Chapter 2

The act of transferring or conveying ownership of real estate from one person to another is known as alienation. Ownership of real property may be transferred voluntarily, involuntarily, by will, through inheritance (succession) and be accession.

VOLUNTARY TRANSFER OF PROPERTY

Most transfers of property are voluntary. Voluntary transfer means the intentional sale or gift of real estate from a grantor to a  grantee by a deed. This can be done by public grant, private grant or public dedication. A public grant, or patent, transfers title to land from the  government to a private person. A private grant transfers title from a private person to another private person or to  the government.

PUBLIC DEDICATION

Public dedication is a voluntary gift of land to  the public. For example, a developer divides a large tract of land into streets and house lots. The lots are sold to private owners, but the streets are dedicated to the city or town. The lot buyers will benefit by not having to pay taxes  on the streets and by having them maintained at public expense. If the developer deeds the streets to the municipality, the transaction is  called dedication by deed. If the developer records a government approved plan showing the streets, the transaction is referred to as statutory dedication.

INVOLUNTARY TRANSFER OF REAL PROPERTY

Property may be transferred involuntarily through eminent domain, court action, and adverse possession. Each method is discussed below. 

EMINENT DOMAIN 

Eminent domain is the government's power, by condemnation proceeding, to take property from a private owner if the government shows that the land is needed for public use or for the public's general welfare. Although the private owner must be justly compensated, the transfer is involuntary since it is done against the owner's will. 

COURT ACTION 

Property may be transferred by decisions and actions of the courts in the following situations: 1: Bankruptcy, 2: Partition, 3: Foreclosure, 4: Execution sale and 5: Escheat.

1.  Bankruptcy. In Federal bankruptcy proceedings, the court may order real estate sold to satisfy the creditors of the bankrupt party.

2. Partition. When co-owners of a property being sold disagree as to how the property is to be divided, one or both may file a court action of partition to settle the dispute. The court sells the property and distributes the proceeds among the owners according to their respective interests.

3. Foreclosure. Foreclosure is a procedure for selling the debtor's property to pay off a defaulted mortgage or an unpaid lien. Although the right to foreclosure is not dependent upon court action, most states require court approval for the protection of the rights of the debtor.

4. Execution Sale. An execution or sheriff's sale may be ordered by the court to pay off a judgement against the property owner.

5. Escheat. When a person dies without a will or heirs, his or her property will escheat, I.e. revert back, to the state after appropriate court proceedings. Since property cannot remain ownerless, the state assumes ownership.

ADVERSE POSSESSION 

Adverse possession is the prescriptive right to acquire title to another's land by the use of the land for a prescribed period of time ( 20 years in Massachusetts ). The possession of the claimant must be open, notorious, continuous ( uninterrupted for the number of years set by law ), hostile, and adverse to the true owners interest. It is not necessary for the owner to have actual knowledge if a court finds that possession was open and visible, and that the true owner should have known about the adverse use and failed to prevent it. 

The manner and extent to which the claimant uses the land must clearly indicate a claim of ownership. Courts have held that the payment of real estate taxes and cultivation of the land, or claim of ownership under a "color of title" ( defined later in the chapter ) are sufficient to establish ownership by adverse possession if possession is continued for the required time period. Title by adverse possession may not be acquired against government property or against property registered under the Torrens system.

Tacking. The combining of successive periods of possession in order to establish ownership by adverse possession is known as tacking. For example, Mr. Allen lives on the land for twelve years and deeds his interest to Mr. Baker who lives there for fourteen years. Mr. Baker can assert title by adverse possession even though he did not possess it for the full 20 years. 

VOLUNTARY TRANSFER BY WILL

 A will is a written instrument, which disposes of the real and personal property left by a deceased. The person who makes a will is known as the testator. A will may be changed or modified by a codicil. A gift of real estate by will is known as a bequeath or devise. A gift of personal property is called a bequest or legacy. The person appointed by the will to carry out the directions and intent of the testator is known as the executor. The executor, after probate court approval, is required to gather the assets of the estate, pay the debts of the deceased, and distribute the remaining assets in accordance with the instructions in the will. Real property in the estate may be sold only with court approval and assent of the beneficiaries of the will.

REQUIREMENTS FOR A VALID WILL.                                                               

Any adult of sound mind may execute a will. In order to be valid, a will must be executed in strict compliance with law. Most states require wills to be signed by the testator and at least two witnesses who must all sign in each other's presence. All signatures must be notarized. A codicil must be signed under the same conditions as a will. A holographic will is one that is written, dated and signed in the testator's handwriting, but not witnessed. A holographic will may be allowed in the absence of a properly executed will. A nuncupative will is made orally without the execution of a written instrument by the testator. Nuncupative wills are generally not recognized except when made by soldiers  in active service or mariners at sea.

