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Free Texas Correction Warranty Deed Correction Form document sample
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Contents
Preface xiii General Partnerships 30
Limited Partnerships 30
Chapter 1 Limited Liabilities Companies 31
INTRODUCTION TO THE LAW OF REAL Ethics: Unauthorized Practice of Law 31
PROPERTY 01 Summary 31
Key Terms 32
Real Property Law 02
Review Questions 32
Laws That Govern Real Property Transactions 02
Case Problems 32
Real Property Versus Personal Property 02
Practical Assignment 33
Physical Elements of Real Property 02
Addendum 33
Ownership of Real Property 05
Community Property Agreement 33
Case: Ex Parte Brown 06
Methods of Acquiring Ownership to Real Property 07 Co-ownership Chart 35
Inheritance and Devise 07
Gift 07 Chapter 3
Contract and Sale 07 SURVEYS AND LAND DESCRIPTIONS 36
Adverse Possession 07 The Survey 37
History of American Real Property Law 09 Preparation of Surveys and Survey Standards 38
Modern-Day Estates in Real Property 09 Land Descriptions 39
Role of Legal Assistant in Real Estate Legal Government Rectangular Survey Description 39
Practice 12 Platted Description 43
Ethics: Introduction 14 Metes and Bounds Description 44
Summary 14 Practice Tips for Reviewing a Survey 49
Key Terms 15 Ethics: Competency 51
Review Questions 15 Summary 51
Case Problems 15 Key Terms 52
Practical Assignments 15 Review Questions 52
Practical Assignments 52
Chapter 2 Addendum of Sample Surveys and Legal
CONCURRENT OWNERSHIP 17 Descriptions 52
Platted Description Survey 53
Types of Concurrent Ownership 18
Metes and Bounds Description 54
Joint Tenancy with Right of Survivorship 18
Metes and Bounds with Use of Interior Angles 55
Tenancy in Common 19
Metes and Bounds Survey—E. Ponce de Leon
Tenancy by the Entirety 21
Property 56
Community Property 21
Agreements of Cotenancy 24 Metes and Bounds Survey—Mohawk Trail Property 57
Checklist: Agreement of Cotenancy 24 Metes and Bounds Survey—West Pine Valley Road 58
Concurrent Ownership and the Role of the Legal Metes and Bounds Survey with Legal Description—
Assistant 29 Willow Creek Property 59
Other Legal Entities 30 ALTA/ASCM 1999 Survey Standards 60
Corporations 30 Survey Review Checklist 64
v
vi CONTENTS
Chapter 4 Chapter 6
PUBLIC REGULATION CONTRACTS 112
AND ENCUMBRANCES 66 Requirements of a Valid Contract 113
Public Regulation 67 Legal Capacity to Contract 113
Zoning 67 Mutual Agreement 116
Building Codes and Subdivision Regulations 68 Consideration 118
Environmental Protection Laws 68 Lawful Purpose 118
Case: Shackford & Gooch, Inc. et al. v. The Town Written Agreements 118
of Kennebunk et al. 69 Remedies for Breach of a Real Estate Contract 119
Environmental Law on the Internet 72 Specific Performance 119
Power of Eminent Domain 72 Money Damages 119
Taxation 73 Rescission 120
Federal and State Income Tax Liens 74 Liquidated Damages 120
Private Encumbrances 74 Real Estate Broker 123
Judgment Liens 74 Case: Southeastern Land Fund, Inc. v. Real Estate
Mechanics’ and Materialmen’s Liens 74 World, Inc. 121
Mortgages and Trust Deeds 76 Agency Relationship 123
Easements 76 Services Provided by a Real Estate Broker 124
Restrictive Covenants 76 Listing Agreements 125
Ethics: Abandonment of Work 76 Open Listing 125
Summary 77 Exclusive Listing 125
Key Terms 77 Exclusive Right-to-Sell Listing 125
Review Questions 77 Real Estate Brokers and the Internet 129
Practical Assignments 77 Taxation and the Sale of Real Property 129
Addendum 78 Federal Income Tax 129
R-4 Single-Family Residential District Federal Income Tax on the Sale of a Home 130
Regulations 78 Federal Income Tax on the Sale of Commercial
CVI Community Business District Regulations 81 Property 130
Townhouse Restrictions 85 Summary 131
Ethics: Commingling of Client Funds 132
Key Terms 132
Chapter 5
