The Writings of Dr. Joseph Dean Klatt
ARTICLE.01
WHEN
YOU PAY OFF A TRUST DEED...
ARTICLE.02 VESTING
ARTICLE.03 BEFORE
YOU LOOK FOR A REAL ESTATE INVESTMENT...
ARTICLE.04 LEVERAGE
ARTICLE.05 A
MAJOR TRUTH
ARTICLE.06 LIFE
ESTATE
ARTICLE.07 SORRY,
NO SELF HELP
ARTICLE.08 YOU
JUST DISCOVERED...
ARTICLE.09 LEGAL
DESCRIPTIONS
ARTICLE.10 WHAT
IS REAL ESTATE AGENCY?
ARTICLE.11 DID
YOU KNOW?
ARTICLE.12 LET
THE REBA FORCE BE WITH YOU...
ARTICLE 13 THE
HISTORY OF LAND OWNERSHIP
ARTICLE.14 WHY
MEDIATE A REAL ESTATE DISPUTE?
ARTICLE.15 WHY
USE A GRANT DEED?
ARTICLE.16
"CERTIFICATION
OF TRUST"
ARTICLE.17 THE
ROOTS OF YOUR NEIGHBORS TREE...
ARTICLE.18 EASEMENTS
OLD AND NEW
ARTICLE.19
THE
MOST COMMONLY USED DEEDS OF CONVEYANCE
ARTICLE.20 BARGAIN-AND-SALE
DEED:
ARTICLE.21 THE
MOOT-MEDIATION ANGLO-SAXON STYLE
--------------------------------------------------------------
WHEN YOU PAY OFF A TRUST DEED...
Each day property owners make that special final loan payment and are
proud the loan is paid in full. When
a promissory note is secured by a Trust Deed (Deed of Trust) payment of all of
the agreed payments is not sufficient to clear the owners title to their
property. There is a "reconveyance"
which must be filed with the County Recorder to remove the Trust Deed lien
against the property. Some lenders
charge a reconveyance fee of approximately $70 to cover their fee to the Trustee
and the recording fees. Some
lenders are prompt to reconvey their interest on full payment.
Others are not. When a
private individual is the lender it is equally important for the paid in full
borrower to be sure the reconveyance is recorded to clear title to their
property. Years ago my office
listed and sold a 4.4 acre parcel in Vista, California which was "free and
clear." The owner showed us
the payment schedule and all of the cancelled checks.
When we checked the County Recorder's records the trust deed had not been
reconveyed. "After you made
the final payment did the lender send you anything?" I queried.
"Yes, I have it in my safety deposit box," she replied.
Even though the loan had been paid off 15 years previously the
reconveyance was executed in recordable form.
She was the lucky one. ALWAYS
clear your title of liens and encumbrances when you pay them... it is your
responsibility to be sure it is done.
Joseph
Dean Klatt PhD Real Estate Law
VESTING
The manner of taking title to Real
Estate may have significant legal and tax consequences.
In the process of listing a home for sale we were working with a man who
said he was unmarried. This agreed with the grant deed for his property.
I suggested he have a copy of his divorce papers ready for the title
company to review when we started escrow. He
replied, "I'm not divorced." For
clarification I asked, "Were you ever married?"
"No." "Then
you are a single man." We
corrected this title vesting status error after consultation with the title
company involved by escrow drawing the Grant Deed in a specific manner.
What is vesting status? Vesting
status designates a person's gender and marital or family status.
An example is, "JOHN DOE AND MARY DOE, HUSBAND AND WIFE AS COMMUNITY
PROPERTY." When family members
take title jointly an example is, "MARY DOE (Mother) A WIDOW AND SUSAN DOE
(DAUGHTER) A SINGLE WOMAN AS JOINT TENANTS.
In cases of a corporation the designation identifies the State of
incorporation and that it is a corporation.
Example: Commercial Sales Ltd. Inc., a FLORIDA corporation.
A California corporation is a domestic corporation, another state's
corporation is a foreign corporation and another country's corporation is an
alien corporation. In the case of
trusts there are multiple designations too numerous to expand on here.
The concept involved in vesting and status is to clarify the Owner, the
type of legal entity they are, and, the interest they have legally in the
property. Who is licensed to advise
you on this important matter? Your
lawyer.
Joseph
Dean Klatt PhD Real Estate Law
BEFORE YOU LOOK FOR A REAL ESTATE
INVESTMENT...
The science of real estate investing
is more than a formula to achieve wealth through the buying and selling of real
property.
The best real estate investors have a
generalized long term goal based on factors such as their earned income, their
real estate investment experience, their knowledge of real estate law, their
"people skills" and a host of other dynamics.
