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72 Cards in this Set
- Front
- Back
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Forms of ownership - Tenancy |
Tenancy in severalty Tenancy in common Joint tenancy Tenancy by the entirety |
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Tenancy in severalty |
Sole ownership – by one person or by legal entities, for example a corporation is a legal entity |
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Tenancy in common |
Concurrent ownership with two or more owners 1. No special wording is required to create tenancy in common 2. Each owner owns a part which is undivided, therefore not specified 3. No right of survivorship – upon death, title passes to airs or assigns 4. Only one unity – possession – is required 5. Each owner may have separate deeds or all owners may be on the same deed 6. Each owner has the right to bring a court action to partition, meaning to break the property into individual parcels or sell the property and divide the money among owners 7. Each owner has the right to transfer his interest to anyone he or she may choose |
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Joint tenancy |
A concurrent ownership with two or more owners. Created to be sure the last surviving tenant owns the property after all the others have died. A will of a person in joint tenancy does not affect any property held
1. Special wording is required to create joint tenancy-"as joint tenants, with the right of survivorship, and not as tenants in common" 2. Each owns all Dash each owns an undivided interest. The interest must be equal since the survivor winds up with the whole thing, or if the property is sold by the parties are still living they each get the same amount of money 3. Joint tenants have the right of survivorship – upon death, title remains with surviving tenants 4. There are four unities each owner must have: "PITT" (a) The same right of possession (b) The same interest (c) must take title at the same time (d) must be on the same title/deed 5. Right to partition is just as in tenancy in common 6. Transfer of interest is like tenancy in common - the new owner does not have the "PITT" he is not a joint tenant |
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Tenancy by the entirety |
Similar to joint tenancy reserved for spouses – not available in South Carolina |
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Types of legal entities |
Land Trust Limited partnership General partnership S Corporation C Corporation Limited liability company – LLC |
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Land trust |
Method for handling the ownership of real estate by which the recorded title to the real estate is held by the trustee but all the rights and conveniences of ownership or exercised by the beneficial owner – beneficiary – who's interest is not disclosed |
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Limited partnership |
There must be at least one general partner and at least one limited partner. Limited partners have no authority and their liability is limited |
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General partnership |
All partners have authority and all partners have all liability |
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S corporation |
Stockholders are taxed like a partnership but corporation is not taxed, therefore there is no double taxation |
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C corporation |
Stockholders only taxed on dividends. Corporation is taxed on profits before paying dividends. Therefore there is double taxation |
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Limited liability company |
LLC
Similar to an S Corp., members are taxed like a partnership |
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Common interest properties |
1. Condominium 2. Townhouse 3. Planned unit development – PUD 4. Cooperative |
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Condominium |
A form of collective ownership of real property - condominium owners own no land but own the air space with in the walls - invisible parts of buildings, amenities, and land are common elements - common elements are held as tenants in common with other owners - Square footage is calculated by using inside measurements in condos - The owner has a freehold estate with the title to the individual unit. It may be held in any type of tenancy that is recognized in the state - common elements text separately and paid by the owners association from proceeds of the regime fees (pay property taxes of common areas, pay insurance for common areas and pay money for regime fees) |
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SC horizontal property act |
The law providing for condominiums
Master deed is recorded in the county where the property is located
By laws provide for the internal management of the homeowners association by the unit owners. A copy must be recorded with the master deed |
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Condominiums as securities |
Condominiums sold and put into rental pool are likely to be classified as securities
Securities license is required |
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Townhouse |
A form of ownership and a form of architectural style
Architectural style – a dwelling characterized by two-story construction with a common wall or walls bordering neighboring dwellings
Form of the ownership – similar to a condo in that the property owner owns his or her respective unit and it undivided interest in any common area. Differs from condo ownership and that the townhouse editor owns the physical structure in the land rather than just the airspace between the walls, floor, and ceiling |
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Planned unit development – PUD |
Used to describe a subdivision in which the standard available zoning classifications do not apply. A Master developer will, with the consent of the local governing authority, establish criteria for development of private and common area parcels specific to that subdivision. These may include special setback requirements, street lighting designs, street width standards, architectural styles, building height standards, land coverage ratios, common area park and amenity designs, and the like. Planned unit development are often used to cluster homes together more so than would otherwise be allowed by local zoning laws. Unlike in a condo, individual property owners on the land underneath their homes |
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Cooperative |
A type of dwelling unit where the owner buy stock in the corporation that owns the building and receives a proprietary lease.
