EscrowCh09

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					  Chapter 9



 PREPARING
DOCUMENTS
                   Chapter Outline
   Transfer of ownership and Deeds
   Using prepared forms
   Substitution of Trustee
   Grant deed
   Quitclaim deed and Interspousal deed
   Acknowledgment and jurat’s notary
   Documentary transfer tax
   Preliminary change of ownership report (PCOR)
   Trust certification and Corporation ownership
   Notes and trust deeds
   Power of attorney
                   Chapter 9
At the conclusion of this chapter, you will be able to:
  1)     Understand how to complete the
            preliminary change of ownership report
  2)     Give a definition for a deed
  3)     Outline the steps required to transfer
            ownership of a trust deed
  4)     Differentiate between a grant deed and a
            quit claim deed
  5)      Explain the various transfer taxes
        Transfer of Ownership
             and Deeds
   A deed does not require prescribed wording
       or format
   A deed must have been properly prepared,
       delivered and accepted.
   A person can own property without evidence
       of a recorded grant deed
   The purposes of a deed include to:
    •   Convey, or transfer title
    •   Serves as evidence of ownership
         Statute of Frauds
Must     be in writing to be enforceable in court
Must     name the grantee who is to receive the property
Must     have some form of consideration
Must     contain words that clearly convey the intent to transfer
•   Interest in the property
•   Giving and receiving of the interest
     o   Must name the grantor
     o   Must contain the signature of the grantor on the
               document
     o   Must have a public notary seal if it is to be recorded
     o   Must be delivered by the grantor to the grantee
     o   Must be accepted by the grantee
               Using Prepared Forms
   Obtained from software programs
   Obtained from a local stationary store.
   Obtained from the title insurance company.
       name of the trustee is often preprinted
                     SAMPLE DOCUMENTS
   Abandonment of Homestead Deed, Trustee’s
   Abstract of Judgment            Deed, Quitclaim
   Affidavit – Death of Joint Tenant       Deed of Trust (All-Inclusive)
   All-Inclusive Deed of Trust     Deed of Trust (Trust Deed)
   Assignment of Deed of Trust Lis Pendens
   Contract of Sale                        Mechanic’s Lien
   Declaration of Homestead        Notice of Action (Lis Pendens)
   Declaration of Restrictions     Notice of Additional Advance
   Decree of Distribution                  Notice of Completion
   Deed, Easement                          Notice of Default
   Deed, Grant                             Notice of Non-Responsibility
   Deed, Tax                       Notice of Rescission
                SAMPLE DOCUMENTS
   Notice of Trustee’s Sale    Subordination Agreement
   Power of Attorney           Substitution of Trustee
   Reconveyance, Full          Trust Deed (All-Inclusive)
   Reconveyance, Partial       Trust Deed (Deed of Trust)
   Release of Mechanic’s Lien
   Request for Notice
   Revocation of Power of Attorney
   Satisfaction of Judgment
   Satisfaction of Mortgage
             Substitution of Trustee
   Deeds contain a pre-printed name of the trustee.
   For loan pay off, the beneficiary instructs the trustee
        to prepare a reconveyance deed.
   The trustee charges a fee for preparing the
        reconveyance deed.
   Private parties often use a substitution of trustee
        form to record the change from the pre-printed
        corporation trustee to an individual trustee to
        perform the trustee duties at less or no fee.
            Grant Deed
   may convey all or only a portion of the ownership
   Reservation-gives all the real property to the
       grantee with the exclusion of specific portions
       of the land
   Reversion-may also contain a deed restriction
       that does not allow for certain acts to be
       performed on the premises
   Grantor-the party who is transferring the property
       out of their name-the party giving away
       ownership
   Grantee-the party receiving title to the property
       GRANT DEED COMMENTARY
1.   Recording Information
2.   County Recorder’s Stamps
3.   Documentary Transfer Tax
4.   Recording Requested By
5.   And When Recorded Mail To
6.   Tax Statement Address
7.   For a Valuable Consideration
8.   Grantor
9.   Operative Words of Conveyance
      GRANT DEED COMMENTARY
10. Grantee
11. Legal Description
12. Date of Execution
13. Signature of the Grantor
14. Acknowledgment
15. Venue
16. Notary Seal or Stamp
17. Title Order No. and Escrow No
18. Assessor’s Parcel Number (APN) or also known
  as Assessor’s Identification Number (AIN).
                Quitclaim deed
   means to quit all claims against the property
   is a written document that operates as a release
   pass any title, interest or claim which the grantor
        may have in the real property
   does not contain any warranty or covenant of any
        valid or implied interest or title ownership
         Interspousal Grant Deed
   used when the transfer is between
       individuals in a marriage
   one spouse deeds all interest in real
       property to the other spouse
            Acknowledgment and Jurat’s
                     Notary
   notary public acknowledges the
    authenticity of signatures of the person
    signing the document
   a jurat’s notary is when a separate
    notary form is attached to the document

