Title, Deeds, Easements, and Liens

Why this topic matters

The current official Florida Sales Associate examination outline assigns 7% of the 100-question examination to Titles, Deeds, and Ownership Restrictions. That means roughly seven questions may come from voluntary and involuntary alienation, notice, condition of title, deed clauses and types, easements, leases, liens, government powers, and deed restrictions.

Title is the legal evidence of ownership. A deed is the written instrument used to transfer title. A person receives title through the deed; the deed itself is not the title. Alienation simply means transfer of ownership.

• Title: evidence of ownership
• Deed: instrument that conveys title
• Grantor: person conveying the interest
• Grantee: person receiving the interest
• Voluntary alienation: transfer by deed, gift, or will
• Involuntary alienation: transfer through foreclosure, tax sale, eminent domain, adverse possession, or intestate succession

Notice, recording, and condition of title

Actual notice means a person directly knows a fact. Constructive notice means the law treats the person as knowing a fact because it is available in the public records or would be revealed by a reasonable inspection. Inquiry notice arises when visible facts would cause a reasonable person to investigate further.

Florida Statutes section 695.01 provides that an unrecorded conveyance, mortgage, or qualifying lease is not effective against a later purchaser for value without notice or certain creditors. Recording therefore gives constructive notice and helps establish priority. It does not guarantee that the instrument is valid or that title is free of defects.

Marketable title is title that a reasonable, informed purchaser would accept because it is free from serious doubt and the threat of litigation. An abstract of title is a historical summary of recorded documents. A title search examines the public records. Title insurance protects against covered title defects under the policy; it does not transfer title or guarantee the property's physical condition.

• Actual notice: direct knowledge
• Constructive notice: knowledge imputed from properly recorded documents or visible possession
• Chain of title: sequence of recorded ownership transfers
• Cloud on title: a claim or defect that creates doubt
• Quiet-title action: court proceeding used to settle competing title claims
• Title insurance: protection against covered title losses

Deed types and the warranties they provide

A general warranty deed gives the grantee the broadest deed warranties. The grantor promises lawful ownership, the right to convey, freedom from undisclosed encumbrances, quiet enjoyment, and defense of title against lawful claims arising before or during the grantor's ownership.

A special warranty deed limits the grantor's warranties to defects created during the grantor's ownership. A bargain-and-sale deed implies that the grantor has an interest to convey but generally contains no full warranties. A quitclaim deed transfers whatever interest the grantor may have, if any, and makes no title warranties.

A quitclaim deed is useful for releasing a possible claim or clearing a cloud, but it does not promise that the grantor owns anything. Special-purpose deeds reflect the authority of the person signing, such as a personal representative's deed, guardian's deed, tax deed, sheriff's deed, or trustee's deed.

• General warranty deed: warranties extend through the chain of title
• Special warranty deed: warranties limited to the grantor's ownership period
• Bargain-and-sale deed: conveys an interest with limited or no express warranties
• Quitclaim deed: conveys the grantor's present interest, if any, with no warranties
• Special-purpose deed: signed under a particular legal authority

Easements and other private restrictions

An easement is a nonpossessory right to use another person's land for a stated purpose. The easement holder does not own or possess the burdened land. An easement appurtenant benefits one parcel, the dominant tenement, and burdens another, the servient tenement. It normally runs with the land when the parcels are transferred.

An easement in gross benefits a person or organization rather than another parcel. A utility easement is a familiar example. Easements may be created expressly in writing, by implication, by necessity, or by prescription. Florida Statutes section 704.01 recognizes both common-law and statutory ways of necessity for qualifying landlocked property.

An encroachment is an unauthorized physical intrusion, such as a fence crossing a boundary. A license is revocable permission to use land and generally creates no property interest. Deed restrictions and restrictive covenants are private controls. They differ from zoning, which is imposed by government.

• Dominant tenement: parcel benefited by an appurtenant easement
• Servient tenement: parcel burdened by an appurtenant easement
• Easement in gross: benefits a person or organization
• Encroachment: unauthorized physical intrusion
• License: personal, usually revocable permission
• Deed restriction: private limitation in a deed or recorded covenant

Liens and priority

A lien is a claim against property that secures payment of a debt or obligation. A voluntary lien is created by the owner's choice, such as a mortgage. An involuntary lien arises by law, such as a property-tax lien or judgment lien. A specific lien attaches to identified property; a general lien may attach to all nonexempt property of the debtor in the jurisdiction.

Mortgage liens and property-tax liens are specific. A judgment lien is generally classified as general. A construction lien may secure payment for qualifying labor or materials improving a particular property. Liens are encumbrances: they burden the property but do not by themselves give the lienholder possession or ownership.

The usual priority rule is first in time, first in right, based largely on recording. Important exceptions exist. Real-property tax liens generally receive priority over previously recorded private liens. Subordination agreements can also change the normal order.

• Voluntary and specific: mortgage lien
• Involuntary and specific: property-tax or construction lien
• Involuntary and general: judgment lien
• Priority: usually based on recording, subject to statutory exceptions
• Subordination: agreement placing a lien behind another lien

Worked lien-payoff example

A property closes for $390,000. Closing costs are $20,000. The property has a $6,000 real-property tax lien, a $250,000 first mortgage, and a $40,000 recorded judgment lien. Assume all liens are valid, the tax lien has statutory priority, and the remaining liens are paid in the order stated.

First subtract closing costs: $390,000 - $20,000 = $370,000. Pay the tax lien: $370,000 - $6,000 = $364,000. Pay the first mortgage: $364,000 - $250,000 = $114,000. Pay the judgment lien: $114,000 - $40,000 = $74,000.

The seller receives $74,000 before any other charges. The lesson is not that every closing uses this exact order; the question must state or support the applicable priority. The exam habit is to identify superior claims, then subtract each payoff once.

• Gross sale price: $390,000
• After closing costs: $370,000
• After tax lien: $364,000
• After first mortgage: $114,000
• After judgment lien: $74,000 seller remainder