Step 1 is to determine what you want and need from a real estate
investment. Second, you need to
determine how much investment capitol you have available and how much you should
keep in reserve. Third, carefully determine whether your situation and
temperament are best suited to a high leverage situation, a medium range
leverage situation, or even a no leverage situation.
Your accountant or tax attorney can help you define these parameters.
Fourth, you should decide whether you prefer a "buy and hold"
philosophy or a "buy sell buy sell" philosophy.
It is best to choose one or the other rather than mixing the 2
philosophies. Another consideration
is the type of property you decide to focus on; single family residences,
condominiums, 2-4 residential units, 5 to 15 residential units, 16 or more
residential apartments, commercial properties, industrial properties, mixed use
properties, individual lots, agricultural or development land.
Once you have established your generalized goal it is then time to
educate yourself on your chosen area. While
you are doing this you should select a bank or mortgage company and pre-qualify
for a loan. When you have determined these basic factors and are ready to
start looking to buy investment Real Estate remember 2 things: 1. you make your
profit when you buy, and, 2. use the services of a licensed Real Estate Agent.
Professional Real Estate investors do.
Joseph
Dean Klatt, PhD, President,
Joseph Dean Klatt Realty Inc.
LEVERAGE
Recently I was asked to define
"leverage" in the context of Real Estate investing.
This is what it means to me. When
purchasing investment Real Estate the normal procedure is to pay part of the
purchase price in cash and to finance the balance.
The more cash and the less financing, relatively speaking, one uses
decreases the leverage. Conversely,
the less cash and the more financing one uses increases the leverage.
The more one borrows, the higher the risk and the less one borrows the
less the risk involved. An example
may clarify: Assume a $500,000
purchase price for a duplex generating $3,200 rent per month. If you put $100,000 cash down and borrow $400,000 you would
have more leverage than if you put down $200,000 and borrowed $300,000.
If, after one year the property has increased in net sales value to
$550,000 and without offsetting for the difference in monthly payments the
return would be 50%. If the cash
down payment had been $200,000 for the same property the return would be 25%.
If you had paid all cash for this property and sold it as above your
return would be 10%. This is too
simplistic an example as you would also have $38,400 in rental income during the
year. Fixed costs independent of
financing are property taxes, maintenance and fire insurance.
Assume this is $9,000 a year. The
all cash buyer will profit $29,400 in net rents + $50,000 appreciation for a
total of $79,400 or 15.88%. The
Buyer who put $200,000 cash down collected the same rents and paid the same
fixed costs but also had to pay a mortgage payment of approximately $2,100.00
monthly. This buyer would net $4,200 + $50,000 for a total of $54,200
or a 27.1% profit. The buyer who
put $100,000 cash down had a monthly mortgage payment of approximately $2,800.
This buyer would have a net loss of $4,200 per year.
His profit would be $50,000 less $4,200 for a net profit of $45,800 or
45.8%. "What's the catch?" you ask. This is a hypothetical mathematical model.
It doesn't take into account changes in the local, national and
international economies, vacancies, repairs beyond normal maintenance and it
assumes you will find the perfect buyer at your price in exactly 1 year.
This model also does not deal with tax benefits of owning and operating
investment real property.
Joseph
Dean Klatt PhD Real Estate Law
Joseph
Dean Klatt Realty Inc.
A MAJOR TRUTH
When you make an offer to purchase
Real Estate you are the "Offeror"
and in that capacity you are in complete control of the Offer because you create
the terms upon which the Offer may be accepted.
Therefore, if you specify that your Offer expires on a certain date or on
the occasion of any specific event, the power of acceptance is expressly limited
by those terms no matter how unreasonable those terms may be.
In the absence of some grounds for the application of the Doctrine of
Estoppel, no acceptance and therefore no contract could be created after the
point fixed in the Offer for its expiration.
Thus, if you made an offer to me to buy my Camino de la Costa home and
you specified that your Offer remains open until "My pet tadpole Hector
passes through puberty" the moment little Hector hops, your offer is dead.
Unless I have accepted your offer in the manner specified before little
Hector's first hop there can be no contract.
Even if I come to you after little Hector's first hop and tell you that I
accept your offer, it forms no contract. At
best, my attempt to accept your offer might be considered a counter offer to
which you could reply with the cruelest word in the English language,
"No."
When you make an offer to purchase in a hot Real Estate market it is
important to think about how long and under what conditions you want your offer
to remain open for acceptance. Remember
to discuss this question with your Real Estate Agent when you are contemplating
making an Offer to Purchase. Your
Attorney is an excellent source for advice in this area.
Joseph
Dean Klatt PhD, President,
Joseph
Dean Klatt Realty Inc.
