Principles of California Transfer of title (or ownership) from the seller to the

Real Estate buyer = the culmination of a real estate transaction.

Different ways title to real property can be
transferred:
1) Voluntarily transfers- Transfer by deed (the most
Lesson 3: common method)
Transfer of Real 2) Involuntarily transfers- foreclosure, condemnation,
or adverse possession
Property 3) The recording system-who owns what interest in a
piece of property
4) The importance of title insurance

Alienation Alienation is a general term that refers to all of the

» Alienation: Process of transferring
ownership of (title to) real property from one
party to another.
— May be voluntary or involuntary.
different methods by which real property can be
transferred from one person to another.
Whether accomplished by means of a deed, a will,
foreclosure, or in any other way, a transfer of
ownership is a form of alienation.

Alienation is the opposite of acquisition of property.

Alienation
Voluntary alienation

» Voluntary alienation: An owner voluntarily

transfers an interest in her land to someone
else.
§ Patents
An owner may choose to give away or sell his or her
§ Deeds
property to someone else/title can be transferred
§ Wills
without any action by the owner/ against the owner's
Dedication
will. eg: a court-ordered foreclosure.

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Voluntary Alienation
Patents
» Patent: Instrument used to convey
government land to a private individual.
When the United States was founded, the new
government claimed ownership of all the land
within its territory that was not already privately
owned. To transfer property into private hands,
the government gave an individual or a company
a document called a patent. The document on
your screen, dated June 1st, 1861, is a federal
patent for some land in Northern California. It
was signed by a representative of the federal
government on behalf of Abraham Lincoln, who
was president at the time of the conveyance.

Voluntary Alienation
Deeds

» Deed: Instrument which, when properly

executed and delivered, conveys title to real
property from the grantor to the grantee.
Deed do not conveys personal property.

- Most common method of voluntary alienation

- The transfer of real property from the grantor
to the grantee by means of a deed is
referred to as a conveyance.

Deeds
Parties to a deed

» Grantor: One who grants an interest in real

property to another.

» Grantee: One who receives a grant of real

property.

- Bill of Sale is the document used to transfer

title to personal property from a seller to a
buyer.

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 Deeds
Types of Deeds
» Grant deed
» Quitclaim deed
» Trustee’s deed
» Deeds executed by court order
» Warranty deed
» Special warranty deed
Types of Deeds
Grant Deed
» Grant deed warrants that grantor has not:
— conveyed title to anyone else
— caused any undisclosed encumbrances
to attach to the property
» Both warranties apply even if not stated in
the deed.
Grant Deed
After-acquired title
» Grant deed conveys after-acquired title.
» After-acquired title: Title acquired by a
grantor after she attempted to convey
property she didn’t yet own.
The grant deed is the most commonly used type
of deed in CA.A grant deed must use the term
"grant" in its words of conveyance.
2 warrants:
1) the grantor has not previously conveyed title to
anyone else, and
2) the grantor has not caused any encumbrances
to attach to the property other than those already
disclosed.
These warranties apply even if not expressly
promised in the grant deed.
It's impossible to convey something you don't
own. If a deed states that it's conveying a
particular property, but the grantor doesn't
actually own that property, the deed can't transfer
title to the grantee. But a grant deed will convey
after-acquired title to the grantee.
After-acquired title is an interest in the property
that the grantor acquires after executing the deed.
Example: Under their ailing father's will, Steve
and John are to inherit their father's entire estate,
sharing it fifty-fifty. While their father is still alive,
Steve sells his 50% interest in one of the estate
properties to John.Steve gives John a grant deed.
At this point, Steve's deed doesn't transfer title to
John, since Steve doesn't hold title. But after their
father dies, Steve's after-acquired title will pass to
John through the grant deed.
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 Types of Deeds
Quitclaim deed
» A quit-claim deed:
— contains no warranties
— does not convey after-acquired title
— conveys only the interest held by the
grantor at the time it is given
If the grantor has no interest in the property
at that point, the quitclaim deed conveys
nothing to the grantee.
Quitclaim Deed
Cloud on title
» Cloud on title: A claim, encumbrance, or
apparent defect that makes the title to a
property unmarketable.
Example: Construction lien filed
against the property.
» A quitclaim deed is often used to “cure” a
cloud on the title.
Quitclaim Deed
Reformation deed
» One common reason for using a quitclaim
deed is to correct an error in an earlier
deed, e.g. spelling mistakes.
» A quitclaim deed used this way may be
referred to as a reformation deed.
A common reason for using a quitclaim deed is to
clear up minor title defects (clouds on the title).
"Clouds" - problems appearing in the public
record that cast doubt on the status of the title.
A cloud might be created by:
- a technical flaw in an earlier deed, such as a
typographical error in the property description.
- unreleased lien, which indicates that there may
be an unresolved claim against the property.
Reformation deed example:
Carla bought a home when she was single. She
took title under her maiden name, Carla
Jennings. She later married and took her
husband's name, Larkin. When Carla sold the
home, she executed the grant deed under her
married name, Carla Larkin. This created a cloud
on the title, because the public record shows that
Carla Jennings bought the home, but Carla
Larkin sold it. To remove the cloud from the title,
the new owners might ask Carla to give them a
quitclaim deed signed Carla Jennings.
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 Quitclaim deeds are also sometimes used in
situations involving co-ownership, when one co-
Quitclaim Deed owner is conveying his interest in the property to
Language the other co-owner. eg: part of a divorce
settlement, one ex-spouse might quitclaim his
Should use the words:
interest in the family home to the other ex-
— release
spouse.
— remise
— quitclaim A quitclaim deed is not appropriate for a
standard real estate transaction; a buyer should
Should NOT use the words: insist on a grant deed. If a seller tries to use a
— grant quitclaim deed, that should be a red flag for the
— convey buyer. There may be some problem with the title
that the seller hasn't disclosed