Proprietary lease entitles the shareholder to occupy a specific unit in the building
A cooperative owner has a possessory interest in stock in a corporation, which is considered personal property
The cooperative owner is a tenant at will
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Differences in condos and co-ops |
Ownership: Condo is real estate, co-op is personal property because stock is considered personal property
Disposition: Condo you can sell at will, co-op board of directors must approve of sale
Tax deductions: Condo is real estate, co-op is stock, but you pay your assessment in a co-op which covers insurance, property taxes, etc.
Contingent liability: differ slightly for the two. You might suffer for someone else's misbehavior |
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Timeshare ownership plan |
Called interval ownership. Similar to condo ownership but it is for a certain time each year |
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Title insurance |
Title problems could cause loss of homes, business property, or mortgage investments. Problem not disclosed by the most careful search of public records are the most dangerous. And attorneys paralegal's examination may be the finest that can be produced, but the title may still be defective. For this reason, lenders require title insurance to protect them and it is also the reason your clients and customers your purchase an owners policy
Single premium policy – premiums are paid once – at the time the policy is received Policy dates – dates only cover the past from the policy date Owners policy – this optional policy protects the owner and his heirs Mortgagee's policy – this policy is required by the mortgagee to cover problems up to the amount of the loan balance. It decreases with each principal payment |
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Marketable title |
"clear title" - title with no obvious threats
Title to real estate that is free and clear of liens or rather title defects, a title that enables in order to sell the property for you lead to others and which others will except without objection |
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Insurable title |
Insurable does not necessarily mean that it is marketable. Although the title insurance policy will ensure that the title is marketable, such coverage is subject to whatever exceptions baby listed, and some of those exceptions may render the title unmarketable. |
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Legal title passes… |
When the signed deed is delivered by a competent grantor (while still living) and accepted by the grantee |
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Equitable title |
Not the same as legal title, the right to get legal title usually received by binding purchase and sales contract |
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Land contract |
Installment contract – used in some types of better financing, the buyer gets possession under the contract, but the owner keeps title/ownership. The buyer has an obligation to make payments to the owner until agreed amount has been paid at which point the owner will give the buyer legal title by giving the buyer a deed. If buyer defaults, seller must foreclose the contract |
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Types of deeds |
General warranty deed Special or limited warranty deed Quitclaim deed Bargain and sale deed Tax deed Gift deed |
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General warranty deed |
Used in most property transfers, and gives every possible future guarantee/covenant/promise to grantee
Three current promises/present covenants: 1. Seisin, seizen - possession 2. Right to convey – sell or giveaway 3. Against encumbrances
Three future promises/covenants: 1. Further assurance – bind heirs from ever being able to claim property as theirs 2. Quiet enjoyment – the assurance of a defense against defects in the title 3. Warranty forever |
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Special or limited warranty deed |
- Used to limit liability of grantor - Gives no warranty against title defects that may have occurred prior to the time that the grantor took title - Warrants that the grantor received title - Warrants that the title was not encumbered during the grantors ownership except as noted on the deed |
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Quitclaim deed |
Transferring property without any promises
- normally is to remove clouds on title - grantor makes no claim of ownership - transfers whatever interest of grantor - will not warrant anything - conveys marketable title just as General warranty deed if grantor has marketable title - also maybe used when grantor conveys inherited property but descendants title was questionable. It could also be used when family members convey property to each other |
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Bargain and sale deed |
Seller is only making promise about ownership, no warranties against encumbrances, and implies that grantor has title and possession
* not used in South Carolina |
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Tax deed |
In South Carolina, this deed is received after 12 months from date the property was bought at a tax sale.