LIFE ESTATE
Just what is a Life Estate?
Technically speaking, a Life Estate is a Freehold Estate in Real Property
the duration of which is limited in time by the life of a specific person or the
lives of specific persons. The
balance of the freehold is called the Remainder Interest.
A Life Estate Grant Deed might read, "JOHN WELLER, a widower,
GRANTS TO JAMES BUYER, A SINGLE MAN, FOR HIS LIFE" and thereby
create a Life Estate in James Buyer. As
the holder of the Life Estate James has the full and complete use of the
property during his lifetime, is required to pay the real property taxes and to
maintain the property including all improvements thereon.
Today, this would normally include maintaining adequate fire and
liability insurance. In this example, because no Remainder Interest was created,
should James predecease John the Life Estate would cease to exist and James
Buyer's interest in the land would revert to John. Commonly the person creating the Life Estate also creates a
Remainder Interest. Example:
JOHN WELLER, A WIDOWER, GRANTS TO JAMES BUYER, A SINGLE MAN, FOR HIS LIFE
AND THE REMAINDER TO SUSIE CUTE, A SINGLE WOMAN.
Presuming that Susie outlives James, she will have a Fee Simple Interest
in the Real Property when James dies. If
Susie dies first and James dies next with John surviving both of them then the
entire Fee Simple will revert to John. A
Life Estate is more complex than you may have thought it to be.
ALWAYS consult your LAWYER before involving yourself in a Life Estate
conveyance. There are legal and tax
consequences you should understand first.
Joseph
Dean Klatt PhD, President,
Joseph
Dean Klatt Realty Inc.
SORRY, NO SELF HELP
If your neighbors tree overhangs your
property are you allowed to cut off the overhanging limb?
What about possession being nine tenths of the law?
If your neighbor's tree is planted so the trunk of the tree is located on
his property, who owns the limb that hangs over the fence into your airspace?
Is the overhanging limb real property or personal property?
Before you get the saw out of your garage you should know the answers to
these questions. Let's begin by understanding the character and ownership of
the tree. While in the ground, the
tree is real property. If the trunk
of the tree is on your neighbor's land, the entire tree belongs to him.
If you, with your trusty saw, while being careful to stand on your
property reach up and saw off the offending limb on the property line... what
have you done? The tree limb was
real property so you may now be subject to a suit in Civil Court for the
Intentional Tort of Trespass to Land. Once
you had completed severing the limb it became personal property because it was
no longer attached to the tree. Now
you may be subject to a Trespass to Chattels tort action.
Because you subsequently have exercised exclusive dominion and control
over the tree limb of your neighbor, you may be subject to a tort action for
Conversion. All 3 being Intentional
Torts you have subjected yourself to suit for actual damages and punitive
damages as well as Court costs. What
is the correct procedure if your neighbor's tree overhangs your property? Discuss the problem with him and obtain his written
permission to remove the limb. If
he refuses, see your lawyer. Until
you have the legal right to remove the limb, leave the saw alone!
by
Joseph Dean Klatt PhD, President,
Joseph Dean Klatt Realty Inc.
YOU JUST DISCOVERED...
You have owned a home
for more than 20 years and during all of those years everything was just fine.
Then... your next door neighbor contracts with a tree stump removal
company to get rid of a large, unsightly, long dead tree stump.
Your next-door neighbor does not consult you first because the stump is
on his land. In the process of
removing the tree stump the digging machine hits a pipe and water shoots into
the sky. The diggers locate the
water meter and shut off the valve. It
is soon discovered that the water supply pipe goes across your next-door
neighbor's property to your home. Your
next-door neighbor checks his title policy and confirms that there is no
easement for this water supply pipe. How
can you remedy the problem? You
could start a partnership with a business associate, buy your next door
neighbor's property and purchase an easement from the new partnership, or, you
could purchase an easement from your neighbor or, you could file a lawsuit
asking the Court to grant you an easement which you have acquired by adverse
possession, or, you could move the water pipe to a new location on your
property. To do this you will need
your next door neighbor's permission as to enter onto his land without his
permission is a trespass. In any
case, should this happen to you, consult your lawyer before doing anything.
If you think this scenario could never happen... let me introduce
myself... I'm
Joseph Dean Klatt PhD, President,
Joseph Dean Klatt Realty Inc.
LEGAL DESCRIPTIONS
When you acquire or transfer real
property the DEED transferring the title will contain a legal description.
Initially title to TOWNSHIPS were granted.
A TOWNSHIP has 36 Sections, covers an area of 36 square miles,
and measures 6 miles by 6 miles. There
are 36 one mile square Sections in a TOWNSHIP.
