How are real estate transactions conveyed (Deeds and Forms of Title)?

Conveyancing, as the name implies, is the act of transferring property to a new owner.  The attorney involved in conveyancing is the person who takes the desires of the buyer and seller and translates them into legal reality by drafting and recording appropriate deeds or similar instruments.  To do so, the attorney will determine such issues as what form of document is appropriate for the transaction, who must sign, how the new owners will hold title, exactly what interests in the property will be conveyed, and more.

 

Deeds:  A deed is the document that transfers ownership of real estate. It will identify the buyer (grantee) and seller (grantor), provide a legal description of the property, and be signed by the person transferring the property.  The seller's signature must be notarized. There are two types of deeds commonly used in real estate transactions.

 

The most common form of deed is a warranty deed (sometimes called a "grant deed").  A warranty deed transfers ownership and also explicitly promises (warrants) that the grantor/seller holds good title to the property.  The other common form of deed is the quitclaim deed.  A quitclaim transfers any ownership interest the grantor/seller has in the property, but makes no promises or guarantees about what that interest is or that title is good.  Put another way, a warranty deed says "I promise that I own the property I am giving you and the title to it is good," while a quitclaim deed says "I'm giving you whatever interest I have in this property, but I'm not making any promises about it my title might not be good and I might not even own the property but whatever I have is now yours."  Quitclaim deeds are most commonly used to clear up title problems, to transfer property between spouses after a divorce, or in informal transactions between friends or family members

 

Forms of Title - Joint Tenancy and Tenancy in Common: Where two or more people are purchasing property together, the real estate lawyer must also determine how they will take title, commonly asking whether they wish to hold the property as joint tenants or as tenants in common.  This decision makes no difference in most of the rights and duties of the co-owners, but makes a great difference on how the land is treated upon the death of a co-owner. (Note: the word "tenant" in the terms "joint tenant" or "tenant in common" is an old English law term that in this context merely means "owner.")

 

A joint tenancy involves the right of survivorship. This means that when one joint tenant dies, that owner's share passes automatically to the surviving joint tenants.  This happens whether or not the deceased owner had a will; in fact, it happens even if the deceased owner's will attempts to leave his interest in the land to someone else.  The joint tenancy is a popular form of co-ownership between husband and wife, because there is no need for a will or probate of the joint tenancy land, which can save significant time and expense.  A small number of states also recognize a "tenancy by the entirety," which is a form of joint tenancy (with the right of survivorship) that can only be created between husband and wife.

 

By contrast, tenancy in common is a form of shared ownership where two or more persons own land without the right of survivorship. Thus, when a tenant in common dies, the interest of the deceased owner passes to his or her heirs or the persons named in his or her will.

 

Title and Boundary Line Disputes:

Title and boundary disputes are disagreements about who owns a piece of property and the amount of area the property covers. Title and boundary disputes are becoming less common because better records are kept and property lines are more clearly defined. However, title and boundary disputes still arise between property owners, especially when title and boundary lines were recorded a long time ago. 

 

Figuring out where your property begins and ends can be difficult, but most people use the following:

 

• Deed

• Property survey

• County Recorder’s Office

• Assessor’s Office

 

The property description in your deed includes the boundary lines of your property. Deeds to property are recorded at the county or city recorder's office. The recorder's office should have information on all the prior owners of your land and where the boundaries used to lie.

 

What are the most common forms of commercial leases?

Commercial leases typically break down into several major categories, with a few variations depending on property type and individual properties. They each revolve around the base rental rate and how the properties operating expenses are passed down to each tenant in the building.

 

Full Service: Typically means the asking rental rate of the property includes all operating expenses the property owes such as janitorial services, property maintenance, utilities, and property taxes. This is the simplest and most undisguised form of a commercial lease and is most common in multi-tenant office properties catering to smaller tenancy (1-15 person businesses). While a full service lease has the vast majority of additional operating expenses already baked into the monthly rent, the language within the lease typically states that the landlord has the right to pass down to the tenants any future increases in those expenses on a pro rata basis. So, for example during the summer months when a building will typically push out more air conditioning, the property’s A/C expense will likely be over what they estimate (based on previous year’s) and the tenants will receive a bill.

 

Triple Net Lease: Refers to properties whose asking rental rate is not inclusive of the additional operating expenses tenants can expect to incur renting space. Net leases are very common in retail properties or free standing properties, but are also beginning to become prevalent in traditional multi-tenant office properties as well. The “net” operating expenses categories are utilities, maintenance, property taxes, insurance and sometimes management. Landlords typically bill their tenants each month for these extra expenses in addition to the rent.

 

Modified Gross: Sometimes referred to as “Industrial Gross”, this type of lease is most common with industrial or warehouse space. In most cases, tenants of industrial properties will have a full service lease that’s been modified so that some of the expense categories (usually electrical) will be charged in addition to monthly rent. All other property expenses are already included in the regular monthly rent.

 

Percentage Lease: The tenant is responsible for paying base rent on the property, as well as a monthly % of revenue earned from the business occupying the rented space. They are most often used in retail spaces and specifically malls.

 

What are the most common forms of residential leases?

