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Chap 001

An interest is a right or claim on real property, its revenues, or production. Title Assurance Deeds limit the covenants to the ownership duration of the current grantor. A lien is a lien on a property that is not in the owner's Possession. An easement is a nonpossessory interest in land. The right is for the use of the land for a special purpose.

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52 views14 pages

Chap 001

An interest is a right or claim on real property, its revenues, or production. Title Assurance Deeds limit the covenants to the ownership duration of the current grantor. A lien is a lien on a property that is not in the owner's Possession. An easement is a nonpossessory interest in land. The right is for the use of the land for a special purpose.

Uploaded by

wanshahdila
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Chapter 01: Real Estate Investment: Basic Legal Concepts

McGraw-Hill/Irwin

Copyright 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved

1-1

Copyright 2011 by the McGraw-Hill Companies, Inc. All rights reserved.

Property Rights and Estates


Real property vs. personal property Estates
Based on Rights: Possession vs. Not in Possession Based on Possession and Use: Freehold vs. Leasehold

Possessory estates
Freehold
Fee Simple Estates Life Estates

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Estates
Nonpossessory Estates: Future Estates
Reversion Remainder

Leasehold Estates
Estate for Years Estate from Year to Year

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Additional Interests
An interest is a right or claim on real property, its revenues, or production.
A common example of an interest is when an owner of real estate pledges or encumbers his property as a condition for obtaining a mortgage. The lender is said to have a secured interest.

An easement is a nonpossessory interest in land. The right is for the use of the land for a special purpose.
Examples include rights of way for road access and utility lines.
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Title Assurance
Title Assurance The Meaning of Title
Abstract Term Quantity of Rights Conveyed Abstract of Title Title Chain

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Title Assurance
Deeds
Grantor & Grantee General Warranty Deed
Covenant that the grantor has good title Covenant that the grantor has the right to convey the property Covenant to compensate the grantee for loss of property or eviction as a result of a superior claim No encumbrances on title except those noted
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Title Assurance
Deeds
Special Warranty Deed
Limits the covenants to the ownership duration of the current grantor. No guarantees on the ownership of prior grantors.

Bargain and Sale Deed


Conveys property without seller warranties Sometimes called an as-is deed

1-7

Title Assurance
Deeds
Sheriffs Deed-Trustee Deed
Bargain and sale deed received by a buyer from a foreclosure or other forced sale by sheriff or trustee No warranties are added

Quitclaim Deed
No Covenants The least protection to the grantee Grantor conveys whatever right may exist
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Title Assurance
Abstract & Opinion
Title search Study of relevant records Lawyers opinion on title
Is it good and marketable? Are there any clouds on title? Is there a break in the chain of title?

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Title Insurance
Why Title Insurance and not Abstract and Opinion? 1. Definite contract liability to the premium payer 2. Reserves sufficient to meet insured losses 3. Supervision by an agency of the state 4. Protection to the policyholder against financial loss because of any kind of title defect, disclosed or hidden While an abstract and opinion method may still be used because of cost considerations, in general title insurance is used. As a general rule, lenders will require that a buyer use title insurance. 1-10

Title Assurance
Title Insurance
One time premium Unseen Hazards in the Public Record
Risk is spread among many property owners

Owners Policy
Insures the interest of a new owner

Lenders Policy
Insures the interest of the lender

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Recording Acts
Recording protects the interest of the owner Constructive Notice
A person is deemed to have whatever information is in the public record

Mechanics Liens
May be recorded after the fact Sellers affidavit Lien waiver
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Limitations on Property Rights


Government Restrictions
Police Power
Zoning, building codes, etc.

Eminent Domain
Eminent domain is relatively expansive; depending on the state, government has relatively broad powers on what property they may take possession of through eminent domain and for what purpose.

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Limitations on Property Rights


Private Restrictions
Deed restrictions Subdivision restrictions

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