A Section, 1 mile by 1 mile (5,280 feet X 5,280 feet), contains
27,878,400 square feet of land which equals 640 acres (An acre has 43,560 square
feet).
A Section may have been divided into 4
parcels of 160 Acres each. This was
done by a deed of conveyance to either the North West quarter, the North East
Quarter, the South East Quarter, or, the South West Quarter of any particular
Section. Commonly the newly created Quarter Sections were subdivided again into
fourths; The North West Quarter of the North West Quarter of a Section, etc.
A theoretical Quarter Quarter Section contains 40 Acres.
This gave rise to the phrase, "the lower 40" still in use
today. Legal descriptions that use
a Township and Section or fractional divisions thereof (one half, one quarter,
one eighth, etc.) are known as "fractional descriptions."
As parcels of land were subdivided and re-subdivided there came a point
when developers would subdivide a parcel into more than 4 lots.
This eventually (pursuant to the Subdivision Map Act) required the filing
of a subdivision map delineating all of the lots which are split into tracts,
blocks and lots. A lot in a
subdivision might be designated as, "lot 4 in block 7 of La Jolla Seas #1,
in the City of San Diego, County of San Diego, State of California according to
map thereof no. 1111 filed in the office of the County Recorder of San Diego
County March 16, 1948.
Another way to describe real property
is by "Metes and Bounds." Always
read your Preliminary Title Report carefully.
The time to ask questions is BEFORE closing escrow.
If you have any doubts about the title report, consult your Real Estate
Agent and your Attorney.
Joseph
Dean Klatt PhD, President,
Joseph
Dean Klatt Realty Inc.
WHAT IS REAL ESTATE AGENCY?
Generally, Agency describes the
relationship between 2 parties in which one party (the agent) agrees to
represent or act for the other (the principal). Real Estate Agents work pursuant to a written contract which
sets forth their duties and responsibilities as well as the compensation the
Principal pays for services rendered.
When you enter into a written contract with a Real Estate Agent which authorizes the Agent to offer your real property for sale and that the Agent will use best efforts to sell the property, what should you expect from your Agent?
Agency law requires that any person
acting as an agent for another do the following:
1. performance; an agent has an
affirmative duty to perform the promises made to the principal.
In a listing agreement the phrase "use best efforts" is
commonly the standard to which an agent is held.
This does not mean that the Agent promises to sell your property.
2. notification; the Agent has an
affirmative duty to keep the Principal informed as to the status of the listing,
all offers, open houses, multiple listing service caravans and any other
material facts or matters concerning the sale of the property.
3. loyalty; the Agent has an
affirmative duty of loyalty to the Principal which requires the Agent use best
efforts honestly and conscientiously in marketing the listed property.
4. obedience; an Agent has a duty to
comply with the principal's legal requests, such as, not holding Open House on
December 26th.
The principal cannot compel the agent
to do illegal acts. An example
would be race or gender discrimination.
5. accounting; an Agent has an
affirmative duty to provide an accounting to the Principal of all funds
belonging to the principal. This
accounting is normally furnished through escrow.
Joseph
Dean Klatt PhD, President,
Joseph
Dean Klatt Realty Inc.
DID YOU KNOW?
Federal Law defines a DWELLING as any
building or structure which is occupied, or, designed to be occupied, as a
residence by one or more families, and, any vacant land offered for sale or
lease for the construction of a residential building or structure.
Therefore, for purposes of the Federal Fair Housing Act (FFHA), if you
own AND ARE TRYING TO SELL An unimproved piece of land which is zoned to permit
residential use... you are deemed to own a DWELLING.
Why is this so? The word
DWELLING has been broadly defined to stop and to prevent discrimination.
The FFHA prohibits discrimination in the sale, rental, or, advertisement
of dwellings; offering and performing Brokerage services; making loans to buy,
build, improve or repair a dwelling; the purchase or sale of real estate loans;
or appraisal of real estate. Discrimination
is broadly defined to include ANY ACTIONS WHICH ARE BASED ON A PERSON'S RACE OR
COLOR, NATIONAL ORIGIN, RELIGION, SEX, FAMILIAL STATUS, OR, HANDICAP.
FAMILIAL STATUS refers to one or more individuals who are under the age
of 18 years and live with a parent or person having legal custody, or, is a
legal custodian.
If you own residential income property
it is vital that you have a full understanding of all of the things you must do
and must not do. If you have
questions of a legal nature, consult your lawyer.
If you have questions of a Real Estate nature, consult a licensed Real
Estate professional. If you have questions of a property management nature,
consult a licensed Real Estate Broker who is actively engaged in Real Property
Management.
Joseph
Dean Klatt PhD, President,
Joseph
Dean Klatt Realty, Inc.
