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Understanding Deeds and Leases: Essential Elements and Types Explained

This chapter covers the key elements of deeds and leases, outlining their importance in real estate transactions. A deed is a written document transferring ownership of real estate and must include elements such as party designations, legal descriptions, and grantor signatures. Various deed types, including general warranty, special warranty, bargaining and sale, and quitclaim deeds, are explained. Additionally, the chapter delves into leases, detailing the agreement between landlords and tenants, lease requirements, types, duration, payment methods, and rights and obligations associated with both parties.

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Understanding Deeds and Leases: Essential Elements and Types Explained

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  1. Chapter 5 Deeds and Leases

  2. Deeds • Written document that transfers title (ownership) of real estate • Necessary Elements of a Deed • Designation of the parties • Consideration given by grantee • Legal description • Specific interest conveyed • Signature of the grantor and witnesses • Should be publicly recorded

  3. Additional Deed Elements • Covenant against encumbrances • Covenant of seisin • Covenant of quiet enjoyment • Covenant of further assurances • Warranty forever

  4. Types of Deeds • General warranty deed • Broadest Type of Deed • Grantor assures no liens exist except those of public record • Special warranty deed • Limits seller’s warranties to only seller’s ownership period • Bargain and sale deed • Carries no warranties against liens or other encumbrances but does imply that grantor has right to convey title. • Grantor usually warrants they did not cause any problems to title during their ownership

  5. More Deed Types • Quitclaim deed • Transfers whatever interest grantor has but doesn’t imply any valid interest at all. • Commonly used to clear title defects • Deeds for special uses • E.g. Executor’s deed • Executor conveys title held by deceased but executor doesn’t claim any other warranties.

  6. Leases • Agreement between a property owner and tenant that transfers the rights of use and possession • Requirements of a Properly Prepared Lease • Names of the lessor (landlord) and lessee (tenant) • Conveyance of the premises • Description of the premises • Term or duration of the lease • Amount of rent and manner of payment • Duties and obligations of parties • Signatures of the parties

  7. Classification of Leases • Duration of term • Type of Use • Methods of Payment

  8. Lease Duration • Duration of term • Tenancy for stated period • Tenancy from period to period • Tenancy at will • Tenancy at sufferance

  9. Lease Type • Type of Use • Ground Lease • Residential lease • Commercial lease

  10. Lease Payment Methods • Methods of Payment • Gross lease • Net lease • Net net lease • Net net net lease • Fixed-rent lease • Graduated-rent lease • Reappraisal lease • Percentage lease • Index lease

  11. Issues in the Landlord-Tenant Relationship • Renewal option • Expense stops • Security deposits • Improvements

  12. Rights & Obligations of Tenants and Landlords • Covenant of quiet enjoyment • Implied warranty of habitability • Maintenance of common areas • Renewal Clauses • Negative Renewal • Positive Renewal

  13. End Chapter 5

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