The general warranty deed - most commonly

used type of deed in many states outside CA. (In
CA, the reliance on title insurance to assure
Types of Deeds marketable title has led to the replacement of the
Trustee’s deed general warranty deed.)
The general warranty deed is the type of deed
that gives the greatest protection to the buyer. A
» Trustee’s deed: The deed given to a grantor under a general warranty deed makes five
successful bidder at a trustee’s sale (deed warranties, or covenants, to the grantee. These
of trust foreclosure).
covenants warrant against defects in the title that
occurred either before or during the grantor's
period of ownership. A special warranty deed
makes the same five promises, but the warranties
are limited to defects that arose during the
grantor's period of ownership. The grantor makes
no assurances about any defects that occurred
before he or she owned the property.

Types of Deeds Tax Deed - When the government forecloses on

Sheriff’s deed
» Sheriff’s deed: The deed used to transfer
property to the highest bidder at a court-
ordered foreclosure sale.
— Example: Mortgage foreclosure sale
property because the property taxes were't paid,
the foreclosure sale purchaser receives a tax
deed.
Gift Deed - If one party gives property to another,
she may use a gift deed. A gift deed is not
supported by consideration, and is the easiest for
a court to set aside if there is any hint it was
executed in order to defraud creditors.

5
 Summary
Patents and Deeds

» Alienation
» Patent
» Deed
» Grant deed
» Quitclaim deed

Requirements for a Valid Deed

» Be in writing and signed

» Identify grantor(s ) and grantee(s)
» Be signed by a competent grantor
» Specify a living grantee
» Contain words of conveyance
» Have adequate description of the property

Requirements for a Valid Deed

In writing

» Under statute of frauds, deed to real

property must be in writing.

» Statute of frauds: Law requiring certain

contracts and other legal transactions to be
in writing and signed in order to be
enforceable.
Under the statute, an oral conveyance of title
to real property is not valid.

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 Requirements for a Valid Deed
Identify all parties

» Both the grantor(s) and the grantee(s) must

be identified in the deed.

» Grantee may be described rather than

referred to by name.
Example: Conrad Adams hereby grants
title to his only son.

Requirements for a Valid Deed

Signed by competent grantor

» Deed must be signed by the individual(s)

who will be bound by the transfer, and they
must be legally competent.

» Competent: Adult of sound mind, for the

purposes of entering into a contract. In CA
a Grantor must be at least 18 years old to
execute a valid deed.

Important things about the grantor's signature:

Requirements for a Valid Deed
Signed by competent grantor
» If a grantor can’t sign her name ( due to
disability or illiteracy) she can make her
mark instead, but the mark must include
witness signatures.
1) if the grantor's signature is determined to be
a forgery, the deed is void.
2) if the grantor can't sign the deed himself, it
may be signed by the grantor's attorney in fact.
(An attorney in fact will write the principal's
name, followed by her own signature as
attorney in fact.)

Attorneys in fact are not necessarily lawyers.

They're people that the grantors have
appointed as their representatives.

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 Signed by Competent Grantor If the power of attorney specifically authorizes it,
Power of attorney a deed can be executed on the grantor's behalf
» Power of attorney: A document authorizing/appointing by the attorney in fact.
another party (attorney in fact) to act on behalf of
the grantor.
» For an attorney in fact to sign a deed on a
grantor’s behalf, the power of attorney must:
— give the attorney in fact this authority, and
— be recorded in the county where the property
is located.
**An attorney in fact cannot deed the grantor's
property to himself/herself.

Signed by Competent Grantor

Transfer by corporation

» Deeds for corporate property are usually

signed by an authorized corporate
representative, and the corporate seal must
accompany the signature.