Review Questions 133
EASEMENTS AND LICENSES 95
Case Problems 133
Easements 96 Practical Assignments 134
Creation of Easements 96
Checklist: For Preparation of an Easement 99
Case: Russakoff v. Scruggs 101 Chapter 7
Termination of Easements 104 PREPARATION AND REVIEW OF A REAL
Licenses 104 ESTATE CONTRACT 135
Practice Tips for the Legal Assistant 105 Sydney’s Real Estate Contract 136
Ethics: False Witness 105 Elements in a Real Estate Contract 137
Summary 106 The Parties 137
Key Terms 106 Consideration 137
Review Questions 106 The Agreement 138
Case Problems 107 The Property 138
Practical Assignments 107 The Price 139
Addendum: Forms and Exhibits 107 The Method of Payment 139
Sanitary Sewer Easement and Ingress and Egress Quality of Title 141
Easement 108 Possession of the Property 142
An Electric Power Company Right-of-Way Closing or Settlement 142
Easement 110 Closing or Settlement Documents 143
CONTENTS vii
Proration, Closing Costs, and Financial Chapter 8
Adjustments 144 DEEDS 202
Condition of the Property and Risk of Loss 145 Historical Development of Deeds 203
Earnest Money 146 Types of Deeds 204
Brokers 147 General Warranty Deed 204
Survival 148 Limited (Special) Warranty Deed 205
Assignment of Contract 148 Case: Lunsford v. King 206
Time Is of the Essence 149 Quitclaim Deed 206
Warranties of the Parties 149 Executors and Administrators Deeds 207
Contingencies 150 Trustee’s Deeds 207
Definitions 151 Basic Requirements of a Valid Deed 207
Default 151 Written Instrument 207
Notice 151 Competent Grantor 208
Entire Agreement 151 Identity of the Grantee 208
Applicable Law 152 Words of Conveyance 208
Additional Provisions 152 Description of the Property 208
Offer and Acceptance 152 Consideration 208
Execution 152 Signature of Grantor 208
Caveat Emptor and the Seller Disclosure Form 153 Witnesses of Deeds 208
Special Commercial Contract Issues 154 Delivery to Grantee 209
Description of the Property 154 Preparation of a Valid Deed 209
Representations, Warranties, and Caption 209
Convenants 154 Premises or Preamble 209
Purchaser’s Inspection or “Free Look” 155 Granting Clause 209
Closing Documents 155 Description 209
Rent Prorations 157 Habendum 209
Lease Commissions 158 Warranty Clause 210
Security Deposits 159 Testimonium 211
Seller’s Covenants Regarding Operation Completing Sections of a Deed 211
of Property 159 Preamble 211
Hazardous Materials 160 Granting Clause 212
Idemnification 160 Description 212
Seller’s Disclaimer of Warranty 161 Testimonium 213
Options 161 Practical Exercises in Deed Preparation 214
Checklist: For Preparation or Review of Correction of Deeds 218
Commercial Real Estate Contract 162 Reformation and Cancellation of Deed 218
Contracts and Computers 165 Practical Tips for the Legal Assistant 219
Ethics: Illegal or Fraudulent Activity 165 Grantor 220
Summary 166 Grantee 220
Key Terms 166 Legal Description 220
Review Questions 166 Witnessing a Deed 220
Case Problems 166 Ethics: Falsification of Documents 221
Practical Assignments 167 Checklist: For Preparing a Deed 221
Addendum 167 Summary 222
Purchase and Sale Agreement 169 Key Terms 222
Contract for Purchase and Sale of Large Tract Review Questions 222
of Vacant Land 174 Case Problems 222
Sellers Property Disclosure Statement 180 Practical Assignments 223
Contract for Purchase and Sale of Retail Shopping Addendum 223
Center 185 General Warranty Deed—North Carolina 224
Option to Purchase 201 General Warranty Deed—Texas 226
viii CONTENTS
Warranty Deed (Joint Tenancy)—Illinois 228 Case: Acord v. Jones 265
Limited Warranty Deed—Georgia 229 Mortgages, Deeds of Trust, and Security Deeds 266
Quitclaim Deed—Georgia 230 Requirements of a Mortgage 266
Quitclaim Deed—California 231 Checklist: Preparation of a Note 267
Executor’s Deed—New York 232 Parties to a Mortgage 268
Administrator’s Deed—Georgia 234 Secured Debt 268