A suit to quiet title will probably be required for the buyer to get marketable title |
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Gift deed |
Used to transfer real state to another as a gift in exchange for love and affection, valuable consideration – something worth money – is not required |
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What does title insurance insure against? |
1. Defects in the title of record 2. Defects not disclosed by the record 3. Cost of defending title
Few of these potential hidden hazards: 1. Forged deeds, releases, etc. 2. Instruments executed under fabricated or expired power of attorney 3. Deeds delivered after death of grantor or grantee, or without consent of grantor 4. Undisclosed or missing heirs 5. Misinterpretation of wills 6. Deeds by person of unsound mind 7. Deeds by persons supposedly single but secretly married 8. Deeds by minors 9. Birth or adoption of children after date of will 10. Deed from a bigamous couple 11. Mistakes in recording legal documents 12. Easement by prescription not discovered by survey 13. Descriptions apparently, but not actually, accurate |
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Nine essential elements of a deed |
1. Grantor and grantee – grantor must be competent and grantee must be identifiable 2. Granting clause – words that say seller is transferring ownership to buyer 3. Consideration - what is given – money 4. Legal/adequate description – for example metes and bounds 5. Habendum- describes the type of the state to be taken, for example fee simple 6. Testimonium - execution clause - date of transaction, competent grantors signature, and witness 7. Acknowledgement – notarization required to record the deed 8. Recording the deed – this does not convey legal title, only delivery and acceptance does, instead it serves as a constructive notice 9. Unrecorded deeds - valid between parties |
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Involuntary transfer of real property |
1. Judicial sale – court ordered (a) Partition suit (b) mortgage foreclosure 2. Ad valorem tax sale 3. Adverse possession – squatters rights- Open, continuous, invisible, hostel for a period of time |
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Transfer of real property through nature at work |
1. Accretion - addition of land by water (a) Reliction - land uncovered by water receding (b) Alluvion - land increased by deposits of soil
2. Removal of land by natural forces (a) avulsion – rapid removal, earthquake, mudslide, hurricane (b) erosion - slow removal |
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What is not covered by title insurance? |
Unrecorded claims of parties in possession Facts revealed by an accurate survey Unrecorded mechanics liens Taxes or assessments not yet due or certified Special assessments not yet certified |
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Title examination |
Title may be examined by anyone, the records are open to the public, but in South Carolina only a lawyer may legally certify a title. Although the lawyer's paralegal probably does the record room work in most cases the lawyer is the one who has the responsibility |
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Chain of title |
A list of all grantors (sellers) and all grantees (buyers) on record. Making certain there are no missing links in the chain |
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Abstract of title |
All recorded events in properties history.
Checking for all recorded encumbrances - Pecuniary (money) charges - mortgages and liens - Estates and interests less than fee simple - life estates, etc. - Easements or servitude - whether or not other people have the right to cross your property |
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Cloud on title |
An actual or apparent outstanding threat on the title to real property – title companies will refuse to ensure title to be transferred with the cloud or they will ensure ownership except for the cloud (threading aspects) |
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Suit to quiet title |
To clear any clouds, a court action intended to establish or settled the title to our particular property and thus quiet any future challenges or claims to the title |
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The purpose of a deed |
Voluntarily transfer marketable legal title or ownership from the grantor to the grantee. The deed is the evidence of ownership |
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Instrument |
Document which sets forth the rights and duties of the parties – contract that must contain all elements of a contract |
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Insurable title |
Insurable does not necessarily mean that it is marketable. Although the title insurance policy will ensure that the title is marketable, such coverage is subject to whatever exceptions baby listed, and some of those exceptions may render the title unmarketable. |
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Legal title passes… |
When the signed deed is delivered by a competent grantor (while still living) and accepted by the grantee |
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Equitable title |
Not the same as legal title, the right to get legal title usually received by binding purchase and sales contract |
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Land contract |
Installment contract – used in some types of better financing, the buyer gets possession under the contract, but the owner keeps title/ownership. The buyer has an obligation to make payments to the owner until agreed amount has been paid at which point the owner will give the buyer legal title by giving the buyer a deed. If buyer defaults, seller must foreclose the contract |
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Types of deeds |
General warranty deed Special or limited warranty deed Quitclaim deed Bargain and sale deed Tax deed Gift deed |
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General warranty deed |
Used in most property transfers, and gives every possible future guarantee/covenant/promise to grantee
Three current promises/present covenants: 1. Seisin, seizen - possession 2. Right to convey – sell or giveaway 3. Against encumbrances
Three future promises/covenants: 1. Further assurance – bind heirs from ever being able to claim property as theirs 2. Quiet enjoyment – the assurance of a defense against defects in the title 3. Warranty forever |
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Special or limited warranty deed |
- Used to limit liability of grantor - Gives no warranty against title defects that may have occurred prior to the time that the grantor took title - Warrants that the grantor received title - Warrants that the title was not encumbered during the grantors ownership except as noted on the deed |
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Quitclaim deed |
Transferring property without any promises
- normally is to remove clouds on title - grantor makes no claim of ownership - transfers whatever interest of grantor - will not warrant anything - conveys marketable title just as General warranty deed if grantor has marketable title - also maybe used when grantor conveys inherited property but descendants title was questionable. It could also be used when family members convey property to each other |
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Bargain and sale deed |
Seller is only making promise about ownership, no warranties against encumbrances, and implies that grantor has title and possession
* not used in South Carolina |
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Tax deed |
In South Carolina, this deed is received after 12 months from date the property was bought at a tax sale.