 

A residential lease is a legal agreement between a landlord and a tenant that extends to the tenant an exclusive right to use and enjoy a property as his primary residence. In the U.S., there are three common types of residential lease agreements into which the parties may enter, depending on their specific needs: a fixed-term lease, a periodic lease and a holdover lease. It is worth nothing that landlord/tenancy laws can vary significantly from state to state, and so your state’s specific guidelines for residential leases may differ from the information provided.

 

Fixed-Term Lease: A fixed-term lease is the most common type of residential lease available. Fixed-term leases are so called because the length of the tenant’s stay is for a specified period of time, with a defined move-in and expiry date. While many fixed-term residential leases typically last for one or two years, fixed-term leases can last for as little as three months or as long as 10 years, depending on the tenant’s and the landlord’s needs. A landlord can also draft a fixed-term lease to coincide with certain events instead of following a specified timeline. For example, a fixed-term lease can begin upon the tenant’s enrollment in college and expire upon the tenant’s graduation. Fixed-term leases automatically terminate on the end date or event, at which time either the parties renew the agreement or the tenant moves out. Neither the landlord nor the tenant can terminate the lease agreement early unless one party has a valid claim for breaching it. Otherwise, the landlord must permit the tenant to continue living in the unit and the tenant must continue paying rent for the unit until the day the lease expires.

 

Periodic Lease: A periodic lease, also called a month-to-month lease, is residential lease that operates on a 30-day period. The tenant is only guaranteed the unit and the landlord is only guaranteed to have a tenant in that unit for the current month. Periodic leases are common in short-term situations, like summer vacation rentals or college apartments, where the tenant may only be in the area for a brief period of time. Rental payments, rights and responsibilities are the same as they would otherwise be for a fixed-term lease, except both parties may terminate the lease at any time with at least 30 days’ notice. Neither party needs a reason for ending the agreement, although terminations for discriminatory are illegal.

 

Holdover Lease: A holdover lease, also called a tenancy at sufferance, is a residential lease agreement that arises from the expiration of a previous fixed-term lease. Holdover leases are not written or verbal arrangements; instead, the arrangement is created when the tenant remains living in the unit, and the landlord takes no steps to remove him. It is therefore understood, even if neither party discusses the arrangement. Even though the lease has expired, the terms of the lease (except the length of the fixed terms) still apply for as long as the tenant remains in the unit. However, the landlord can eject the tenant from the unit at any time after the original lease expires without providing prior notice. Depending on the particular state, the tenant may have 24 to 48 hours to move immediately once evicted from the unit.

 

Landlord & Tenant Agreements - Before You Agree To Rent:

Before you decide on a rental unit, there are several other points to consider. For example: Is an oral rental agreement legally binding? What are the differences between a lease and a rental agreement? What are some of the advantages and disadvantages of each? This

 

Before you can rent a rental unit, you and the landlord must enter into one of two kinds of agreements: a periodic rental agreement or a lease. The periodic rental agreement or lease creates the tenant's right to live in the rental unit. The tenant's right to use and possess the landlord's rental unit is called a tenancy.

 

A periodic rental agreement states the length of time (the number of days) between the rent payments - for example a week (seven days) or a month (30 days). The length of time between rent payments is called the rental period.

 

A periodic rental agreement that requires one rent payment each month is a month-to-month rental agreement, and the tenancy is a month-to-month tenancy.51 The month-to-month rental agreement is by far the most common kind of rental agreement, although longer (or shorter) rental periods can be specified.

 

If the periodic rental agreement requires that rent be paid once a week, it is a week-to-week rental agreement and the tenancy is a week-to-week tenancy.

 

In effect, a periodic rental agreement expires at the end of each period for which the tenant has paid rent, and is renewed by the next rent payment. A periodic rental agreement does not state the total number of weeks or months that the agreement will be in effect. The tenant can continue to live in the rental unit as long as the tenant continues to pay rent, and as long as the landlord does not ask the tenant to leave.

 

In a periodic rental agreement, the length of time between the rent payments (the rental period) determines three things:

• How often the tenant must pay rent;

• The amount of advance notice that the tenant must give the landlord, and that the landlord must give the tenant, if either decides to terminate (end) the tenancy; and

• The amount of advance notice the landlord must give the tenant if the landlord decides to change the terms of the rental agreement other than the rent.

 

Oil & Mineral Rights and Land Ownership:

 

Minerals rights in an oil and gas lease differ from surface rights. A landowner may own the surface land but not the mineral rights of that land. The owner of the land should check on whether he/she has ownership of mineral rights or title on the land.

 

One of the places to check on real ownership is through an independent landman or a bank. The landowner can also use anabstract company. Whoever is the one contacted to perform a mineral title is then empowered to obtain an ownership report or mineral takeoff.

 

The owner of the land, in order to legally negotiate with an oil and gas production company, has to know whether they have clear title to the mineral rights of that land. In many cases, the mineral rights are separated from the surface rights.

 

After the landowner has received a report of the land's mineral rights and who holds those rights, then the owner can discuss and negotiate in good faith with any oil and gas production company.

 

Only the mineral right owner may execute an oil or gas lease conveying his interest to the production company.

 

Surface rights and ownership of land is when the mineral rights have been detached. The surface rights owner can have the full use of the land; however, surface possession is subject to the mineral rights owner's right of extracting the minerals.