Instructions for use of a notary with the document:
Please sign and acknowledge this instrument before a notary public.
Be sure the notary seal is legible; sign your name exactly as it is
printed on this document.
        Documentary Transfer
               Tax
    a tax for the transfer of property from one
     owner to another
    The county tax rate is $.55 per $500 or $1.10
     per $1,000
    The city tax varies from $0 to $5.50 per $1,000
Escrow instructions allowing the collection and payment of
      this tax is usually as follows:
You are further instructed to pay documentary transfer tax on
       deed as required.
           Preliminary Change of
          Ownership Report (PCOR)
   A law requiring escrow to report the details
        of a transfer of ownership to the tax
        entity for the purpose of generating tax
        revenue to the government.
   The penalty and amount the escrow officer
        must pay to the tax entity is spelled out
        should the parties to the transaction elect
        not to comply with the tax laws
           Preliminary Change of
             Ownership Report
   The document is presented to the county recorder
        at the time of recordation of transfer
        ownership documents.
   Part 1 is where the borrower indicates if the
        transaction is for a transfer of the property to a
        trust or to return the property to the original
        transferor.
   Part 2 gives other information (lease,inheritance).
   Part 3 gives the price and terms of a sale.
   Part 4 gives information about the property.
             Trust Certification
   Each individual must sign as “Trustee” of
       the trust, not as an individual person.
   the trust agreement will indicate the
       powers of the individuals.
   The individual trustees may have to deed
       the property out of the trust and back
       into their individual names with a
       recorded grant deed.
          Corporation
   Corporation Grant Deed
   Corporation Quit Claim Deed
   The builder/developer of the property builds new
    homes, then gives a corporation deed to each
    individual purchaser. Also, when a property has
    been foreclosed, the trustee who passes title to
    the successful bidder gives a corporation deed to
    transfer ownership to the new buyer.
   The secretary usually signs for the corporation,
    not the President, and often requires a Corporate
    Resolution authorizing the act.
                       Trust Notes
   A Trust Note contains the terms and condition
    for a loan secured by real property
       For junior lien holders and private parties, the trust
        note is often prepared by the escrow officer.
       The terms of the note may have been contained in
        the written purchase agreement
       The note terms are dictated as part of the original
        escrow instructions
                    Trust Deed
   A trust deed is also called a deed of trust
   The most commonly used document
    evidencing debt on real property in California
       The borrower is the trustor)
       Bare, legal title is given to a neutral third party,
        the trustee
       The Lender is the beneficiary
          Power of Attorney
   when one individual gives another person the
        power to act on his or her behalf
   The power of attorney signs as if they were the
        actual property owner or the buyer
   The individual who is acting on behalf of the actual
        owner, buyer, landlord or tenant, is called the
        attorney-in-fact.
   In California, a valid power of attorney must have
        been recorded at the county recorder’s office
        where the property is physically located
                Think About It!
      Grant Deed or Quit Claim Deed?
   An unmarried brother and a single sister co-own
       property with a Grant Deed. The sister
       executes a Grant Deed to a third party for
       payment of her debt. The brother is very
       upset. He jumps in his car to drive over to
       fight over the matter, but he gets into a car
       crash and dies. The brother had willed all his
       property to his sister.
      Who has title to the property?
         Think About It! Answer:
        The grant deed transferred only the sister’s
    interest to the third party. The brother did not
    sign a deed to transfer his interest to the third
    party. However, when the sister acquired the
    brother’s interest from the will, all the brother’s
    interest was automatically transferred to the
    sister and a Grant Deed conveys both the current
    title ownership interest plus any after-acquired
    title.
        If the sister had used a quitclaim deed, the
    third party would own half and the sister would
    own half of the property.

				
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