LET THE REBA FORCE BE WITH YOU...
The La Jolla Real Estate Brokers
Association Inc. (REBA) was founded in 1924 by a group of Real Estate Brokers
seeking to best represent Buyers and Sellers of La Jolla Real Estate.
The purpose of the Association is to develop and maintain the dignity of
the Real Estate profession by insisting upon policies of honesty and fair
conduct among member Brokers, Associates and Affiliates.
Compliance with all laws is a quintessential component of REBA membership. The REBA Board of Directors is committed to maintaining a level playing field for all of its members. The benefits to the public are measured by the long-term success of REBA. As a professional Real Estate Association REBA continues to flourish successfully operating a multiple listing service providing its members an on line computer data base as well as a printed listing book. A weekly workshop meeting is conducted for REBA members in order to share with each other their new listings and properties which will be held open for caravan tours. REBA is recognized throughout the United States as one of the best Real Estate Multiple Listing Services. When you want to lease, buy, sell or exchange Real Estate in La Jolla, Pacific Beach, University City, Del Mar, Rancho Santa Fe, Clairemont, Point Loma, Ocean Beach, Kensington-Mission Hills, or, Carmel Valley, remember to use the services of a REBA Professional. You'll be glad you LET THE REBA FORCE BE WITH YOU.
Joseph Dean Klatt PhD, President,
La Jolla Real Estate Brokers Association, Inc.
THE HISTORY OF LAND OWNERSHIP
Historically, the legal concept of land ownership of a specific plot of
land by a named individual was brought to the New World by immigrants from
England. Land ownership in England
originated with a Grant from the Crown in any one of 3 Freeholds; Fee Simple
Absolute, Defeasible Fee (a.k.a. Fee Simple Determinable) and Life Estate. The concept of Fee Simple ownership was originally brought to
what was later known as England by the Romans who called the concept Feodo
Simpliciter. Fee Simple Absolute
ownership of land meant the identified owner held the greatest ownership of that
land under law for an unlimited duration. This
form of real property ownership entitled the property owner to use, possess, or
dispose of the property as he or she chose during his or her lifetime.
Upon death, the interest in the property passed to the owner's
descendants.
Today, in the State of California, the concept of Fee Simple Absolute
ownership is functionally theoretical. The
government limits the bundle of rights held by a landowner to an extent that the
term was shortened to Fee Simple and is now often described by title insurance
companies simply as a "fee". Some of the ways that government has decreased the bundle of
rights are through zoning restrictions, building restrictions, and use
restrictions. Further reducing the
size of the bundle of rights held by a landowner are the easements for water,
sewer, gas, electric, telephone and, most recently, cable TV.
Some real property is encumbered by Covenants, Conditions and
Restrictions recorded against the land which run with the land and bind
subsequent owners to their provisions.
When California became a State it retained the Spanish concept of
Community Property Law. This
differs from most States where Community Property rights are not recognized.
Joseph
Dean Klatt, PhD. Real Estate Law
WHY MEDIATE A REAL ESTATE DISPUTE?
Mediation is an alternative dispute
resolution process which has attained major acceptance in the legal arena in
recent years. What is mediation?
Mediation is a process through which disputing parties convene with a
mediator in a collaborative effort to resolve their dispute in a manner
beneficial to all of the disputing parties.
Unlike litigation through the Courts and binding arbitration, mediation
is non-binding by its very definition. In
California (by statute) it is a confidential process.
The statute extends the confidentiality to any subsequent Court
proceeding.
Factors favoring mediation include an ongoing family and/or business
relationship between the parties, a desire for a confidential resolution of the
dispute, an impasse as to the value of the claim, communication breakdowns, and,
the desire to save time and costs.
The goal in mediation is to secure gains for all of the disputing parties which
are consistent with the mixed merits of the particular dispute and furthering
their interests within the framework of traditional remedies or developing
individualized remedies that promote the special interests of the parties.
It is significant that in mediation the parties have the opportunity to
develop creative solutions as opposed to submitting the dispute to the courts
where a win/lose decision will be the outcome.
If disputing parties find common ground in mediation and arrive at a
negotiated settlement, how is it enforced?
The mediator DOES NOT write up an agreement.
The parties (often with the aid of their attorneys) execute a memorandum
which states the terms of the agreement. In
the event one party to the agreement fails to comply with its terms the
complying party may file the agreement with the Court and have it entered as a
Judgment against the other party.
Who is licensed to advise you on
whether or not to mediate? Your
lawyer.
Joseph Dean Klatt PhD Real Estate Law
Private Mediator & Court Mediator
WHY USE A GRANT DEED?