When the property being transferred is owned

Signed by Competent Grantor
More than one grantor
» All grantors must sign deed.
— A deed lacking a necessary signature is
invalid.
— An unnecessary signature does not
invalidate the transfer.
» Signatures of both husband and wife are
required to convey community property.
by more than one person, all of the owners
must sign the deed as grantors.
If the previous deed named several grantees,
all of those grantees should be signing the
new deed as grantors.
To convey community property, both spouses
must sign the deed. If a grantor is married, his
or her spouse should also sign the deed, even
if they don't think the property is community
property. This is an important precaution,
since it isn't always easy to tell which of a
couple's holdings are community property.

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 Requirements for a Valid Deed
Living grantee
- A grantee need not be competent for a
deed to be valid, but they must be alive (or
legally in existence, if a corporation.)
- A child (or mentally incompetent person)
can receive title to property, but can’t
convey title.
- A valid deed requires a living grantee.
If the grantee is fictious (i.e. nonexistent)
or dead, the deed does not transfer title.

Requirements for a Valid Deed

Words of conveyance
The deed must include "words of
Conveyance" or "the granting clause".

Words of conveyance: The explicitly stated

words indicating the grantor’s intent to
transfer an interest in property to the
grantee. The single word “grant” or "convey"
is usually sufficient.

Requirements for a Valid Deed

Adequate property description

» It’s advisable to use a property’s full legal

description in a deed, although a deed can
be valid without it if the property is identified
sufficiently.

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 Requirements for a Valid Deed
Additional Features
The Habendum Clause
An Exclusions and Reservations Clause
The Consideration/
Recital of Consideration
Date of Execution/ Conveyance
Most deeds have additional features that aren't
absolutely necessary:
-the habendum clause
-the exclusions and reservations clause
-the recital of consideration; and
-the date of execution.
The habendum clause typically follows the
granting clause, defines/ limits the grantee's
estate, may specify fee simple ownership or
some lesser interest (eg: a life estate)
Example: 'To have and to hold unto Dennis
Morrison, grantee, a life estate in the property
described herein.'
"The habendum clause" also called the "to have
and to hold clause".
If a deed doesn't have a habendum clause = a
fee simple absolute. If the grantor means to
convey anything less than a fee simple absolute,
it's important to include a habendum clause to
make that clear.
Most deeds contain a brief statement concerning
encumbrances, called an exclusions and
reservations clause. It lists any easements,
private restrictions, or liens that will burden the
grantee's title. valid encumbrances ordinarily
continue in effect even if they aren't listed in the
deed.
In most transactions, the consideration for the
conveyance is the purchase money that the
grantee gave the grantor in exchange for the
property. The consideration exchanged in a
transaction doesn't have to be stated in the deed
for the document to be valid. Even so, a recital
of consideration appears in many deeds. The
recital usually doesn't state the actual purchase
price. Instead, it says something like 'for good
and other valuable consideration.' The purpose
of the recital of consideration is to indicate that
the property wasn't a gift from the grantor to the
grantee. If the property were a gift, the grantor's
creditors might be able to assert their claims
against it.
A deed can be valid even though it's undated.
But as a matter of convenience, it's important to
include the date of the conveyance on the deed.
 Besides a valid deed, to carry out the
Property Conveyance conveyance, these steps are important to help
Acknowledgment, delivery, acceptance transfer title to the grantee:

1) Acknowledgment
» To actually convey property a valid deed
must be acknowledged and delivered by the 2) Delivery
grantor, and then accepted by the grantee. 3) Acceptance

Property Conveyance
Acknowledgment
» Acknowledgment: Grantor signing a legal
document in the presence of a formal witness
(e.g. a notary public) and that he signed
deed voluntarily, and witness adds official
documentation.
—Witness/Notary cannot have an interest
in transfer.
—Without acknowledgment, deed may still
be valid—but cannot be recorded.
An interest in transfer:
The notary who signs the statement cannot be an
interested party. And if the notary is an employee
of a corporation who is a party to the deed, the
notary may not have a personal interest in the
property, nor may she be an officer of the
corporation.
The grantor gives the notary public proof of
identity and signs a statement declaring that he is
signing the deed voluntarily. The notary also signs
a statement declaring that she witnessed the
acknowledgment of the document.

Strictly speaking, a valid deed can transfer title

even if it is not acknowledged. But in CA & many
other states, a deed cannot be recorded unless it
has been acknowledged.
Property Conveyance
Delivery

» Delivery: Formal transfer of deed from

grantor to grantee, resulting in transfer of title.
— Delivery must occur while grantor is alive.
— Grantor must intend to immediately
transfer title to grantee.
* Physical delivery to the grantee in person
isn't absolutely necessary.
* The grantor may give the deed to an agent
of the grantee (eg, an escrow agent)

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 The law presumes that a deed has been
Property Conveyance properly delivered and accepted if it's in the
Acceptance possession of the grantee, or if it has been
recorded. When a valid deed is delivered and
accepted, ownership of the property transfers
» Conveyance is completed when grantee
from the grantor to the grantee.
accepts deed.
— Deed may also be accepted by an agent.

