Real Estate Title Transfer

A real estate title indicates both the ownership of the land and provides evidence of that ownership. The deed is the printed document showing ownership, and is the instrument by which title is conveyed. The deed must be recorded, usually at the county courthouse in which the real estate is located.

The title can be transferred to another party either voluntarily, usually as a sale, but sometimes as a gift, or involuntarily, by operation of law.

Voluntary Alienation

Voluntary alienation is the legal term for the voluntary conveyance of title. If the owner of the real estate is still alive, then the conveyance is achieved by executing a deed to convey title; otherwise, title is conveyed through a will, and will be subject to probate. Voluntary alienation, either as a sale or a gift, must be executed by the use of a deed to transfer title.

The deed is a written document that conveys transfer of title in real estate. The statute of frauds requires that the deed be in writing. The grantor, the original owner of the land conveys his interest to the grantee, the recipient of the title.

For a deed to be valid, it must meet the following requirements:

• The grantor must have legal capacity, meaning the grantor is of sound mind and lawful age — in most states, the minimum age is 18. If a deed is executed by a minor, or if the grantor is mentally incompetent, title transfer may be voidable, but is not void. However, if the grantor is declared legally incompetent, then the title transfer is void, in which case, a title transfer requires court approval. The grantor's name must be spelled correctly, and include any past names, such as a maiden name. For example, Marilyn Smith, formerly Marilyn Miller.
• There must be enough information in the deed to identify the grantee with reasonable certainty. If the title is being transferred to more than 1 person, then the form of ownership must be specified, such as joint tenancy or tenancy in common.
• There must be a granting clause expressing conveyance, with the intention to convey title, and the type of ownership, such as a fee simple or life estate, for instance. To grant title, the grantor must have at least a vested interest, which is either a present interest in the land, or a future interest.
• The deed must also state the consideration — what the seller received for the transfer, which is usually the amount of money paid, but, in the case of a gift, could be for love and affection, or a nominal consideration of a small amount and other valuable consideration.
• A legal description that accurately identifies the property.
• Any exceptions or reservations, such as encumbrances or deed restrictions; the grantor may retain certain rights, such as an easement over the land.
• There may be an habendum clause that further limits ownership rights, such as prohibiting certain activities, like gambling or drinking.
• All owners of a property must sign the deed — including spouses in those states that grant the spouse marital or homestead rights. Some states also require witnesses. An attorney-in-fact with a power of attorney may sign for the grantor.
• An acknowledgement — a formal declaration, before a notary public, justice of the peace, or other official designated by state law — that conveyance is voluntary and that the grantor has the right to convey title. The form of the acknowledgement should conform to the state law of the state in which the property is located. While acknowledgement is not necessary for a valid deed, except when state statute requires it, it may be ineligible for recording.
• The deed must be delivered and accepted by the grantee; it can be delivered personally or by a 3^rd party, such as an escrow agent (aka settlement agent). The date of the delivery and acceptance by the grantee is considered the date of the transfer, although in those states using the Torrens system, the date of transfer is considered the date when the deed has been examined and accepted for registration.

Involuntary Alienation

Involuntary alienation is the transfer of real estate by law and without the owner's consent. There are 4 methods by which this is accomplished: foreclosure, eminent domain, adverse possession, and by escheat.

Foreclosure

Foreclosure is the legal process by which a property is sold to satisfy a debt, usually a debt by which the property was purchased. Often, the property is sold by the lender to pay off the mortgage on the property.

Eminent Domain

Sometimes the government or one of its agencies, or a public utility or other private enterprise, takes property by exercising its power of eminent domain, which is the right of the entity to acquire property, through the process of condemnation, to use for a public purpose, such as building a road or a school. The owner of the property is paid the fair market value for the taking.

Adverse Possession

Adverse possession is the claim on a property by someone who has occupied the property for several years. To be successful, the adverse possessor — the squatter — must have occupied the land continuously for at least the number of years required by state law for a successful claim.

This occupation must satisfy 5 requirements:

1. open — that is, easily seen by inspection;
2. notorious in that it was known by others;
3. continuous — no breaks in its use;
4. adverse to the registered owner's possession; and
5. hostile — without the owner's consent.

The amount of time of continuous use that is required to establish adverse possession is stipulated by state law and ranges from 5 to 30 years. However, the continuous occupation does not have to be by the same person. Through the legal concept of tacking, an adverse possessor can satisfy the time requirement if there were other adverse possessors before him, with the total amount of time that the land was continuously occupied being equal to or exceeding the time required by state law.

A claimant for a property under adverse possession must file the claim in court to receive legal title. If the adverse possessor does not file a court claim, then he will have an easement by prescription.

Escheat

If a landowner dies without a will and without legal heirs, then the property reverts to the state through escheat. However, if a landowner has relatives and dies intestate (without a will), then his property will be distributed to the relatives according to the state's statute of descent and distribution. The spouse or children will receive the bulk of the estate, or, if the property owner had no spouse or children, then the property will be distributed to other relatives. Most states give higher priority to next of kin.