TRANSFER OF PROPERTY BY INHERITANCE (SUCCESSION)

A person who dies without a will is said to be intestate, and his or her property will be distributed to the deceased's heirs according to  the state law of descent and distribution. Any interested person may petition the Probate Court to appoint an administrator to settle the estate. The administrator gathers the assets, pays the debts, and distributes the balance of the estate to the heirs according to statute.

Accession is the acquisition of title to land or improvements as a result of natural or artificial causes. Transfer of property by accession from one owner to another is completed without the involvement of a deed. It results from the annexation of fixtures or from the deposit of soil along the banks of a stream as the result of accretion.

Annexation or affixation is an artificial means of acquiring title to fixtures or improvements, which have become permanently affixed to the land by the owner or another person. For example, if a tenant installs light fixtures in a rented apartment, the fixtures will become the property of the landlord unless there is an agreement permitting them to be removed by the tenant.

Accretion is the gradual and imperceptible process of the addition of soil and rocks resulting from the natural action of water, such as the change in a shoreline of a river. The soil deposited is known as alluvion and belongs to the person who owns the land upon which it has been deposited. If water recedes, new land is acquired by reliction. Likewise, an owner may lose land through erosion, the gradual an imperceptible wearing away of the land caused by flowing water or other natural forces. The sudden removal of soil from the land of one  and its deposit to the land of another by the perceptible action of water is known as avulsion. The resulting deposit belongs to the original owner provided it can be identified and removed within a reasonable time.

VOLUNTARY TRANSFER OF PROPERTY BY DEED

A deed is a written instrument by which the owner, as grantor, voluntarily conveys to a grantee an ownership or interest in real estate. A deed is evidence of title. Although a deed may be drawn by anyone, an attorney usually prepares it. The duties of real estate brokers and salespersons do not include the preparation of deeds for their clients.

DEED COVENANTS

The degree to which the grantor warrants a clear title depends upon the covenants (promises) contained in the deed. These covenants are as follows:

1. Covenant of Seizin. The grantor guarantees that he or she is the owner of the property, and has a right to sell it and convey title.

2. Covenant Against Encumbrances. The  grantor warrants that there are no defects in  or claims against the title other than those  agreed to by the grantee and specifically set forth in the deed.

3. Covenant of Quiet Enjoyment. The grantor warrants that title is conveyed free of interference from the acts or claims of third persons.

4. Covenant of Warranty of Title. The grantor promises to pay for the cost of defending the grantee's title in actions by persons asserting rightful claims to the property.

5. Covenant of Further Assurance. The grantor warrants that he or she will perform any act necessary to perfect the title for the grantee. For example, a grantor would be required to execute and deliver a new deed in order to correct an error in a preceding one.    

TYPES OF DEEDS

Listed in order of their degree of warranty of title are the following commonly used deeds: 1. General Warranty, 2. Special Warranty, 3. Bargain and Sale, 4. Quitclaim and 5. Statutory.

1. General Warranty. A general warranty deed contains all five-warranty covenant's thus providing the grantee the greatest protection and assurance against defects in title than with any other deed. In a general warranty deed the warranty protection includes those claims against the title that applied to the period during and before the time the grantor actually owned the property, while a special warranty deed would include only those claims applying to the  period the grantor actually held the property.

2. Special Warranty or Limited Warranty Deed. A Special Warranty Deed is similar to a general warranty deed, except that the grantor's liability to defend the title is limited to claims originating only through the grantor and not to those, which occurred prior to the grantor's tenure of ownership. Thus, the grantor would not be responsible for a lien, which was recorded prior to the grantor's taking title.

3. Bargain and Sale Deed. A Bargain and Sale Deed conveys all of the grantor's interest in the property, but contains no expressed or implied warranties as to title. It does imply that the grantor has possession of, or a claim or interest in the property conveyed. Bargain and Sale Deeds are used by trustees, fiduciaries, executors, and court officers.

A variation of the Bargain and Sale Deed is the "Bargain and Sale Deed with Covenant." The  covenant changes the Bargain and Sale Deed into a Special Warranty Deed with the grantor warranting only that he or she has done nothing to encumber the property during his or her term of ownership. In some states, this is referred to as a "Grant Deed."

