Study AZRE

Transfer of Title & Title Insurance

There are two types of title. Original title is the first time ownership is given is from the government to an individual. All subsequent transfers of ownership are passed using derivative title.

Transferring Title

Alienation is a legal term for transferring ownership to real property from one person to another. Real property may be transferred through voluntary or involuntary alienation. Voluntary Alienation The transference by choice, through both public (governmental) and private (individual) grants. Owner willingly initiates an ownership transfer.

• SALE - The transfer of ownership by a sales contract. It is a meeting of the minds between a ready, willing, and able buyer and the seller.
• Will - A will, also called a testament, can transfer ownership upon the owner's death (the testator. When someone dies with a will in place, it is called dying "testate".
  For a will to be valid:
  • The testator must be competent and of legal age.
  • The will must be in writing and signed by the testator
  • The will must be witnessed by a minimum of two people who are not named in the will
  Specific terms for diff types of property in a will:
  • The testator must be competent and of legal age.
  • The will must be in writing and signed by the testator
  • The will must be witnessed by a minimum of two people who are not named in the will
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Types of Leases

• Gross Lease (straight lease, flat lease) The most common lease for residential properties. The tenant pays a set amount of rent each month, and the landlord pays all the building expenses.
• EXAMPLE:
  Owner enters into gross lease with tenant for $1,875 per month. Tenant will be responsible for the property insurance, property taxes, building repairs, and pool maintenance.
• Net Lease Most common for commercial property. The tenant pays a set amount of rent plus some or all of the building expenses (taxes, insurance, maintenance, etc). The lease can be net, net-net, or net-net-net. The more "nets," the more expenses paid by the tenant.
• EXAMPLE:
  Business enteres into a net-net-net lease with XYZ Company for office space. Tenant will pay $3,875 per month. Additinoally, tenant will pay their share of the property taxes, insurance, and building maintenance. Their share is based on the percentage of square feet they are leasing in the campus.

Ownership

Vocabulary

Title- Actual lawful ownership of real property. Title is NOT a document, it is a CONCEPT dealing with ownership.

Deed- The actual document that conveys all or parts of someone's interest in real property to someone else. It is written proof of the rights conveyedto the grantee having title to the land.

Grantor- The person transferring title TO, or an interest in, real property.

Grantee- A person receiving the conveyance of real property.

Holdover Tenant- Someone who remains in the property after the lease has expired.

Homestead- Primary residence, the equity in which is usually exempt from attachment by creditors to a statutorily preset amount.

Inchoate- Incomplete, as an interest in property, such as a lien that has been filed but not enforced.

Lessee- The tenant in a lease agreement.

Lessor- The landlord in a lease agreement.

Probate-The judicial process of determining who are the rightful heirs.

Remainderman- A third party who has a future interest in property upon the termination of a life estate.

Reversion- The returning of property upon the termination of a life estate and that is held by the Grantor.

Right of Survivorship- The characteristics of a joint tenancy by which the surviving joint tenant automatically takes title upon a joint tenant's death.

Waste- Reduction of value caused by destruction, damage of property by someone in possession who holds less than a fee estate.

Leasehold Estate- Allows holder of the lease to have the right of possession. Contract for possession is called a Lease. Under Statue of Frauds, leases for more than one year must be in writing to be enforceable.

Estate for Years- Lease that extends for a definite term. No notice is required to terminate this estate. Death by either party or sale of the property will not terminate this estate.

Periodic Estate- No definite term and renews automatically for subsequent units of time. Notice is required to terminate this estate. Death of either party or sale of the property will not terminate this estate.

Estate at Will- Created when the owner permits another to occupy the property without a formal agreement. Death of either party and sale of the property will terminate this estate.

Estate at Sufferance- Lowest type of leasehold estate. Holder of estate is also called a 'holdover tenant'. The tenant is trespassing and the landlord can evict the tenant or accept the rent, which changes it to a periodic estate.

Gross Leaes- Flat lease payment from tenant to landlord. Landlord covers building expenses.

Net Lease- Lease where tenant pays a base rent and shares buildings expenses with landlord.

Ground Lease- A long-term lease for the use of the land.

Ownership in Severalty- Individual ownership by a single individual or corporation. Government owned property is vested in severalty. Owner can will property to heirs.

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