The will is another type of document that may

be used to transfer property ownership
Voluntary Alienation voluntarily. A property owner uses a deed to
Wills transfer real property while he is alive, and he
uses a will to transfer it upon his death.
» Will: A written instrument disposing of
property upon the death of the maker (the
testator). Also called a testament. The witnesses sign a statement indicating that
the testator signed the document in their
» A valid Will must be: presence and declared it to be his or her will.
— in writing
— signed by the testator (the person making When a person dies leaving a valid will, he is
the will) said to have died testate.
-- Attested to by at least two or more
competent witnesses If he dies without a valid will, he is said to have
died intestate.

Wills
Holographic will A holographic will is an exception to the
requirement that all wills be witnessed.
» Holographic will: an unwitnessed will that is
dated, signed, and written entirely in the
testator's own handwriting, rather than
typewritten or filled in on a printed form.
— California recognizes holographic wills.
— Typewritten or pre-printed provisions will
be disregarded by a court, except for
statements of intent in a commercial form.

11

Wills
Terminology
» Beneficiary: Person who receives property
under terms of a will.
— Personal property is bequeathed to a
legatee.
— Real property is devised to a devisee.
» Executor: Person who carries out will and
settles estate (or administrator if no
executor named) after the testator's death.
He/She is appointed by the testator.
Wills
Probate
» Probate:The legal process of establishing
the validity of a will and distributing property
according to its terms is called probate.
In CA a will is probated at the superior
court level.
If a real estate broker sells estate property,
both the listing and commission must be
approved by the probate court.
Wills
IAEA
» If the will is administered under the
Independent Administration of Estates Act
(IAEA) the executor or administrator may
sell real property without court approval, if
the beneficiaries do not object.
A will may be used to transfer the testator's entire
estate, including both real property and personal
property.
A testator who transfers personal property by will
is said to bequeath the property.
The recipient is called a legatee.
When real property is transferred by will, the
testator is said to devise the property.
The recipient is called a devisee.
If no executor was named in the will, the court
will appoint a person(an administrator) to
manage and distribute the estate of the
deceased.
A probate sale may be necessary, in order to
divide the deceased person's estate among his
or her heirs. A broker may be involved in the
sale of probated real property, but the
commission rate will be set by court order. The
court must also approve any listing agreement
between a broker and a representative of the
estate. Any bid in a probate sale must be at least
90% of the property's appraised value to be
accepted by the court. Alternately, the
Independent Administration of Estates Act allows
the executor or administrator of an estate to sell
property without court approval if none of the
estate beneficiaries object.
12
 Summary
Voluntary Alienation
» Deed requirements
» Statute of frauds
» Words of conveyance
» Acknowledgement
» Delivery
» Wills
» Probate

Alienation
Involuntary alienation
Dedication - the transfer of real estate from
» Involuntary alienation: Transfer of property
private ownership to public ownership, without
interest against the will of the owner, or
without action by the owner. payment to the private owner. As we'll discuss
shortly, in some cases dedication is
» May occur through:
involuntary, but it can be a voluntary gift to the
—operation/ by rule of law
public. eg: a philanthropist might donate land
—external causes/ result of natural forces
to the city or county for a park.
—adverse possession

Involuntary Alienation Dedication - when private property is

Dedication
» Dedication: Private party transfers land to
the public.
— Sometimes voluntary, but is typically
required by a public entity.
transferred to public ownership, w/o
compensation to the private owner. It can be a
voluntary gift and the transfer is made under
some legal constraint. It is a gift only in the
sense that the owner is not paid for the
property. This type of transfer is called
involuntary dedication.

13

Involuntary Alienation
Statutory dedication
» Statutory dedication: A dedication required
by law, for example requiring the
dedication of property for sidewalks and
streets as a condition for subdivision
approval.
Involuntary Alienation
Intestate succession
» Intestate succession: When someone dies
without a valid will, the decedent’s property
passes according to the laws of descent.
» If no will, the lawful successors are called
heirs (instead of beneficiaries.)
Involuntary Alienation
Escheat
» When property owner dies without will or
any surviving heirs, property ownership
escheats (reverts) to the state.
» State is ultimate heir when no other rightful
heirs to the property exist.
- The state may also acquire ownership of
abandoned property through escheat.
The most common type of involuntary dedication
is statutory dedication. To obtain permission to
subdivide land, a developer is required to
dedicate some land in the subdivision for public
streets and utility easements. It's called statutory
dedication because the developer is complying
with procedures prescribed by law, in the relevant
statute.
Common law dedication results when a
government entity decides that a property owner
has acquiesced in public use of his property for a
prolonged period of time.
This dedication may take the form of an actual
transfer of ownership, or it may simply result in
the grant of an easement.
When a property owner dies intestate, title to the
property passes to the owner's nearest living
relatives according to the rules of "intestate
succession".
These rules are set forth in a state statute(章程,
規則;條例, 法令,法規;成文法)
In CA, the statute states that all community
property passes to a surviving spouse. If there is
one child, the owner's separate property is
divided one-half to the surviving spouse and
one-half to the child. If there is more than one
child, one-third of the owner's separate property
is given to the surviving spouse, and the
remaining two-thirds is divided among the
children.
Those who acquire property by intestate
succession receive it by "descent", rather than by
"devise" or "bequest'.
The probate court will appoint an administrator
to distribute the intestate person's real and
personal property to the heirs.
Many of the rules we discussed in regards to
probating a will also apply to the probate of an
intestate estate.
14