Trustee Deed—Georgia 235 Secured Property 269
Assignment of Mortgage 269
Chapter 9 Transfer of Property Encumbered by a Mortgage 269
FINANCING SOURCES IN REAL ESTATE “Subject to” versus “Assumption” 270
TRANSACTIONS 236 Cancellation or Satisfaction of Mortgage 271
Sources of Mortgage Loans 237 Second Mortgage Loans 271
Savings and Loan Associations 237 Foreclosure and Other Mortgage Remedies 273
Commercial Banks 237 Foreclosure 273
Mutual Savings Banks 238 Remedies Other Than Foreclosure 274
Life Insurance Companies 238 Waiver of Default 275
Credit Unions 238 Debtor’s Remedies or Defenses to Foreclosure 275
Pension Funds 238 Injunction 275
Mortgage Banking Companies 238 Suit for Conversion 275
Issuers of Mortgage-Backed Bonds 239 Bankruptcy 275
Types of Loans 239 Ethics: Confidentiality of Client Information 276
Conventional Loans 239 Summary 277
Insured or Guaranteed Loans 239 Key Terms 277
Sub-Prime L:ending 240 Review Questions 278
Private Mortgage Insurance 240 Case Problems 278
Secondary Market 241 Practical Assignments 279
Fannie Mae and Freddie Mac 241 Addendum 279
Permanent and Construction Loans 241 Fannie Mae/Freddie Mac Residential Fixed
Interest 242 Rate Note 280
Payment Plans 242 Fannie Mae/Freddie Mac Residential Adjustable
Ethics: Overbilling 244 Rate Note 283
Summary 244 Commercial Loan Note 287
Key Terms 244 Payment Guaranty 291
Review Questions 244 Florida Mortgage 293
Case Problems 245 North Carolina Deed of Trust 296
Practical Assignements 245 Iowa—Fannie Mae/Freddie Mac Uniform
Addendum 245 Instrument 298
Amortization Calculator 246 Georgia Commercial Deed to Secure Debt 314
Schedule of Direct Reduction Loan 247
Chapter 11
Chapter 10 MORTGAGE FORMS AND PROVISIONS 317
LEGAL ASPECTS OF REAL ESTATE Residential Mortgage Provisions 318
FINANCE 259 Transfer of Rights in the Property 318
Promissory Note 260 Uniform Covenants 318
Endorsement 261 Nonuniform Covenants 320
Payment 262 Commercial Mortgage Provisions 320
Prepayment 263 Assignment of Rents and Leases 337
Usury 264 Security Agreement 337
Execution 264 Books, Records, and Financial Statements 338
Practice Tips for the Legal Assistant 264 Hazardous Waste 338
Guaranty 264 Nonrecourse or Exculpation Provisions 339
CONTENTS ix
Miscellaneous Commercial Loan Documents 340 Summary 378
Security Agreement and Financing Statement 340 Key Terms 378
Assignment of Rents 342 Checklist: Ordering or Performing a Title
Construction Loan Agreement 342 Examination 378
Role of the Legal Assistant 344 Review Questions 379
Ethics: Misrepresentation 344 Case Problems 379
Summary 345 Practical Assignments 380
Key Terms 345
Checklist: Preparation of a Mortgage 345 Chapter 13
Review Questions 346 TITLE INSURANCE 381
Case Problems 346
Owner’s Policy 383
Practical Assignments 347
Insuring Provisions of an ALTA Owner’s Policy 384
Addendum 347
Exclusions from Coverage 385
Assignment of Leases and Rents 348
Case: Title & Trust Company of Florida v. Barrows 386
Construction and/or Development Loan Agreement 348
Schedule A 388
Schedule B 390
Chapter 12 Mortgage or Loan Policies 393
TITLE EXAMINATIONS 357 Insurance Provisions 394
Bona Fide Purchaser for Value Rule 358 Miscellaneous Provisions 395
Recording Statutes 360 Endorsements 396
Case: City of Richland Hills v. Bertelsen 361 Construction Title Insurance 397
Practice Tips for Ordering a Title Examination 362 Claims Procedures under Title Insurance Policies 397
Information Needed to Do an Examination 363 Commitments for Title Insurance 397
Examining Title to Real Property 364 Practice Tips for the Preparation and Review
Place to Search 364 of a Title Insurance Commitment 398
Period of Examination 364 Practice Tips for the Preparation and Review
What to Search 364 of a Title Insurance Policy 399
Reviewing the Various Instruments in the Title Insurance and the Internet 401