4. Quitclaim Deed. A quitclaim deed conveys only the interest or right the grantor has at the time of performance. It contains no warranties, either expressed or implied, of possession or title. It is usually used to release or convey minor interests in real estate for the purpose of clearing title defects or clouds on title. It provides the grantee with the least protection of any deed.  Note:  A "quitclaim deed" is commonly used to cure a cloud on a title.

5. Massachusetts Statutory Quitclaim Deed. By statute in Massachusetts, the words "Quitclaim Covenants" in a deed are defined as having the same meaning and effect as special or limited warranty covenants. Thus, a Massachusetts Statutory Quitclaim Deed is the same as a Special Warranty Deed or Grant Deed in other areas of the country.

SPECIAL PURPOSE DEEDS

Special purpose deeds are used to convey an interest in real estate in certain situations. The most common forms of special purpose deeds are:

1. Sheriff's Deed. A sheriff's deed is given by court order to satisfy a judgment.

2. Fiduciary's Deed. A fiduciary's deed is used by executors, administrators, guardians, and conservators when executing a court ordered or approved conveyance.

3. Timber Deed. The conveyance of growing timber requires a deed, since it is an interest in land. Once cut, the timber becomes personal property and is transferred by a contract or bill of sale.

4. Crops and Farm Produce. Annual crops such as corn and potatoes, are known as emblements, and are conveyed by bill of sale. Perennials, such as shrubs or hay, require a deed for transfer of title.

ESSENTIAL ELEMENTS OF A VALID CONVEYANCE BY DEED

A valid conveyance by deed is one, which will transfer title from grantor (seller, vendor), to grantee (buyer, vendee) and is legally enforceable as between these two parties. To be valid, the conveyance must meet the following legal requirements: 

1. Written Instrument. A deed must be in writing and contain the proper language in order to be valid. A new deed is delivered each time the title is conveyed.

2. Legally Competent Grantor.  The grantor must be legally competent, i.e. of lawful age and mentally able to convey title. The Legal age  (majority) in most jurisdictions is eighteen. Although a minor may own property, a court-appointed guardian can only convey title. A deed signed by a minor is voidable and may be rescinded by the minor. A deed of a mental incompetent or of one incapable of understanding one's actions is voidable and may be rescinded. A court-appointed conservator, acting with court approval, may sign and deliver a valid deed of the incompetent's title. A deed signed by an incompetent while under conservatorship is void.

3. Grantee. The grantee is the person who receives title. The grantee must be clearly identifiable and alive at the time of delivery of the deed. A deed  executed in blank with oral authority to fill in the blank is void.

4. Consideration. The deed must contain a recital of consideration (something of value) being received by the grantor.  Consideration may be money, personal property, love and affection, or any nominal sum. Massachusetts requires that the actual purchase price be disclosed in the deed in order for it to be acceptable for recording by the  registry of  deeds. When title is conveyed as a gift or for consideration of less than $100, the words "for  love and affection" or "for a nominal sum" are acceptable for recording.

5. Granting Clause. The deed must clearly indicate the intent of the grantor to convey title. In most states the words "grant to" are sufficient.

6. Habendum Clause. The habendum clause usually begins with the words, "to have and to hold," and  is used when necessary to define the type of estate being conveyed. A fee simple estate is conveyed unless words to the contrary are contained in the habendum clause.

7. Legal Description of the Property. A legal description is defined as one, which a competent surveyor can use to locate the parcel. The property must be clearly described either by metes and bounds, plot plan, plat, sub-division, or government survey. A lot number or street address alone is generally not acceptable on a deed. A condominium may be described by use of the unit number and post office address.

8. Signature. Only the grantor signs the deed. The grantee's signature is not required unless the grantee agrees to abide by restrictive covenants in the deed. A deed will not be void for lack of a date since the conveyance is completed at the time of delivery of the deed. A person acting under a notarized power of attorney may sign a deed on behalf of the grantor.

9. Notarization. Notarization is the acknowledgement or attestation of the grantor's  signature by a notary public or other public official. The purpose provides assurance that the deed was  signed freely, without coercion or duress. In most  states, including Massachusetts, notarization is not required for the validity of a deed. However, a deed is not acceptable for public recording unless the signature is notarized.

10. Delivered and Acceptance. Title passes when the deed is delivered by the grantor and accepted by the grantee. There must be an actual delivery of the deed by the grantor or the grantor's agent, and either an actual or implied acceptance by the grantee or the grantee's agent. Although recording is not required for transfer of title, acceptance is presumed when the grantee or agent for recording presents the deed. However, this presumption may be rebutted as in the case where a grantor signed and recorded a deed without the named grantee's knowledge or consent.