Involuntary Alienation
Condemnation
» Condemnation: Taking private property for
public use through power of eminent
domain. Constitutional Requirements:
—Gov intended use must be a public use.
—Gov must pay "Just compensation" to
owner of the property
» Power of eminent domain may be exercised
by government, or delegated to quasi-public
entities.
Involuntary Alienation
Inverse condemnation
» If a property owners feels that her property
has been taken or damaged by a public
entity, the owner may file an inverse
condemnation action to force the
government to pay the fair market value of
the property.
Involuntary Alienation
Court order
» Involuntary transfers of property interests
can also occur under court order. The most
common examples are:
—quiet title actions
—suits for partition
—foreclosure actions
—petitions for bankruptcy
If a government entity decides a piece of property is
needed for public use, it has the constitutional power
to buy the property from the owner, even if the owner
doesn't want to sell. This constitutional power is called
the power of eminent domain, and the legal procedure
used to exercise that power is called condemnation. A
forced sale in this context is sometimes called a
"government taking", or just a "taking".
Example: Suppose the state is planning a freeway that
will run through a residential neighborhood. The state
plans to buy many of the homes in the neighborhood
so that it can demolish them and clear a path for the
freeway. If a homeowner refuses to sell her property,
the state can file a condemnation lawsuit to force her
to sell. "Public use": Ted, a farmer, owns some fields
on the edge of Cloverville. The Cloverville town
council could condemn Ted's fields for use as a public
park. But it could not condemn the fields and turn
them over to another farmer. "Just compensation":
compensate the owner by paying the fair market value
of the property it is condemning.Power of eminent can
be granted to privately owned companies that serve a
public purpose, eg: a railroad or a utility company
may condemn property under certain circumstances.
When a private owner believes that some action by a
government entity has destroyed the value of his
property, the owner may file a lawsuit demanding just
compensation. This is called an inverse condemnation
lawsuit. For example, the city built an airport next to
Ken's chicken farm. The air traffic noise makes the
property unsuitable as a chicken farm, and its value is
severely reduced. If Ken files an inverse condemnation
lawsuit against the city, the court may order the city to
compensate him for his financial losses.
15
 When there's a cloud on a property owner's
title (the property is unmarketable), in some
cases a quitclaim deed can be used to clear
Court Order away a cloud.
Quiet title action
The owner and someone with a claim against
the property may be able to negotiate and
» Quiet title action: Court action intended to resolve their dispute. Then the claimant can
settle dispute over title to a particular clear the title by executing a quitclaim deed in
property. favor of the owner. If the parties can't agree,
there is a legal procedure that can resolve the
dispute and clear away the cloud. This is
called a "quiet title action".

In a quiet title action, the court considers the

evidence presented and decides who holds
what interest in the property.

A suit for partition is a way of dividing up

Court Order
Suits for partition
» Partition: Lawsuit brought by a co-owner to
have property divided. Once divided, each
co-owner will own his part in severalty.
— Co-owners may also partition property
by agreement.
property owned by more than one person.
If co-owners can't agree on how to divide the
property, or if they disagree about whether to
sell it, one or more of the co-owners can file a
suit for partition. The judge will decide how to
divide the property, and this decision will be
binding on all the co-owners.

If a physical division of the property isn't

feasible, the judge will order the property to be
sold and divide the proceeds among the co-
owners.

Court Order A creditor with a lien against a debtor's

Foreclosure
» Foreclosure: Sale of property pursuant to
court order to satisfy a lien (may be any
type of lien).
property has the right to foreclose on the
property if the debt isn't paid. To foreclose, the
creditor files a lawsuit asking the court to order
the property to be sold, so that the debt can be
paid out of the sale proceeds.