When conveying or acquiring title to
Real Estate it is important to use the proper form of deed.
Before using a deed consult your lawyer regarding which deed is required
to achieve your desired results. Consider
the difference between a GRANT DEED and a QUIT CLAIM DEED.
A GRANT DEED is a deed which recites words of conveyance and
consideration. A GRANT DEED
warrants that the GRANTOR has clear title and that the GRANTOR has not conveyed
the property to anyone else. A
Grant Deed also conveys to the Grantee "after acquired title" i.e. any
title interest in the property the Grantor may acquire in the future.
A QUITCLAIM DEED is a deed which
recites words of conveyance and consideration.
A quitclaim deed is used where the grantor wishes to convey any title
interest or claim the grantor may have but does not guarantee or assure the
grantee that the grantor has any legal title whatsoever.
A quitclaim deed offers the least protection against title defects.
The concept of "after acquired
title" is little understood. An
example may help clarify the concept. Blood
sisters Mary and Martha purchase a vacant lot and take title by Grant Deed
paying cash. Subsequently Mary
marries John and John executes a Quit Claim Deed to Mary as her sole and
separate property to clear any possible Community Property interest he may
acquire in the lot by marriage. Mary
places the Quit Claim Deed in a safety deposit box unrecorded.
Mary and Martha sell the property to James giving him a Grant Deed which
he records. James then discovers
that Mary is married and the title is clouded by John's possible Community
Property interest. Mary need only
record her Quit Claim Deed to clear title in James because the Grant Deed
previously recorded by James carries with it "after acquired title"
which for title purposes passes in this example upon recordation of the Quit
Claim Deed.
Joseph
Dean Klatt PhD Real Estate Law
"CERTIFICATION OF TRUST"
Let's say you bought a home 10 years
ago. 5 years ago you completed an
Estate Plan. A part of the estate
plan was to create a Revocable Family Trust.
Now you want to take advantage of the exceptionally low refinance
interest rates. After obtaining
loan approval, you receive a "Certification of trust" form from
escrow. What is it and why are they
asking you to fill out this form?
A certification of Trust is your
acknowledgement in front of a Notary Public that the trust does exist, has the
power to encumber and to convey. In
other words, the trust is a viable entity and the trustee has the power to
borrow against trust assets and to buy or sell real property.
The title company or title insurance company involved is requiring the
certification so it can issue the insurance policy to the new lender.
As you fill in the form you get to a
question regarding the "settlor" of the trust.
Settlor is defined as "one creating a trust" and also "one
who furnishes the consideration for the creation of a trust."
If you created the trust and you funded the trust, you are the settlor.
Most title companies and title
insurance companies should be able to accept the Certification of Trust but
generally speaking, if there has been a death of one of the settlors or the
trustee, they may require a copy of the trust.
This includes any amendments or trust modifications.
Title officers are familiar with Declarations of Trust and will review
the documentation you provide to verify that you have the power, after the death
of the settlor or the trustee, to encumber the trust property.
Joseph
Dean Klatt PhD Real Estate Law
Joseph
Dean Klatt Realty, Inc.
THE ROOTS OF YOUR NEIGHBORS TREE...
If your neighbor's tree's roots are
lifting up your foundation... who is responsible for the damage?
If your neighbor's tree is planted so that the trunk of the tree is
located on his property, who owns the invading tree root which is damaging your
foundation? Let's begin by
understanding the character and ownership of the tree.
California Real Estate law is clear on this point.
While in the ground the tree is Real Property.
If the trunk of the tree is on your neighbor's land, the entire tree
belongs to your neighbor. If you,
with your trusty ax, while being careful to stand on your property, chop off the
offending root at the property line... what have you done?
The tree root was your neighbor's Real Property, therefore, you may be
subject to a suit in Civil Court for the Intentional Tort of Trespass to Land.
Once you severed the tree root it was no longer Real Property and became
Personal Property because it was no longer attached to the tree.
Now you may be subject to a Trespass to Chattels tort action. Because you have subsequently exercised exclusive Dominion
and Control over the severed tree root of your neighbor, you may be subject to a
tort action for Conversion. All 3
being Intentional Torts you have subjected yourself to suit for actual damages
and punitive damages as well as Court costs.
What is the correct procedure if your neighbor's tree root is undermining
your foundation? Discuss the
problem with him and obtain his written permission to remove the tree root.
If he refuses, see your lawyer. Until
you have the legal right to remove the tree root, leave the ax alone!
A Court might order him to Abate the Nuisance, but if you take action
first, you may be liable.
Joseph Dean Klatt PhD Real Estate Law
Joseph Dean Klatt Realty, Inc.