A deed may be signed and delivered on behalf of the grantor by a person acting under a notarized power of attorney. Note: The "power of attorney" authorizes one person to act for another. Because a power of attorney terminates upon the death of the principal, the grantee would require proof that the grantor is alive at the time of the conveyance.

Sometimes a deed is executed and delivered to a third person to be held in escrow and delivered to the grantee at a future date. This is referred to as a delivery of a deed in escrow, and title becomes effective only upon the second delivery. However, if the grantor dies or becomes otherwise incapable of executing a deed, title will take effect from the date of delivery to the escrow. This is known as the doctrine of "Relation Back." Note: Earnest money deposits should be held in an "escrow" or "trust" account.

If a grantor signs a deed, which is not placed in escrow and dies before it is delivered to the grantee,  the deed is void and cannot be delivered by the grantor's agent. However, the purchase and sale agreement signed prior to the grantor's death is enforceable in probate court against the estate of the deceased. An administrator will be appointed by the court to execute a deed.

DEED TAX STAMPS

All states impose a deed transfer tax, which is based upon the sale price, less any take-over liens. For example, a property is sold for $100,000 with the buyer assuming a $40,000 mortgage. The transfer tax would be based upon $60,000. In Massachusetts the tax is paid by the grantor at the closing. For a discussion of Massachusetts deed tax stamps.

RECORDING INTERESTS IN REAL ESTATE

All states have recording offices, either city or county, where instruments affecting title to real estate may be filed for recording. In Massachusetts and New Hampshire, deeds are recorded in the Registry of Deeds for the county where the property is located. The records are open to the public.

CONSTRUCTIVE NOTICE

As previously noted, recording a deed is not required for the validity of a conveyance of land as between the grantor and grantee. However, recording protects the grantee from claims of third persons without actual knowledge of the transfer. By law, persons are presumed to have knowledge of whatever is recorded. This is known as constructive notice, which assumes that recording gives notice to the entire world of the recorded document and its contents. For example, Silverman delivers a deed to Dale, which does not get recorded for three days. Prior to recording, Silverman is sued and the plaintiff records a lien against all of Silverman's property. The lien is valid, since there is a presumption that Silverman still owned the property.

TITLE SEARCH

Before accepting a deed, a buyer should have an attorney search the public records for defects in title. The attorney will prepare an abstract of title, which is a history of the chain of ownership. From this it can be determined if there are any defects or outstanding claims against the title. A title search is not a guarantee of clear title. It is the attorney's certification or a title insurance policy upon which the buyer relies. Note: Licensees should suggest consulting an attorney when prospective buyers ask advice on how to take title to a property.

TITLE INSURANCE                             

A title insurance policy compensates or reimburses the insured (owner, mortgagee, or lessee) for losses sustained by reason of defects in the title. The title insurer will defend any suits attaching the insured's interest. The premium for title insurance is a one-time charge payable by the grantee at the closing. Note: The one-time cost of a title insurance policy is paid when the policy is issued. There are two kinds of title insurance policies:

1. Owner's Title Insurance — protects the owner and the owner's heirs so long as they have an interest in the property.

2. Mortgagee's Title Insurance — protects the mortgage lender up to the balance due on the mortgage.

CLOUD ON TITLE, COLOR OF TITLE, ACTION TO QUIET TITLE

CLOUD ON TITLE

A "cloud on title" is an apparent defect in title, which may be shown to be invalid or ineffective by evidence to the contrary. For example, a widow, who owns property jointly with her late husband, delivers a deed to her property after her husband's death. The grantee would have a "cloud on title" which could be cleared by the recording of the husband's death certificate.

COLOR OF TITLE.

"Color of title" is an expression used to describe a deed or other instrument, which appears to convey title, but may not because of some defect not apparent on its face. For example, a person who accepts a deed from another who does not own the land receives only "color of title". In other words, on its face, the deed appears to  be valid. Actually, all deeds contain "color of title" and are valid until successfully challenged by a party claiming a paramount interest.

ACTION TO QUIET TITLE.                                  

An action to quiet title is any type of litigation instituted by a property owner to clarify the owner's title by removing any interest or claims of others.

TORRENS SYTEM - REGISTERED LAND

The Torrens System is a procedure for registering land for the purpose of verifying ownership and for determining the rights of all persons claiming an interest in the land. About ten states have adopted the system, which was developed in 1857 by an Australian named Sir Robert Torrens. In states that use the system, it is not compulsory to register land, and the standard recording system is still used.

