Florida Real Estate Sales Associate Examination Content OutlineReal Estate Contracts and AgencyHard
A property owner intends to transfer ownership of their vacation home to their adult child. They want to ensure that the transfer is effective immediately but also want to include a provision that if the child ever attempts to sell the property to a non-family member, the ownership will automatically revert back to the original owner. What type of deed would best accomplish this specific transfer of ownership?
- AA general warranty deed
- BA deed with a condition subsequent
- CA special warranty deed
- DA quitclaim deed
Show answer & explanationAnswer & explanation
Correct answer: B. A deed with a condition subsequent
A deed with a condition subsequent allows the grantor to retain the right to re-enter and reclaim the property if a specific condition is violated after the transfer of ownership. This creates a defeasible estate, specifically a fee simple subject to condition subsequent.
Why the other options are wrong
- A. A general warranty deed provides the most protection to the grantee, warranting title against all defects, but does not include conditions for automatic reversion to the grantor.
- C. A special warranty deed warrants title only against defects arising during the grantor's ownership, and does not include conditions for reversion.
- D. A quitclaim deed transfers whatever interest the grantor has without any warranties, but doesn't typically include conditions that cause ownership reversion.
Deed with Condition Subsequent
A deed that conveys a fee simple estate, but includes a condition that, if violated, allows the grantor (or their heirs) the right to re-enter and reclaim the property. Ownership does not automatically revert; the grantor must take legal action.
- Creates a fee simple subject to condition subsequent.
- Condition must be clearly stated in the deed.
- Grantor retains a 'right of re-entry' or 'power of termination'.
- Grantor must take legal action to reclaim the property upon condition violation.
Memory trick: Defeasible means 'can be defeated' or taken back.