EASEMENTS OLD AND NEW
Hypothetical:
You own 3 parcels of land. Two
have frontage on and access to a public road.
These parcels measure 100 feet by 100 feet.
The third parcel is an interior parcel North of the other two which
measures 100 feet by 200 feet. Access
to this third parcel is via two driveway easements; both are at the Easterly
boundary of the frontage parcels. Each
existing access easement is 20 feet wide. You
have the opportunity to sell all three parcels; each to a different buyer. The easement on one of the parcels is poorly located.
Access to the interior parcel would be enhanced if both easements were on
the outside lot lines. Thus, one of
the easements needs to be moved. What
needs to be done to sell the interior parcel with two well located access
easements?
Let's identify the frontage parcels as
A and B and the interior parcel as parcel C. The easement on parcel B is already at the Easterly lot line,
therefore, nothing needs to be changed regarding that easement.
The problem is how to eliminate the old easement over parcel A and how to
create a new access easement over the Westerly 20 feet of parcel A.
As nothing needs to be changed
regarding parcel B, it can be put into escrow and closed anytime.
With respect to parcel A, timing is significant.
A way to create the new easement over parcel A and contemporaneously to
eliminate the existing easement over parcel A is to sell parcel C before parcel
A. The grant deed to parcel C will
exclude the old easement over parcel A, include the new easement over parcel A
and include the old easement over parcel B.
Thus the old parcel A easement is extinguished, the new parcel A easement
is created and the old parcel B easement is conveyed intact.
EASEMENTS ARE IMPORTANT AND VALUABLE
REAL PROPERTY INTERESTS. CONSULT
YOUR LAWYER BEFORE YOU CREATE OR EXTINGUISH AN EASEMENT.
Joseph
Dean Klatt PhD Real Estate Law
Joseph
Dean Klatt Realty, Inc.
THE MOST COMMONLY USED DEEDS OF
CONVEYANCE
In California the 3 most commonly used
deeds of real property conveyance are the GRANT DEED, the WARRANTY DEED and the
QUIT CLAIM DEED. When you are
conveying an interest in real property it is important to understand that there
are differences between these deed forms and that the deed forms convey a
different level of title to the grantee.
A GRANT DEED is: 1. an instrument of
conveyance, 2. warrants that the Grantor has legal title to convey, and, 3.
conveys to the Grantee any after acquired title.
A WARRANTY DEED is: 1. an instrument
of conveyance, 2. warrants that the Grantor has legal title to convey, but, does
not convey any After Acquired Title.
A QUIT CLAIM DEED IS: 1. an instrument
of conveyance, but, does not warrant that the Grantor has any title what-so-ever
and does not pass any After Acquired Title to the Grantee.
The manner of conveying and of taking
title to Real property may have significant legal and tax consequences.
Before using any of the deed forms described above to convey real
property you should consult your attorney.
Joseph Dean Klatt PhD Real Estate Law, President,
Joseph Dean Klatt Realty, Inc.
BARGAIN-AND-SALE DEED:
Recently, I received a
"Bargain-and-Sale Deed" from Oregon to execute in order to place my
Oregon real property into my existing trust.
I was expecting to receive a Quit Claim Deed to transfer title into my
trust. I have been licensed to sell
Real Estate in California for more than 30 years and had never come across a
Bargain-and-Sale Deed. I researched
to find the answer.
A "Bargain-and-Sale Deed" is
a deed that conveys property to a Grantee for valuable consideration but that
lacks any guaranty from the Grantor about the validity of the title."
A Bargain and Sale Deed is a form of deed of conveyance that is used in
Oregon and may be used in California.
The more familiar "Quitclaim
Deed" is most frequently used to transfer real property into a trust in
California. A Quitclaim Deed is a
deed intended to pass any title, interest or claim that the Grantor may have in
the property but not warranting that such title is valid. A Quitclaim Deed offers the least amount of protection
against defects in the title.
Several years ago a form of Quitclaim
Deed began to be used. It was
denominated a "Trust Transfer Deed" and was, in effect, a form of
Quitclaim Deed. Today, the standard
Quitclaim Deed is most frequently used to transfer real property into trusts in
California.
Whenever you execute any type of deed
to transfer either some or all of your rights in and to real property you should
first consult your attorney. A
licensed Attorney-at-Law is a person who is qualified to advise you on matters
regarding real property deeds.
Joseph
Dean Klatt PhD Real Estate Law
Joseph
Dean Klatt Realty, Inc.
