Law Tips: Things Every Lawyer Needs to Know About Real Estate Law, Part 1

Ownership transfers, types of tenancy, title insurance, liens, zoning and probate….only a few of the real estate law areas where clients require dependable advice from their family law attorney.  During ICLEF’s Annual Family Law Institute, Evansville real estate attorney, Krista Lockyear, provided her expert advice on “Things Every Lawyer Needs to Know About Real Estate.”  I am grateful that she is willing for me to bring our Law Tips readers a taste of her specialized knowledge.  For instance, Krista’s important reminders about liens and warranties of title are as follows:

Liens in Divorce Decrees

The exact wording of divorce decrees is closely scrutinized by title insurers.  When one spouse is ordered by the terms of a divorce decree to make cash payment or payments to the other spouse, such payments may become a lien immediately if that same decree awards title to real estate to the spouse who also owes payments.  This can be even more problematic if payments are payable over time, as to eliminate the lien would require pre-payment of amounts due to an ex-spouse.  This can provide unforeseen consequences such as an inability to refinance because a title insurance company is not likely to be willing to put the new mortgage in first priority position over the divorce payments. This can be resolved by lien release after payment is made, or lien release language in a Quit Claim Deed, as the case may be.  If payments are to be made over time, another remedy to this situation is to specifically provide in the decree that while payments remain a personal obligation, the debt shall not attach as a lien to the real estate.

Warranties of Title

A General Warranty Deed grants certain warranties of title from the grantor in favor of the grantee. These warranties are typically “tacked” to create a chain of warranties down the line of title.  A Quit Claim Deed breaks this chain of warranties because once a grantee takes title by quit claim only, they have no privity with any party in the chain of warranties.  Accordingly, Quit Claim Deeds should be used very cautiously.  A divorce is perhaps the most common time when it is appropriate to allow a Quit Claim Deed to serve as the conveyance document, because the other party is already on title and privy to the chain of warranties.  Of course, another appropriate situation for a Quit Claim Deed is where title is not securely vested in the grantor or may be questionable, in which case the chain of warranties may not exist in the first place.

I hope these reminders of potential real estate issues served you well.  Continuing Ms. Lockyear’s counsel, you’ll want to return to Law Tips next week when her pointers delve into other relevant areas, such as deeds, title insurance and zoning.

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About our Law Tips participants:
Krista B. Lockyear is a partner in the Corporate Department at Rudolph, Fine, Porter & Johnson, LLP, Evansville, Indiana.  Her areas of practice include real estate law, zoning and land use, environmental law, title insurance, probate and estate planning, guardianships and business law.  She serves a president of Lockyear Title, LLC; is a member of the Indiana Land Title Association, the Evansville Women’s Council of Realtors and the Volunteer Lawyer Program.  As well as contributing her expertise as a member of the ICLEF faculty, Krista is involved with her local and state bar associations

About our Law Tips blogger:
Nancy HurleyLaw Tips blogger, has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page.  Also, you are encouraged to comment below or email Nancy.  She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you onLaw Tips.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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