The previous chapters of this course examined the characteristics of real property, the rights and interests available for ownership, and how title can be held. This chapter will discuss how the ownership of real estate is conveyed from one owner to another - also known as alienation. The transfer or alienation of real estate from one owner to another may be either voluntary or involuntary. There are nine ways to acquire and transfer property:
Transfer by deed
Transfer by will (testate)
Transfer by succession (if no will)
Adverse possession
Accession
Public grant
Patents
Dedication
Court action
A brief discussion of the following terms will be helpful as an introduction to the discussion of conveyances:
Title - The right or ownership interest a person has in real property. Title may be held by an individual, a group of individuals, or in the name of some business or other organizational format. These issues were discussed in Chapter 3 of this course.
Actual title - In Nevada, if there is a mortgage or trust deed against the property, the owner still has full legal title. The mortgage or trust deed is a lien against the property. The lien does not lessen the owner's full legal title. This is because Nevada is a lien theory state. In all lien theory states, the loan constitutes a lien against the real property. In title theory states, the security instrument, if a mortgage, actually transfers title to the lender. If a trust deed is used, the title is transferred to the trustee during the term of the loan.
The title is said to be free and clear title if the title is held with no mortgage lien or other monetary encumbrance or cloud against the property.
Equitable title - the right to receive or demand actual title when all the terms or conditions of the contract have been carried out.
Example: Under a land sale contract, the seller retains title to the property during the term of the loan and the buyer has equitable title, or the right to receive or demand actual title when the contract has been paid in full.
Deed - The written legal instrument or document that transfers title to real property from one party to another.
Bill of Sale - The legal instrument used to transfer personal property. Real estate transactions often involve personal property. The personal property, such as a refrigerator, freestanding range, or washer/dryer are transferred to the buyer by use of a bill of sale.
Grantor and Grantee - The parties to a deed. The grantor is the seller. The grantee is the buyer.
A chain of title is the sequence of historical transfers of title to a property. The "chain" runs from the present owner back to the original owner of the property. A condensed version of the chain of title is known as an abstract of title.