Chapter 8 Contracts and Transferring Real Estate Interests

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Chapter 8Contracts and Transferring Real
Estate Interests
Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
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Major Topics

• Documents used to transfer title to real estate
• Concept of good title to real estate
• Insuring the title to real estate
• Transferring the title to real estate
• Requirements for transferring title under a sales
  contract
• Types of Leases
• Landlord Tenant Laws
• Triple Net vs. Gross leases
• Sale-Leasebacks
• Leases with purchase options
• Important Lease Clauses

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
3
Introduction to Deeds

• Deed
• A written instrument used to convey title to
  real estate

Requirements for a valid Grantor

• Age of capacity
• Sufficient mental capacity

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
4
Introduction to Deeds (Contd.)
Requirements for a valid deed

1. Grantors Grantees must be identified
2. Grantors Signature is required, and signatorys
   authority authenticated (Power of Attorney)
3. Consideration
4. Words of Conveyance
5. Legal Description of the property
6. Acknowledgement (Notarys seal)
7. Deed must be delivered

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
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TYPE OF DEEDS

• Quitclaim Deed
• General Warranty Deed
• Special warranty Deed
• Judicial Deed

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
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Real Estate Title Transfer

• Most common method is the sales contract with
  underlying agreement between buyer and seller,
  which satisfy the following Common Law
  requirements
• The Offer
• The acceptance
• Consideration
• Written evidence

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
7
Invalidating Contracts

• Major reasons
• Capacity
• Lack of full information
• Material Defect
• Undue Influence
• Duress

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
8
Transferring Title to Real Estate

• By Inheritance
• By Adverse Possession
• Transferring Title to the Public Eminent Domain

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
9
Temporary Transfer Leases

• Leases are a class of real estate that include
  possession but no ownership
• Long term leases can be just like ownership in
  the sense of having almost permanent possession
• Forms of Tenancy
• Tenancy for years
• Periodic Tenancy Month-to-month lease
• Tenancy at will
• Tenancy at Sufferance

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
10
Landlord Tenant Rights

• Uniform Residential Landlord and Tenant Act
• Security Deposit and Interest
• Landlords obligations
• Allow the tenant Quiet Enjoyment
• Keep property fit for occupancy
• Make timely repairs (unless these are the
  responsibility of the tenant as stated in the
  lease)

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
11
Commercial Leases

• Base Rent
• Rent paid by tenant to landlord
• Gross Lease
• Landlord pays all operating expenses
• Net Lease
• Tenant pays certain defined expenses
• Triple Net Lease
• Tenant pays for all operating expenses

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
12
Commercial Leases (Contd.)

• How Rents May be Increased or Escalated
• Ground Lease
• Sale Leaseback
• Lease with Purchase Options
• Lease with Purchase Options

Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner
13
END
Real Estate Principles for the New Economy
Norman G. Miller and David M. Geltner