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

Major Topics “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner  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

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

Introduction to Deeds (Contd.) Requirements for a valid deed 1. Grantors & Grantees must be identified 2. Grantor’s Signature is required, and signatory’s authority authenticated (Power of Attorney) 3. Consideration 4. Words of Conveyance 5. Legal Description of the property 6. Acknowledgement (Notary’s seal) 7. Deed must be delivered “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

TYPE OF DEEDS “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner 1.Quitclaim Deed 2. General Warranty Deed 3. Special warranty Deed 4. Judicial Deed

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

Invalidating Contracts “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner Major reasons  “Capacity”  Lack of full information  Material Defect  Undue Influence  Duress

Transferring Title to Real Estate “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner  By Inheritance  By Adverse Possession  Transferring Title to the Public: Eminent Domain

Temporary Transfer: Leases “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner  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

Landlord Tenant Rights  “Uniform Residential Landlord and Tenant Act  Security Deposit and Interest  Landlord’s 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

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

Commercial Leases (Contd.)  How Rents May be Increased or Escalated  Ground Lease  Sale Leaseback  Lease with Purchase Options “Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

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