Chain of Title 366 Ethics: Personal Conflict of Interest 401
Other Things to Examine 366 Summary 402
Preliminary Title Report 368 Key Terms 402
Title Examination Example 368 Checklist: Preparation of a Title Insurance Policy 402
Title Defects and Problems 370 Review Questions 403
Record Title Holder 370 Case Problems 403
Breaks in the Chain of Title 371 Acknowledgment 404
Errors in Prior Recorded Deeds 371 Practical Assignment 404
Name Variances 372 Addendum 404
Improper and Missing Power of Attorney 372 Owners’ Policy—ALTA 405
Sales Contracts, Options, and Leases 372 Owner’s Affidavit 411
Unsatisfied or Unreleased Mortgages 372 Completed Owner’s Policy of Title Insurance 412
Notice of Lis Pendens 373 Loan Policy 414
Easements 373 Zoning Endorsement 420
Restrictive Covenants and Conditions 373 Comprehensive Endorsement 421
Mechanics’ and Materialmen’s Liens 374 Survey Endorsement 422
UCC Financing Statements 374 Access Endorsement 423
Judgment Liens 374 Contiguity Endorsement 423
Tax Liens 374 Usury Endorsement 424
Title through Estates 375 Utility Facility Endorsement 425
Role of a Legal Assistant and Practice Tips 376 Subdivision Endorsement 425
Record Rooms Embrace New Technology 377 Title Commitment 426
Ethics: Document Falsification 377 Title Opinion 430
x CONTENTS
Title Examination Form for Practical Leasehold Loans 461
Assignment 433 The Closing and Aftermath 462
Title Commitment Forms for Practical Disbursing, Recording, and Transmitting Final
Assignment 435 Documents 463
Final Closeout by the Legal Assistant 463
Chapter 14 Checklist: Real Estate Closing 464
REAL ESTATE CLOSINGS 438 New Technology for Document Production 466
The Environment 439 Ethics: Conflicts of Interest 467
Anatomy of a Real Estate Closing 440 Summary 467
File Creation 441 Key Terms 468
Information Gathering 441 Review Questions 468
Reviewing the Real Estate Contract 441 Practical Assignments 468
Contact with Seller, Purchaser, and Broker Acknowledgments 468
by the Legal Assistant 442 Addendum 468
Checklist: Closing 443 Sample Contract for Closing Checklist 469
Ordering the Title Examination 446 Mortgage Loan Commitment 472
Ordering the Survey 448
Ordering Hazard and Fire Insurance 448 Chapter 15
Obtaining the Termite Clearance Letter or Bond 449 GOVERNMENT REGULATION OF REAL
Reviewing the Title Examination 449 ESTATE CLOSINGS 477
Satisfaction of Loans and Liens 449 Real Estate Settlement Procedures Act 478
A Legal Assistant’s Review of the Mortgage Loan Transactions Subject to RESPA 478
Commitment 451 Exemptions from RESPA 479
Parties 451 Required Disclosures and Prohibitions of RESPA 479
Loan Amount 451 Truth-in-Lending Act 481
Interest Rate 451 Disclosures for Closed-End Real Property
Term of Loan 452 Transactions 481
Repayment Terms 452 Insurance Charges 483
Prepayment Terms 452 Exempt Transactions from Truth-in-Lending 483
Security 452 Right of Rescission 483
Appraisal 452 Home Ownership Equity Protections Act 484
Insurance 452 Adjustable Interest Rate Disclosures 485
Escrow 453 Types of Loans Covered by ARM Disclosure
Title Insurance 453 Requirements 485
Survey 453 When Must ARM Disclosures Be Made? 485
Compliance with Law 453 Content of the Disclosure 486
Financial Documents 453 Subsequent Disclosures 486
Documents 453 Index Requirements 486
Defaults and Late Charges 454 Interest Rate Cap 486
Commitment Fee 454 Checklist: Disclosure Forms 487
Loan Expenses 454 Ethics: Communication with Parties
Closing and Commitment Expiration Date 454 Represented by an Attorney 487
Disbursement of Loan Proceeds 454 Summary 488
Acceptance of a Loan Commitment 454 Key Terms 488
Assignability 454 Review Questions 488
Checklist: Loan Commitment for a Residential Case Problems 488
Loan 455 Acknowledgment 489
Checklist: Loan Commitment for a Commercial Addendum 489
Loan 456 HUD-1 Settlement Statement 490
