Extra Help Explanations

 

PROPERTY OWNERSHIP††††††††††††††††††† CONTRACTS

 

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PROPERTY OWNERSHIP

 

1.An estate of at least a lifetime, or forever, is a Freehold Estate.This is an ownership estate for an indefinite duration, and you can remember that this means someone has actual OWNERSHIP of the property.

 

2.A Life Estate is actual ownership, however that ownership is limited to the life of the owner or some other person, meaning it cannot be inherited.

 

3.If ownership of that life estate REVERTS back to the grantor (or the grantorís estate) upon the death of the owner or other person whose life the estate is based on, that is called a Life Estate IN REVERSION.

 

4.If ownership of that life estate does not go back to the original grantor, but instead goes on to a third party, that is called a Life Estate in Remainder.

 

5.The third party that an Estate in Remainder goes to is called the Remainderman (regardless of gender).

 

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CONTRACTS

 

1.A unilateral contract is one where one side is obligated, but the other side isnít.For example, a coupon is a unilateral contract.The coupon does not obligate you to use a product or service, but if you do, the other side is obligated to give you a discount.

 

2.An Exclusive Right-to-Sell Listing is a bilateral contract, because both sides have an obligation.The agent is obligated to market the property; the seller is obligated to pay a commission if the property sells.

 

3.Probably the two best real estate examples of a unilateral contract are an Option Contract and an Open Listing (there could be more examples).Under an option contract, the buyer does not have to buy, but if they decide to buy, the seller is obligated to sell.Under an open listing, the agent is not obligated to market the property, but if they produce an acceptable buyer (meaning the seller accepts a purchase contract presented by the agent), the seller is obligated to pay a commission.

 

4.In an option contract, the seller is called the Optionor, and the buyer is called the Optionee.

 

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MORE PROPERTY OWNERSHIP

 

1.An encumbrance is a claim or liability that attaches to real property.That means that it will lower the value of the property in some way.Attaching to real property means it can transfer from one owner to another if it is not removed at settlement.

 

2.An easement is the RIGHT to use someone elseís property for a specific purpose.The owner of the property that the easement is on could not prohibit that right from being exercised.

 

3.An easement appurtenant (or appurtenant easement) is the right to use the land of a neighbor (not necessarily an adjoining property), for example, if there is a driveway over one property to get to another property.

 

4.The property that benefits from an appurtenant easement is called the Dominant Tenement.Whoever owns that property will be entitled to the use of the easement.

 

5.The property the easement runs over is called the Servient Tenement.That encumbrance will transfer to whomever owns that property.

 

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MORE CONTRACTS

 

1.A contract is valid when all of the essential elements have been met.The contract is binding on all parties.

 

2.If a contract is missing one or more essential elements, the contract is void, meaning it is no good and cannot go through.

 

3.A contract is voidable if it could be considered valid, but one or more parties has the right to make it void.

 

4.A contract may be voidable under a variety of circumstances.If one party is not legally competent (either a minor or not of sound mind when they agree to the contract), the contract would be voidable by the minor or the person who was not of sound mind.If they were still not of sound mind, they could not complete the contract, because one of the essential elements would be missing.A contract also could be voidable when you are missing Reality of Consent, meaning it is not a voluntary agreement or one of the parties was not fully aware of what they were doing.This could happen with certain mistakes on the contract, so they are not getting what they think; misrepresentation, where an agent fails to present a true picture (may be unintentional); fraud; undue influence, where someone puts too much pressure on a party to agree to a contract; or duress, which is forcing action or inaction against a personís will (like holding a gun to their head).All of these would make the contract VOIDABLE by the injured party, not automatically void.Even if someone held a gun to your head, you might decide that you liked the deal and wanted to go ahead with a contract.

 

5.If a contract is valid, but neither party can sue for performance, that is Unenforceable.It could be valid, in that if both parties wanted to go through with it, they could, but if one party backs out, the other party could not sue in court to force them to go through with it.The courts would not hear the case on an unenforceable contract.

 

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DEEDS

 

1.A Correction Deed, Confirmatory Deed or Deed of Confirmation makes a correction in a previous deed.

 

2.Under a Special Warranty Deed, the grantor is warranting the title to the property for the time they (the grantor) owned the property.

 

3.Under a General Warranty Deed, the grantor warrants the title against anything that has ever happened to the title to the property.

 

4.Under a Bargain and Sale Deed, the grantor is implying ownership to the property (i.e. they definitely have the right to convey the property), but they are making NO warranties to the title to the property.

 

5.Under a Quitclaim Deed, the signer may or may not own the property (or have some interest).They are giving up any interest that they MIGHT have.This could be used if there is a dispute or question over who owns the property.

 

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