 2

Back 14

6. Escheat: Deceased owner is without a Will or Heirs; property reverts to State
7. Eminent Domain: Government acquires property with compensation
8. Condemnation: Government proceeds if owner refused to sell

Front 15

TRANSFER OF TITLE
Involuntary Alienation: Descent and Will

Back 15

1. Descent: Dies Intestate, without Will; probate court Administrator distributes to closest relatives, in succession according to AZ law

2. Will: Executor distributes property

Titles always transfer at time of Death, subject to probate approval.

Front 16

WILL
Types and Language

Back 16

1. Formal/Conventional: Signatures: Maker, 2-Witnesses Non-Heirs (usually drafted by attorney)
2. Holographic/Hand Written: Maker/Testator's signature, only
3. Nuncupative: Oral
Not recognized in AZ
4. Codicil/Supplement to Will: Signature of Maker, 2-Witnesses.
(Seldom revokes original will)

Real Property = Devise
Personal Property = Bequest
Cash = Legacy

Front 17

TITLE
Defined

Back 17

Accumulation of facts enabling recovery or retention of Real Property
(Carries most weight)

Composite of:
1. Constructive (Legal) Notice
Public is responsible for knowledge of contents
2. Actual Notice:
Direct knowledge (that which is already known) such as a person living on a sepcific property

Front 18

TITLE
Evidence of Proof

Back 18

Evidence from Seller to Buyer:

1. Abstract/Certificate of Title/Attorney Opinion: Quality of Items affecting ownership/title
2. Torrens Certificate: AU, CA: Registration of land, system (not in AZ)
3. Title Insurance: Most accepted evidence of title, due to detailed apporach willingness to insure

Front 19

TITLE INSURANCE
Defined

Back 19

A) Protects Owners and Mortgagees against loss through defects, liens or encumbrances
B) Covers the past
C) Two Types: Owners and Lenders

Front 20

TITLE INSURANCE
Two Types: Owners and Lenders

Back 20

Owner/Vendor:
a) Benefits buyer/vendee
b) Reduces seller's liability
c) Paid by seller at close of escrow
d) Based on purchase price
e) Valid thru buyer or heirs ownership
f) Void when sold

Lender/ ALTA/ Broad Form/ Extended:
a) Benefits lender/ mortgagee/ beneficiary: Ensures enforeceable lien
b) Paid by Borrower/Vendee
c) Based on loan amount
d) Valid as long as property is collateral, even if sold
e) Void when loan is paid off

Lender Policy insures same as Owner Policy, plus:
i. Rights of parties in possession
ii. Unrecorded documents and interests, such as Mech Liens (Owner covers only recorded interests/public record)
iii. Questions of survey and encroachment; ALTA requires physcial inspection

Front 21

TITLE
Special Terms

Back 21

Subrogation: Exchange of a claim for money, thereby waiving rights; or Substitution of one party for another, taking on former's rights

Title Examiner: Employee of Title Co who examines records for evaluation

Title Plant: Title Co storage facility of public records

Schedule A: Legal description of property insured; name of insured (grantee or lender); type of estate (fee simple, etc)

Schedule B: Standard Exception (never covered - taxes, deed restrictions); and Special Exceptions not covered by policy