Special Provisions in a Construction Loan Truth-in-Lending Disclosure Statement 492
Commitment 461 Rescission Model Form (General) 493
Hazardous Waste 461 Nonrescind Statement 493
CONTENTS xi
Chapter 16 Loan Commitment 530
REAL ESTATE CLOSING FORMS AND Title Examination 531
EXAMPLES 494 Corporate Resolution 531
Affidavits 495 Foreign Person Affidavit 532
Title Affidavit 496 Owner’s Affidavit 533
Hazardous Waste Affidavit 496 Transfer Tax Certificate 534
Affidavit of No Change 496 Warranty Deed 535
Same Name Affidavit 496 General Warranty Bill of Sale 536
Similar Name Affidavit 496 Truth-in-Lending Disclosure Statement 537
Foreign Person Affidavit 497 Owner’s Affidavit 538
Sale and Transfer Documents 498 Promissory Note 540
Deed 498 Security Deed 543
Bill of Sale 499 Settlement Statement 559
Assignment of Warranties 501
Assignment of Leases 501 Chapter 17
Assignment of Contracts 501 CONDOMINIUMS AND COOPERATIVES 561
Loan Documents 501 Condominium 562
Miscellaneous Real Estate Closing Documents 504 Birth of a Condominium 562
Corporate Resolution 504 Articles and Bylaws of Condominium
Agreement Regarding Survival of Loan Association 563
Commitment 504 Case: Forest Villas Condominium Association,
Indemnity of Fees 504 Inc. v. Camerio et al. 565
Attorney’s Opinion 506 Practice Tips for the Legal Assistant 566
Compliance Agreements 511 Cooperative 566
1099-B Report Form 511 Checklist: Condominium Checklist 567
Settlement or Closing Statement 511 Differences between Condominiums
Residential Closing Example 519 and Cooperatives 567
Checklist: Residential Closing Example 519 Time-Shares 568
Title Examination 520 Ethics: Legal Assistant Correspondence 568
Title Commitment 520 Summary 569
Survey 520 Key Terms 569
Corporate Resolution 520 Review Questions 569
Foreign Person Affidavit 520 Case Problems 569
Owner’s Affidavit 520 Practical Assignments 570
Transfer Tax Certificate 521 Addendum 570
Warranty Deed 521 State Condominium Act Requirements
Bill of Sale 521 for Declaration 570
Termite Letter 521 Condominium Declaration 573
Truth-in-Lending Disclosure Statement 521 State Condominium Code Requirements for
Borrower’s Affidavit 521 Condominium Plat 583
Promissory Note 521 Articles of Incorporation 585
Deed to Secure Debt 521 Condominium Association Bylaws 587
Hazard Insurance 521
Settlement Statement 522
Ethics: Case Problem 524 Chapter 18
Summary 525 LEASES 595
Key Terms 525 Common Law and Leases 596
Review Questions 525 Commercial Lease Provisions 596
Case Problems 525 Parties to Lease 597
Practical Assignments 526 Premises 597
Addendum 527 Use 597
Sales Contract 528 Term 598
xii CONTENTS
Possession and Commencement of the Rent 598 Special Sublease Issues 612
Rent 598 Provisions Normally Contained in a Sublease 613
Percentage Rent 598 Lease Guaranty 613
Gross versus Net Lease 601 Checklist: Preparation of a Residential Lease 614
Rent Escalation Clauses 602 Checklist: Preparation of Commercial Lease 615
Maintenance and Alterations of Premises 603 Ethics: Legal Needs of the Poor 617
Insurance 604 Summary 617
Damage or Destruction to the Premises 604 Key Terms 617
Obligation of Repair 605 Review Questions 617
Condemnation and Eminent Domain 605 Case Problems 618
Default 605 Practical Assignments 618
Landlord’s Remedies for Tenant’s Default 605 Addendum 618
Landlord’s Right to Perform Tenant’s Estoppel Certificate 619
Obligations 606 Short-Form Memorandum 620
Landlord’s Lien 608 Subordination, Attornment, and Nondisturbance
Grace Periods 608 Agreement 621
Tenant’s Remedies for Landlord’s Default 609 Guaranty of Lease 624
Quiet Enjoyment 609 Home or Apartment Lease 626
Surrender the Premises 609 Small Commercial Retail Space Lease 628
Estoppel Certificate 610
Memorandum of Lease 610
GLOSSARY 631
Limitation on the Landlord’s Liability 610
Assignment, Subletting, or Mortgaging INDEX 639
of the Leased Premises 611
