Define Alienation in Real Estate

"A Deep Dive for Real Estate Agents and Appraisers"

A few more things that would be good to know about alienation in real estate, especially in the context of your exams.

Types of Alienation: Alienation doesn't only happen through a sale. It can also occur through other methods like gifting, wills, or even foreclosure. Any process where the ownership of a property changes hands can be considered a form of alienation.

Alienation Clause: This is a term that often appears in mortgage contracts. An alienation clause (also known as a "due-on-sale" clause) is a provision that requires the borrower to repay the loan in full if the property is sold. The purpose of this clause is to protect the lender's interests. If the property is sold without paying off the mortgage, the new owner could potentially default on the loan, leaving the lender in a risky position.

Involuntary Alienation: Alienation can be voluntary or involuntary. Voluntary alienation is when a property owner willingly transfers their property to someone else, like in a sale or a gift. Involuntary alienation is when the property is transferred without the owner's consent. This could happen in cases of foreclosure, or when a government entity takes over private property for public use, a process called eminent domain.

Leasehold Alienation: In the context of leasehold estates, alienation can refer to the transfer of leasehold interests from one party to another. This could be done via an assignment or a sublease. It's important to note that the original lessee might still be responsible for the lease obligations, depending on the terms of the lease agreement and local laws.

Alienation vs. Deed Restrictions: Sometimes, property owners may place restrictions on how future owners can use the property. These are known as deed restrictions or restrictive covenants. These might limit certain types of alienation. For example, a deed restriction might prohibit the property from being used for commercial purposes, even if it's sold to a new owner.

Legal Requirements for Alienation: In many jurisdictions, alienation of real property must be done through a written document (like a deed) that is signed and delivered to the new owner. Often, the document also needs to be recorded with a local government office to be fully effective.

Remember, real estate laws can vary a lot by location, so it's important to familiarize yourself with the laws that apply in the area where you're planning to work as a real estate agent or appraiser.