To register land, the owner files a petition for a hearing in the Land Court. The petition must include a plan of the land, which is approved and endorsed by the local planning board. The abutters and all other interested persons are given legal notice of their right to attend the hearing in order to protect their interests or to rebut the petitioner's claim. Upon conclusion of the hearing, the Land Court determines the rights of all parties and orders the property to be registered. The owner receives an official Land Court Certificate of Title, which shows the state of the title, and the person in whom it is vested.

CONVEYANCE OF REGISTERED LAND

When title to registered land is conveyed, the grantor must deliver a deed. The deed must then be recorded for the existing certificate to be canceled and a new certificate is created. The Land Court gives the certificate of title to the Registry of Deeds and then title passes only when the deed is recorded in the name of the new owner.

Registering land establishes an indefeasible title and assures anyone dealing with the property that they need only take notice of the rights and claims, which are registered with the court. It is a form or action to quiet title in cases where there is a dispute over boundary lines, conflicting claims of ownership, or there is a question of validity of liens, rights of way or other claims against the property. Registration provides the same protection as title insurance. Generally, States have established indemnity funds to reimburse a certificate holder who has suffered a loss as a  result of a mistake of the Land Court.

By law, easements and title by adverse possession cannot be established or claimed against land after it has been registered.

LAND DESCRIPTIONS

The description of property in a deed should be sufficient to identify the property to be transferred. it is usually a "legal" description; but it may be otherwise described if such other descriptions will positively point out and identify the property.

The five commonly used methods of describing the location of land are:

INFORMAL REFERENCES

Lot numbers and street addresses are informal ways of describing land. Although easy to understand, an informal reference, by itself, is not  considered accurate enough to be an acceptable description in a deed. A street address does not provide boundary lines, and, over the  years,  names may change. Consequently, the use of informal descriptions is limited to documents or contracts where precision is not as important. For example, a lease may describe the rented premises simply as "Apt. #1, 23 Oak St., Lynn,  Mass."   

METES AND BOUNDS DESCRIPTION  

In the Northeast, property is generally described in deeds by metes and bounds. There are two forms of metes and bounds descriptions. The first method describes the boundaries by using terminal points, such as monuments (fixed  objects), adjoining properties, and plan references. The boundary is shown as running for a certain distance in a general compass direction. The total area of the property is usually expressed as "more or less" since the exact area may not be known.

Oftentimes a description will refer to a natural or artificial, physical object on the ground, such as a tree, stone, fence, etc. These objects are referred to as monuments, and are used to establish boundaries even though they may conflict with bearings or measured distances.  For example, a description might say, "ninety feet in a southerly  direction to the oak tree." If the actual distance is  ninety-two feet, the oak tree is recognized as being the extent of the boundary.

The second method of describing property by metes and bounds uses geographic references. A surveyor prepares the description using precise information as to the direction and length of each boundary. The length of the line may be shown in feet to the nearest hundredth rather than inches. The direction of the line is measured by its bearing or angle with respect to the north-south line (meridian).

Note: The "metes and bounds" method of property description uses measurements of definite distances in indicated directions.

Figure 2:1 Shows an example of a typical metes  and bounds description used in Massachusetts and other New England states:

Figure 2:1 

See example at end of chapter

Metes and Bounds Description. 

The land in Brookline, Massachusetts, bounded and described as follows: 

NORTHERLY by Oak Street, 80 feet; 

EASTERLY by land of Day as shown as lot B on a plan of land recorded in Plan Book 2867, page 92,100 feet;

SOUTHERLY by land of Lee as shown as lot D on said plan, 80 feet;

WESTERLY  by land of Barr as shown as lot E on said plan, 100 feet; 

Containing in all,  8,000 square feet of land, more or less.

REFFERENCE TO RECORDED MAPS, PLANS OR PLATS

When a deed describes land by reference to a recorded plat or map, the grantor is considered as having adopted the plat or map as a part of the deed; the grantee takes title in accordance with boundaries so identified. A plat map uses a lot of boundaries and dimensions. Surveyor's plans or plats, which have been approved by the local planning board, are filed for recording in the registry of deeds.

REFERENCE TO RECORDED DOCUMENTS OTHER THAN PLANS

Land may also be described by a reference to a previously recorded deed or mortgage. For example, a grantor may state in a deed, "being the same premises conveyed to me by deed of Jones, dated May 15,1988, and recorded in Essex, Registry of Deeds, Book 3570, page 75."

KEY WORDS AND PHRASES