Unit 5

Abstract of title

The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate.

Action to quiet title

A lawsuit brought in a court in order to establish a party's title to real property and to "quiet" any challenges or claims to the title.

Adverse possession

The open, continuous, exclusive, adverse, notorious, (OCEAN) possession of another's land under a claim of title. Possession for a statutory period of 20 years in North Carolina may be a means of acquiring title.

Alienation

The act of transferring property to another. Alienation may be voluntary, such as by gift or sale, or involuntary, as through eminent domain or adverse possession.

American Land Title Association (ALTA)

A title insurance policy that protects the interest in a collateral property of a mortgage lender who originates a new real estate loan.

Bargain and sale deed

A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed at his or her discretion.

Chain of title

The succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title.

Cloud on the title

Any document, claim, unreleased lien, or encumbrance that may impair the title to real property or make the title doubtful; usually revealed by a title search and removed by either a quitclaim deed or suit to quiet title.

Condemnation

A judicial or administrative proceeding to exercise the power of eminent domain, through which a government agency takes private property for public use and compensates the owner.

Connor Act

A North Carolina law that requires many types of real estate documents to be recorded for protection against claims from third parties. These documents include deeds, mortgages, purchase contracts, installment land contracts, assignments, options, leases exceeding three years, easements, and restrictive covenants; a pure race statute.

Constructive notice

The notice given to the world by recorded documents. All people are charged with the knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property is also considered ( ) that the person in possession has an interest in the property.

Covenant

A written agreement between two or more parties in which a party or parties pledge to perform or not perform specified acts with regard to property; usually found in such real estate documents as deeds, mortgages, leases, and contracts for deed.

Deed

A written instrument that, when executed and delivered, conveys title to or an interest in real estate.

Delivery and acceptance

The actual delivery of a deed by a grantor and the actual or implied acceptance of the deed by the grantee; recordation of the deed is viewed as acceptance.

Eminent domain

The right of a government or municipal quasi-public body to acquire property for public use through a court action called condemnation, in which the court decides that the use is a public use and determines the compensation to be paid to the owner.

Escheat

The reversion of property to the state, as provided by state law, in cases where a decedent dies intestate without heirs capable of inheriting, or when the property is abandoned.

Excise tax

Deed transfer tax paid by the seller and required to be noted on a deed by state law; the rate is $1 per $500 of sales price.

General warranty deed

A deed in which the grantor good clear title to the premises through four covenants in the deed. Used in most real estate deed transfers, as it offers the greatest protection to the grantee of any deed.

Grantee

A person who receives a conveyance of real property from a grantor.

Granting clause

Words in a deed of conveyance that state the grantor's intention to convey the property at the present time. This clause is generally worded as convey and warrant, grant, bargain, and sell, or the like.

Grantor

(1) The property owner that is transferring title to or an interest in real property to a grantee. (2) A borrower in a deed of trust loan transaction; also called trustor.

Intestate

The condition of a property owner who dies without leaving a valid will. Title to the property will pass to the decedent's heirs as provided in the state law of descent.

Marketable title

A good or clear title, reasonably free from the risk of litigation over possible defects.

Marketable Title Act

The act is designed to eliminate obsolete defects in a chain of title. If a chain of title can be traced back for 30 years without a problem, it becomes a marketable title.

North Carolina Intestate Succession Act

The state law of descent that dictates distribution of the real and personal property of the deceased that died without a will (intestate).

Quitclaim deed

A conveyance by which the grantor transfers interest in the real estate, if any, without warranties or obligations; frequently used to remove clouds on the title.

Recording

The act of entering documents into the public record at the recorder's office established in each county. Unit this is done, a deed or mortgage ordinarily is not effective against third parties, such as subsequent purchasers or mortgages.

Special warranty deed

A deed in which the grantor only warrants, or guarantees, the title against defects arising during the period of the grantor's tenure and ownership of the property and not against defects existing before that time, generally using the language by, through, or under the grantor but not otherwise.

Title

(1) The right to ownership or the ownership of land. (2) The evidence of ownership of land.

Title insurance

A policy insuring the owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects, and matters specifically excluded by the policy.

Title search

The search of public records to determine the current state of ownership of real estate; examining chain of title.

Will

A written document, properly witnessed, providing for the transfer of title to property owned by the deceased.