16

Court Order
Bankruptcy
» Bankruptcy: Property may also be
conveyed by order of a bankruptcy court.
The court has the authority to distribute or
sell the debtor’s property to satisfy creditor
claims.
Involuntary Alienation
Adverse possession
» Adverse possession:
Someone acquires legal title to owner
of record's property by occupying it over
a long period without the owner's
permission. One of the most interesting
forms of involuntary alienation.
Involuntary Alienation
Adverse possession
» Five requirements for adverse possession:
— actual, open, and notorious
— hostile to the owner’s interest
— under claim of right or color of title
— continuous & uninterrupted for five years
— adverse possessor must pay property taxes
during required period of possession.
Once a bankruptcy petition has been filed, the
court may order the debtor's property
distributed to creditors.
If the debtor owns real property, the court may
order it sold and the proceeds used to satisfy
the creditors' claims against the debtor.
Example:
Jasper and Alice own neighboring parcels of
land. Jasper mistakenly builds a fence 15 feet
over the boundary on Alice's property. Alice
doesn't recognize the mistake. Jasper's fence
remains in place for five years, the required
statutory period in CA. At the end of the five-
year period, title to the 15-foot strip of land
passes to Jasper by adverse possession.
The main purpose: to encourage the fullest and
most productive use of land. Title is transferred
from an owner who has ignored the property for
a long period of time to someone who is
actively putting it to use.
One important exception: property owned by
the government can't be adversely possessed.
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 Adverse Possession
Actual, open, and notorious
» Actual possession: Occupation and use of
the property in a manner appropriate to the
type of property.
» Open and notorious possession:
Possession of the property in a way that
gives the owner of record reasonable notice
their property interest is threatened.
Adverse Possession
Hostile to the owner’s interests
» Hostile possession: Possession without
the owner’s permission. The adverse
possessor must intend to claim ownership
of the property and defend that claim
against all parties.
Adverse Possession
Claim of right or color of title
» Refers to situations where an adverse
possessor has a good faith, but mistaken,
belief that she is the owner of the land.
— Example: Deed’s legal description
incorrectly shows the boundary extending
ten feet further than it really does. The
owner believes the additional land
belongs to her, so she fences it in.
"Actual Possession" - For agricultural property,
would mean putting the land to agricultural use.
Possession is open and notorious if it puts the true
owner on notice that someone else is making use
of the property. The adverse possessor's use must
be conspicuous, not hidden. This requirement
ensures that the true owner will have a chance to
prevent the adverse possession by ejecting the
adverse possessor from the property.
For possession to be hostile to the owner's
interest, the adverse possessor must act as if he
owns the property.As a general rule, possession is
considered hostile as long as the adverse
possessor does not have the true owner's
permission to be there.
Possession with the owner's permission can never
lead to a transfer of title. However, 'hostile' does
not require any confrontation between the
adverse possessor and the true owner.
When Jasper built his fence, neither he nor Alice
realized that the fence was encroaching on Alice's
land. Therefore, her permission was not obtained.
The building of the fence amounted to hostile
possession by Jasper.
Possession under color of title is considered
hostile. An adverse possessor has color of title if
she mistakenly believes that the property belongs
to her, because a defective deed or other
document says that it's hers.
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Adverse Possession
Continuous and uninterrupted
» The adverse possessor must have
continuous and uninterruptedpossession
for 5 years (California law)
» Tacking: Successive adverse possessors can
add together their periods of possession to
satisfy the time/ statutory period.
Adverse Possession
Payment of taxes
» In addition to continuous and uninterrupted
possession for 5 years, California law also
requires the adverse possessor to pay
taxes on the property during that period.
Involuntary Alienation
External causes
» Accession:The legal name for the process
when real property is involuntarily transferred
from one owner to another by natural forces.
» Accession includes:
— accretion
— reliction
— avulsion
"Tacking" example: Suppose Jasper built the
fence in 1996. In 2000, Jasper sold his
property to Gloria. In 2003, Alice lists her
property for sale. A survey requested by a
prospective buyer reveals that the fence is
fifteen feet over the actual boundary. Alice asks
Gloria to remove the fence. Gloria consults an
attorney. The attorney tells her she doesn't have
to remove the fence. The requirements for
adverse possession have been met, and the
strip of land now belongs to Gloria. Although
Gloria has owned the property for only 3 years,
her period of adverse possession can be tacked
onto Jasper's 4 years to meet the 5-year
requirement.
When all the requirements for adverse
possession are fulfilled, title passes from the
original owner to the adverse possessor
automatically. In some cases, neither party even
realizes that this has happened. eg: 5 years
after Jasper built the fence, the owner of
Jasper's property would become the owner of
the disputed strip of land.
Because there is no documented evidence that
the title has changed hands, for the adverse
possessor's title to become marketable he must
"perfect" it, either by recording a quitclaim deed
from the former owner or by filing a quiet title
suit.
eg: Alice might refuse to give Gloria a quitclaim
deed. Then Gloria would have to file a quiet
title action and prove to the court that she had
met the requirements for adverse possession.
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Involuntary Alienation
Accession
» Accretion: When riparian or littoral land is
enlarged by waterborne soil (river deposits)
owner gets title to added soil.
» Reliction: When a body of water gradually
retreats, the newly exposed soil belongs to
the landowner.
» Avulsion: When land is torn away by
flowing water, or when land is exposed by a
sudden change of watercourse.
Land beside a body of water is increased by
"accretion" when waterborn silt is depostited on
the shore. Deposits = "alluvion" or "alluvium".
Accretion occurs very gradually, build-up of
alluvion is hard to perceive. When land area is
added to by "accretion", the landowner
acquires title to the newly depostied soil.
Land beside a body of water is increased by
"reliction"(very gradual process) when water
recedes slowly and exposes land that's been
underwater. The adjoining landowner acquires
title to the newly exposed land.