A suit to quiet title will probably be required for the buyer to get marketable title |
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Gift deed |
Used to transfer real state to another as a gift in exchange for love and affection, valuable consideration – something worth money – is not required |
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What does title insurance insure against? |
1. Defects in the title of record 2. Defects not disclosed by the record 3. Cost of defending title
Few of these potential hidden hazards: 1. Forged deeds, releases, etc. 2. Instruments executed under fabricated or expired power of attorney 3. Deeds delivered after death of grantor or grantee, or without consent of grantor 4. Undisclosed or missing heirs 5. Misinterpretation of wills 6. Deeds by person of unsound mind 7. Deeds by persons supposedly single but secretly married 8. Deeds by minors 9. Birth or adoption of children after date of will 10. Deed from a bigamous couple 11. Mistakes in recording legal documents 12. Easement by prescription not discovered by survey 13. Descriptions apparently, but not actually, accurate |
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Nine essential elements of a deed |
1. Grantor and grantee – grantor must be competent and grantee must be identifiable 2. Granting clause – words that say seller is transferring ownership to buyer 3. Consideration - what is given – money 4. Legal/adequate description – for example metes and bounds 5. Habendum- describes the type of the state to be taken, for example fee simple 6. Testimonium - execution clause - date of transaction, competent grantors signature, and witness 7. Acknowledgement – notarization required to record the deed 8. Recording the deed – this does not convey legal title, only delivery and acceptance does, instead it serves as a constructive notice 9. Unrecorded deeds - valid between parties |
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Involuntary transfer of real property |
1. Judicial sale – court ordered (a) Partition suit (b) mortgage foreclosure 2. Ad valorem tax sale 3. Adverse possession – squatters rights- Open, continuous, invisible, hostel for a period of time |
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Transfer of real property through nature at work |
1. Accretion - addition of land by water (a) Reliction - land uncovered by water receding (b) Alluvion - land increased by deposits of soil
2. Removal of land by natural forces (a) avulsion – rapid removal, earthquake, mudslide, hurricane (b) erosion - slow removal |
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Voluntary transfer - Grant |
Deed - sale or gift Probate - result of death, may be voluntary (if will in place) or involuntary (if without will) (a) devise – with a will – testate (b) descent - without a will - intestate
Dedication – a gift of roads, sewer lines etc., to the government. Developers do this to get rid of the liability for continued maintenance |
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Wills |
Wills can convey real property from descendent to the heirs or beneficiaries.
Testate - will Intestate- no will
Types of wills include: 1. Holographic – prepared by ones own handwriting 2. Formal - professionally prepared by an attorney 3. Oral or nuncupative - spoken and written down by a witness, usually in emergency or in one's death bed.
Probate – court supervised process of determining in locating a descendants property paying bills and taxes due, and distributing the remainder to their heirs or devisees |
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1031 exchange |
Tax deferred exchange, allows capital gains tax on the gain - from the sale – to be deferred |
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What is not covered by title insurance? |
Unrecorded claims of parties in possession Facts revealed by an accurate survey Unrecorded mechanics liens Taxes or assessments not yet due or certified Special assessments not yet certified |
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Title examination |
Title may be examined by anyone, the records are open to the public, but in South Carolina only a lawyer may legally certify a title. Although the lawyer's paralegal probably does the record room work in most cases the lawyer is the one who has the responsibility |
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Chain of title |
A list of all grantors (sellers) and all grantees (buyers) on record. Making certain there are no missing links in the chain |
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Abstract of title |
All recorded events in properties history.
Checking for all recorded encumbrances - Pecuniary (money) charges - mortgages and liens - Estates and interests less than fee simple - life estates, etc. - Easements or servitude - whether or not other people have the right to cross your property |
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Cloud on title |
An actual or apparent outstanding threat on the title to real property – title companies will refuse to ensure title to be transferred with the cloud or they will ensure ownership except for the cloud (threading aspects) |
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Suit to quiet title |
To clear any clouds, a court action intended to establish or settled the title to our particular property and thus quiet any future challenges or claims to the title |
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The purpose of a deed |
Voluntarily transfer marketable legal title or ownership from the grantor to the grantee. The deed is the evidence of ownership |
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Instrument |
Document which sets forth the rights and duties of the parties – contract that must contain all elements of a contract |