THE MOOT-MEDIATION ANGLO-SAXON STYLE
In my collection of research notes compiled over many years of legal studies, I found these notes on "the moot" an Anglo-Saxon form of dispute resolution. Thus, I share them with you.
in barbaric societies the only law that seemed to effectively control group behavior had its roots in the blood feud. The blood feud required that the clan go to war against any outsider who inflicted harm on a clan member, thereby dishonoring the clan as a whole. Atonement for the humiliation suffered by the victim's kin seemed to be the primary goal. Despite the deterrents this system of justice provided, its inherent violence and its toll on those who were obligated to protect family and clan members prompted reform.
Ultimately a negotiation process was developed in which the victim summoned the perpetrator to "the moot" a forum in which the victim pleaded his case to the community and asked for a redress of his grievance. Community members offered advice about how best to resolve the dispute. When a solution acceptable to both the victim and the perpetrator was found the parties dispersed and the blood feud was averted. When the law assumed a more civilized veneer, the remedies created served as substitutes for the feuding process and thus emerged the concept of monetary compensation. Early in Anglo-Saxon history, individuals were assigned a monetary value based principally on their rank. Money instead of blood was offered as compensation for injured clan pride. The compensation was directed toward the clan instead of the injured individual. Awards were distributed proportionately among the injured person's relatives. There was no distinction between crimes and torts. There seemed to be no concern regarding issues of blame or fault. Even the most remote causal connection was sufficient to justify the imposition of punishment.
Today, mediation is an effective dispute resolution process which is not oriented towards fault. It is oriented towards settlement.
Joseph Dean Klatt PhD, President-Elect,
Association for Dispute Resolution-San Diego, Inc.
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Dear Editor and My Fellow La Jollans:
Real Estate or real property is a
class of property and as such are subject to the protections provided in the
United States Constitution. Viewing
Real Estate as a "bundle of rights", when the bundle becomes smaller
by virtue of governmental and or quasi-governmental action, the property's value
is reduced.
We, the owners of Real Estate in La
Jolla are facing the possibility that our property rights will be diminished by
California Coastal Commission action. Before
taking sides in this important matter, let us defer to the United States
Constitution.
Let us examine the United States
Constitution in light of the ongoing attempt by the California Coastal
Commission to impose new restrictions on properties in La Jolla.
PROPERTY RIGHTS SPECIFIED IN THE
UNITED STATES CONSTITUTION
Article 1, Section 9 of the
Constitution of the United States reads in relevant part, "No bill of
attainder or ex post facto law shall be passed."
Article 1, Section 10 reads, in
relevant part, "No state shall... pass any bill of attainder, ex post facto
law, or law impairing the obligation of contracts..."
Enacted in 1791, the Fifth Amendment
to the United States constitution provides, in relevant part, "No person...
shall be deprived of... property without due process of law; nor shall private
property be taken for public use without just compensation."
Enacted in 1868 the Fourteenth
Amendment, Section 1, provides, in
relevant part, "No State shall make or enforce any law which shall abridge
the privileges or immunities of citizens of the United States; nor shall any
State deprive any person of... property, without due process of law; nor deny to
any person within its jurisdiction the equal protection of the laws."
The California Coastal Commission is
an agency of the State of California and is funded by the State of California.
Proposed Coastal Commission edicts will down-zone real properties in La
Jolla. For those property owners affected by this diminution in
value, can anyone say that a confiscation has not occurred? One has to ask, "Who is really behind the Coastal
Commission's actions?" As a
tax paying citizen, I would like to know.
"Freedoms undefended are soon
lost." Thomas Jefferson, 3rd
President of the United States.
Joseph
Dean Klatt PhD
-----------------------------------------------------
Dear Editor: reference your June 27,
2002 issue
"Freedoms undefended are soon
lost." Thomas Jefferson 3rd
President of the United States
The Red Roost and the Red Rest are
private property.
The Constitution of the United States
reads as follows:
Article 1, Section 9 provides, in
relevant part, "No bill of attainder or ex post facto law shall be
passed."
Article 1, Section 10 provides, in
relevant part, "No state shall... pass any bill of attainder, ex post facto
law, or law impairing the obligation of contracts..."
The United States Constitution
provides in the Fifth Amendment, in relevant part, "No person shall be ...
deprived of life, liberty or property, without due process of law; nor shall
private property be taken for public use without just compensation."
The Constitution provides in the
Fourteenth Amendment in relevant part, "... nor shall any state deprive any
person of life, liberty or property without due process of law; nor deny to any
person within its jurisdiction the equal protection of the laws."
The Owner of the Red Roost and the Red
Rest has vested property rights which are guaranteed by the United States
Constitution. I would not surrender
the slightest Constitutional right for 2 old shacks. Would you? Would
any American?
Respectfully,
Joseph
Dean Klatt PhD Real Estate Law
All
rights reserved
Copyright
© 2004
Joseph Dean Klatt PhD