"Avulsion" occurs when land is violently torn

away by flowng water. If possible, owner may
Summary reclaim the land within a reasonable period. If
Involuntary Alienation isn't reclaimed, it becomes part of property
» Dedication
where it ended up. "Avulsion" can refer to a
» Intestate succession
sudden change in a watercourse, oftern as the
result of a storm and flooding. This usually
» Condemnation
does not result in a transfer of title.
» Quiet title
» Partition
» Foreclosure
» Adverse possession

Recording a document means having it placed

The Recording System
» Recording: Filing a document at the county
recorder’s/cleck office, in county where
property is located, so information is available
to the public.
» Whenever interest in real property is
transferred, new owner should record deed
or other transfer document.
in the public record, so that the information set
forth in the document is available to the general
public.
State law prescribes the procedures that the
county clerk must use in recording documents.
When a document is filed for recording, the
date and time of filing are noted, and the
document is assigned a recording number. This
establishes the document's priority, in case there
are competing claims. After the document has
been scanned or microfilmed, the original will
be returned to the appropriate party.

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 The Recording System
Procedures
» Documents recorded in chronological order,
based on order received.
» Documents filed by grantor index and
grantee index (by last names alphabetically),
and sometimes by property description.
» Computerization has made indexing less
important; in most cases search functions can
locate documents in public record.
The Recording System
Title search
» Title search: An examination of the public
record to determine al rights, claims, and
interests affecting title to a property.
— Before a property is sold a search is done
to verify seller’s title and identify claims.
— Tracing the chain of title back to previous
owners helps establish the seller's title.
The Recording System
Legal effects
» Documents transferring title, establishing
interest in property, or creating or removing
encumbrances should be recorded.
A lis pendens - a document which states that
a pending lawsuit may affect title to a property.
A commom document not recorded: the residential
purchase agreement (a sales contract).
These grantor and grantee indexes were used
for "title searches" - to find out who holds what
interest in a particular piece of property. This is
most commonly done when the property is
about to be sold.
Someone performing a title search can look up
the seller's name in the grantor index, to make
sure the seller hasn't already conveyed the
property to someone else. Next, by looking up
the seller's name in the grantee index, the title
searcher can find the deed or other document
by which the seller acquired title. Then she can
look up the grantor named on the seller's deed
to find the previous deed, and so on. Tracing
the chain of title back through several owners
establishes the validity of the seller's title. A
person performing a title search will usually
search all public records, not just those
available at the county recorder's office. The
person will typically also search the records at
the Federal Land Office and the county clerk's
office. Most buyers don't carry out their own
title search. Instead, they rely on a search
conducted by a title insurance company.
Documents recorded included:
-a deed
-a mortgage
-a deed of trust
-a land contract
-an option to purchase
-a long-term lease, or
-a lis pendens.
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 The Recording System The primary purpose of recording a deed is to
Legal effects provide public notice of the grantee's interest in
the property. Notice is an important legal
» Having a document recorded has two concept. Legal rights and liabilities often
important legal effects: depend on whether a party had notice of a
—Provides notice of the interest particular fact at a given time.
conveyed
—Establishes priority for that interest

The Recording System

Notice
» Actual notice: A person has actual notice of a
fact if she knows it, e.g. observed it, read
about it, or was told.

» Constructive notice: A person has

constructive notice of a fact if she should
(reasonably) know it, even if she does not.

He could have found out about it if he had

The Recording System
Constructive notice
»Recording a document concerning real property
provides constructive notice to the general
public of the interest set forth in the document
(Any member of the general public may
inspect the records of the county recorder.)
» Anyone who later acquires an interest in
property is considered to have constructive
notice of an earlier recorded document (even
if he didn't have actual notice.)
consulted the public record.
The constructive notice provided by recording a
deed protects the grantee. It establishes the
priority of the grantee's claim to the property
over the potential claims of others.For instance,
suppose a grantor deeded the same piece of
property to two different people. As a general
rule, the person who recorded his or her deed
first would have good title.
Bob Baker's deed(recorded earlier Jan30)
would have priority over Mark Matthews' deed
(Feb 5).

