Real Estate 310
Transfer of Title
Title Transfer
Real Estate 310 Principles of Real Estate Dr. Longhofer
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Title in Real Estate
• Title refers to the right to or ownership of land
– Title is simply a way of referring to ownership; it is not an actual printed document – A person holding title to real estate would, if challenged in court, be able to retain or recover possession or ownership of the real estate
• Title to real estate can transfer in several ways
– Voluntary alienation – Involuntary alienation – Devise and descent
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Voluntary Alienation and Deeds
• The most common way to transfer title to real estate is by voluntarily selling to giving it to someone else during your lifetime • A deed is the written instrument by which an owner of real estate intentionally conveys the right, title, or interest in the parcel of real estate to someone else
– The grantor is the person who is transferring title to the property to someone else – The grantee is the person receiving title to the property
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Real Estate 310
Transfer of Title
General Warranty Deeds
• A general warranty deed – or simply warranty deed – is the most comprehensive deed, providing the grantee a number of protections
– Through the covenant of seisin, the grantor guarantees that he owns the property and has the right to convey title to it – The covenant against encumbrances guarantees that the property is free from liens or encumbrances, except those explicitly stated in the deed
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General Warranty Deeds
– The covenant of quiet enjoyment guarantees that the grantee’s title will be good against third parties who might bring court actions to establish superior title to the property – The grantor promises to obtain and deliver any instrument needed to make the title good through the covenant of further assurance – Finally, the covenant of warranty forever binds the grantor to compensate the grantee for any loss sustained should the title fail at any time in the future
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Other Types of Deeds
• A special warranty deed guarantees only that the grantor received title, and that the property was not encumbered during the time the grantor held title, except as otherwise noted in the deed • A bargain and sale deed implies that grantor does possess title to the real estate and has the right to convey it, but makes no guarantees as to the title’s validity • A quitclaim deed transfers any interest the grantor may possess, but makes no guarantees that such interests even exist
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Real Estate 310
Transfer of Title
What is “Good Title”?
• Most real estate sales contracts require the seller to deliver “good and marketable title” to the property • A marketable title is one that
– Has no serious defects and does not depend on doubtful questions of law or fact to prove its validity; – Does not expose a purchaser to the hazard of litigation or threaten the quiet enjoyment of the property; and – Can convince a reasonably well-informed and prudent purchaser, acting on business principles and with knowledge of the facts and their legal significance, that he or she could sell or mortgage the property at a later time
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What is “Good Title”?
• Other degrees of good title exist as well
– An insurable title is one that a reputable title insurance company will underwrite – A title of perfect record is one for which the public records show no defects whatsoever
• Under Kansas law, the root of the title is established as the most recent transfer occurring at least 25 years prior to the transaction; defects arising prior to the root are automatically extinguished
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Root of Title Example
• Consider a transaction that will close on May 21, 2003 • The most recent transfers were on
– January 21, 1999; March 13, 1991; December 20, 1978; February 7, 1978; and May 14, 1965
• The root of title for this transaction is February 7, 1978
– All claims to title that arise from prior to this date are no longer valid, unless they have been properly pursued in the meantime
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Real Estate 310
Transfer of Title
Public Records
• Public records are the primary source of information about encumbrances on a title
– In Sedgwick County, the Register of Deeds records all records relating to real estate the county (deeds, mortgages, oil & gas leases, platted additions to cities, personal property liens, federal and state tax liens, etc.) – Recording provides constructive notice of a claim, and establishes priority among claims
• Note that not all liens (real estate taxes, special assessments, estate taxes) are recorded; evidence of these must be gained from other sources
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Methods of Evidencing Marketable Title
• A title search is generally performed to trace the chain of title and ensure that the seller does have marketable title to the property
– An abstract of title is a summary report of the information found in a search of public records
• A seller can provide proof of ownership in several ways
– Certificate of title – Title insurance – Torrens certificate
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