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Inventory Management
The things that are purchased in procurement will not always be immediately used or sent to the departments that requested them. At times, the procurement team will be responsible for monitoring and maintaining the inventory that they procure for the business. The task of inventory management is one of the facets of procurement management that brings the entire process in the supply chain full circle. There’s more logistics and work that is required when inventory management is included, but it can afford the procurement team more control over their actions.
Inventory management state that it is a collection of processes and practices that intersect with procurement or supply chain management. An extended explanation is that it’s a means of optimizing the inventory of a business or procurement team to facilitate uninterrupted sales, procurement, production, and service without compromising cost. There are four primary components that are applied to inventory management. The first one is supply chain or procurement management, which is what has been discussed throughout
To build a stable inventory that inventory management can be applied to requires having an understanding of how the products being procured are used. If an item is only rarely used and/or has a short shelf life, it makes no sense to try and build up a supply of it. Likewise, an item that is constantly used but at rates that are almost too fast to keep up with won’t be something that you can regularly carry in your inventory. Just because it is something that is used doesn’t mean that it’s something that is practical to keep around for a while in mass quantities. The things that should be used to build a stable basis for your inventory should be 1) regularly used, 2) shelf stable, and 3) budget-friendly even in large amounts. Even if there’s a little bit of surplus in between orders, it’s not enough to be considered wasteful.
Transferring Property by Deed
The transfer process happens by way of deed. A property deed is a formal, legal document that transfers one person or entity’s rights of ownership to another individual or entity. The deed is the official “proof of transfer” for real estate, which can include land on its own or land that has a house or other building on it.
Every deed should contain the following information:
- An indication that it is a deed
- A description of the property involved
- The signature of the individual or entity that is transferring the property
- Data regarding who is taking title to the property
As deeds do not require much information, the document itself is often very short. However, the document may also contain additional information such as the conditions or assurances that go along with the transfer. Each deed must also be validly delivered to the individual taking ownership of the property. In most situations, it should also be filed with the appropriate authority as well.
Every real property transfer will require the use of some type of deed. It is important to use the legal description of the property for the deed so that it can be recorded accurately.
GRANTOR AND GRANTEE
The person transferring ownership is often referred to as the “grantor.” The person receiving property is the “grantee.”
What You Need to Know about Deeds and Titles
There are several types of deeds. Each type varies based on the warranties provided to the grantee. Different varieties of deeds provide varying levels of title.
Deeds help show ownership of the property. However, the deed itself is really only used for transfer of the property. The real “test” of whether you have ownership of a property is based on whether your name is on the title. When you have a title to a property, you also have various other rights that go along with property ownership, including the right to:
- access and occupy the property;
- place encumbrances on the property (i.e. mortgage);
- use the property as you wish within legal bounds; and
- transfer the property in whole or in part.
Often, titles will be in more than one person’s name. For example, if a married couple owns their home together, both of their names will often be on the title for the property. When this occurs, each spouse generally holds a one-half interest in the property. That also means that the property cannot be transferred without both spouses’ permission.
The Importance of Having Good Title in Real Property Transfers
As property is held in such high regard in the United States, having a good title is critical when you transfer property. Every time a property is transferred, it is recorded in a public way, usually with the County Recorder’s office in your area.
When a property is not recorded properly, there may be “holes” or “gaps” in the title. These deficiencies make your ownership questionable because it is unclear whether the person who received the transfer after a gap did so validly. That is, the person transferring the property may not have had the necessary ownership rights to assign it.
These concerns about titles lead to products such as title insurance, which will indemnify losses related to defects in the title to real property. Problems associated with the title become particularly relevant if there are encumbrances or debts that you are unaware of or did not agree to.
Common Types of Deeds Available
The kind of deed you can use to transfer property will depend on your title. If you know you have a valid title, for example, the deed used to transfer that property may be different than the deed you should use if you are unsure of the title’s integrity. The following is a brief list of some of the various types of deeds available to transfer property.
- General Warranty Deed
- Special Warranty Deed
- Quit Claim Deed
The deed right for your situation will obviously vary based on your title and how the property is being sold. Some deeds are more common than others, with the most common variations being the general warranty deed and the quit claim deed.
General Warranty Deed
A general warranty deed is often considered the most common way to transfer real property. It is used when you are aware and confident that the title to your property is good and marketable. It is most commonly used for residential real estate transactions. A general warranty deed is a buyer’s best protection against title challenges. The guarantee not only applies to the seller, but it applies to all of the individuals or entities involved in the chain of title for that particular property.
By providing a general warranty deed, you are also positively asserting that there are no debts or liens on the property. This concept may be confusing for some homeowners because they have a mortgage on their home. However, when you sell your property, your mortgage is often paid off with the proceeds of the sale, and may even transfer to a new property that you purchase. This is part of the covenant to convey free of encumbrances.
A general warranty deed also includes several other covenants that are built into the guarantee.
- Covenant of Seisin: This promise assures the buyer that the grantor has the right to the entire property that he or she is conveying. Generally, this applies to the quality and size of the asset transferred.
- Covenant of Quiet Enjoyment: A property owner is entitled to enjoy his or her property free of disturbances or challenges to his or her ownership. The covenant of quiet enjoyment assures the grantee that he or she will not be challenged by someone that is alleging to have a superior title or a lien on the property.
- Covenant to Defend Title: Arguably the most important covenant, the covenant to defend title includes a promise that the grantor will help the grantee if anyone does challenge the title to the property. That is, the grantor will provide a defense to all claims that contest the title and compensate the grantee for any damages or losses associated with that claim. The most common examples of a title challenge often include claims of previously unknown heirs, lenders, or lienholders, including mechanics’ lien holders and tax liens.
Obviously, there are many advantages to transferring property with a general warranty deed. If possible, buyers often strive to obtain this type of deed in their real estate transactions.
In some situations, the seller may need to create a “special warranty deed,” which provides some of the covenants, but not others. Particular circumstances dictate the use of a special warranty deed, and it is sometimes used as a compromise between the buyer and seller so that the seller still receives some warranties.
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