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 Like recording, "possession of property"
provides notice of an interest in the property or
Summary a claim against it. For example, suppose a
The Recording System
grantee's deed isn't recorded, but the grantee
takes possession of the property. A subsequent
» Recording procedures purchaser couldn't claim that she had no notice
» Title search of the grantee's interest, because the grantee's
» Actual notice possession provided notice. If the purchaser
» Constructive notice had visited the property, she would have found
» Legal effects out about the grantee's claim.

Title Insurance 土地房產所有權保險賠償金

Title Insurance
» Title insurance: Insurance that protects
against losses caused by title defects.
— If someone makes a claim against title,
title company defends policyholder’s
position and reimburses them for any
loss.
An investigation of the seller's title is an
essential step in a real estate transaction. A title
company not only investigates the chain of title,
it offers the buyer the additional protection of
title insurance. Without title insurance, the most
protection a home buyer could receive would
be to obtain a copy of "the chain of title" (a
complete history of all the recorded interests in
a property) or "an abstract of title" (a
condensed history of those interests), and to
have the history examined by an attorney who
could render an opinion on the condition of the
title. In CA, use of an abstract of title has been
almost entirely replaced by use of title
insurance.

A title insurance policy is a contract between a

Title Insurance title insurance company and a policyholder.

» A title policy issued to a property buyer is
called an owner’s policy.
» A title policy protecting a lender’s security
interest in the property is called a
mortgagee’s policy.
The policyholder is ordinarily either a property
buyer or a lender providing financing for a
transaction.
In the policy, the title insurance company agrees
to reimburse the policyholder for financial losses
resulting from title defects covered by the policy.

And if someone makes an adverse claim

against the title, the title company will handle
the legal defense against the claim.

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Title Insurance
Obtaining a policy
» Steps in process for obtaining policy:
— Title company performs title search
— Company issues title report.
— Any defects and encumbrances found are
listed in report and excluded from coverage
when policy issued.
The first step in obtaining title insurance for a
transaction is the title search. The buyer or seller
pays a fee to the title company to cover the cost
of the search. Most companies have their own
title plant, a copy of the public record that is
constantly updated. Based on the title search,
the company issues a title report for the
property. All defects and encumbrances found
in the public record are listed in the report.
These will be excluded from coverage when the
policy is issued.

Title Insurance
Obtaining a policy
If the title report reveals unexpected problems, the buyer or lender may require the seller to clear
them up before the transaction proceeds.

When the condition of the title is satisfactory to the buyer or lender the title company issues the
insurance policy.

A title insurance policy lasts as long as the policyholder has a legal interest in property.

A single premium covers the entire life of the policy.

The coverage of the title insurance policy is

Title Insurance limited to the condition of the title as of the date
Types of coverage of the policy.

» Traditionally, title insurers have offered two Encumbrances or title defects that arise later will
main types of coverage: not be covered.
—standard
—extended

» In recent years they have been joined by a

third type:
—homeowner’s

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 Title Insurance
Standard coverage
» Standard coverage: The standard coverage
policy, also known as a CLTA (California
Land Title Association) policy, protects
against latent defects (e.g. forged deeds) and
undiscovered recorded encumbrances.
» It doesn’t protect against problems that would
only be discovered by a property inspection or
survey of the property, such as adverse
possession or an encroachment. .
Title Insurance
Extended coverage
» Extended coverage: An extended coverage
policy, also known as an ALTA (American
Land Title Association) policy, covers the
same things as a standard coverage policy,
plus problems that should be discovered
through inspection of the property.
» A mortgagee's policy is nearly always an
extended coverage policy.
Title Insurance
Homeowner’s coverage
» Homeowner’s coverage: Homeowner’s
coverage is broad, but only available for
residential property up to four units. It
includes everything in standard coverage
and most of the things in extended
coverage, e.g. encroachments.
» Homeowner’s coverage also protects
extra matters such as violations of restrictive
covenants.
A standard coverage title insurance policy
insures against losses resulting from any
encumbrances of record that the title searcher
overlooked and failed to include in the title
report. It also insures against hidden problems
such as forged signatures, fraud, incompetent
grantors, and improperly delivered deeds.
These defects usually can't be discovered by
examining the public record, but the title
company takes on the risk that this type of
problem may exist.
Before issuing an extended coverage policy,
the title company sends an inspector to the
property to look for encroachments and other
potential problems. Whenever a buyer finances
a real estate purchase with an institutional
loan, the lender will request an extended
coverage policy to protect its interest, especially
its lien priority. In other words, a mortgagee's
policy is nearly always an extended coverage
policy.
In most residential transactions, the owner's title
insurance policy is a homeowner's coverage
policy.
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It's important to note that certain types of
problems are not covered by any type of
coverage.

Title Insurance
Government action
» Title insurance policies do not insure against
losses due to government action, such as
condemnation or zoning changes.

Summary
Title Insurance
» Owner's policy
» Mortgagee's policy
» Title report
» Standard coverage
» Extended coverage
» Homeowner’s coverage

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