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Deed and Property Ownership FAQ
- What is a deed, and what are the main types?
- A deed is a legal document used to transfer ownership of real property. There are four main types:
- General Warranty Deed:Offers the most protection, guaranteeing the grantor has clear title and will defend against any claims.
- Special Warranty Deed:Only guarantees the grantor did not impair the title while they owned it.
- Bargain & Sale Deed:Offers no express warranties but implies the grantor has some interest in the property.
- Quitclaim Deed:Offers no guarantees or warranties, simply transferring whatever interest the grantor has, if any.
- What are some special types of deeds and how are they used?
- Several special deeds are used for specific circumstances:
- Corrective Deed:Used to fix errors in a previously recorded deed.
- Sheriff’s Deed:Given to the winning bidder at a sheriff’s auction, usually after a foreclosure.
- Referee’s Deed:Given to the winning bidder at a mortgage foreclosure sale.
- Trustee’s Deed:Given to the winning bidder at a deed of trust foreclosure sale.
- Treasurer’s Deed:Given to a purchaser of a property tax lien.
- Deed in Trust:Given to a trustee who holds title as part of a trust agreement.
- Personal Representative’s Deed:Given by the executor or representative of an estate.
- What essential elements must a deed contain to be valid?
- A deed must have the following elements to be valid:
- Be in writing:As required by the statute of frauds.
- Identify Parties:It must clearly state the grantor (seller) and the grantee (buyer). The grantor must be of legal age, sound mind, and have the right to transfer the deed.
- Include Consideration:It should state that the grantor received something of value, even if it’s a nominal amount like “$10 and other valuable consideration.”
- Provide a Legal Description:The description must precisely define the property, often through lot and block numbers, government surveys, or metes and bounds.
- Words of Conveyance:Specific language like “grants, conveys, and warrants” that indicates the type of transfer.
- Estate Granted:This specifies the type of ownership being transferred (fee simple, life estate, etc.).
- Exceptions and Restrictions:Details any existing mortgages, liens, or restrictive covenants.
- Signature of the Grantor:The grantor must sign, with corporations and limited liability companies often requiring an officer’s signature. Powers of Attorney may be used if the grantor is not available.
- Acknowledgement:The deed must be notarized to verify the grantor’s identity and voluntary signature.
- How can a grantee take title, and what are some common types of ownership?
- Grantees can take title in different ways:
- Sole Ownership:Also known as “ownership in severalty” where one individual owns the property.
- Joint Ownership:Multiple individuals can share ownership, potentially with different percentage splits.
- Corporate Ownership:A corporation can hold title, often specifying its state of formation.
- Trusts:A trustee or the trust itself can hold title, as specified in a trust agreement.
- Partnerships:A partnership entity can take title.
- Marital Status:A grantee’s marital status might be listed due to community property laws.
- What is the difference between ‘delivery’ and ‘recording’ of a deed?
- Deliveryrefers to the transfer of the deed from the grantor to the grantee with the intent to pass title. For title to pass, the grantee or their agent must accept the deed. Recording involves submitting the original deed to the local county courthouse or recorder’s office to be copied and kept in the public record. In many states, recording creates a presumption that the deed was accepted by the grantee.
- What does recording a deed accomplish and why is it important?
- Recording a deed is a formal process that gives constructive noticeto the public about the transfer of title. It establishes a clear record of ownership and helps resolve disputes over property rights. It also allows others to search the records to verify ownership before engaging in a property transaction.
- What are ‘recording statutes’ and how do they affect property ownership?
- Recording statutes are state laws that determine who prevails in ownership disputes. Most states follow a race-noticerule where the first person to record a deed has priority over subsequent purchasers, provided they are bona fide purchasers. To be a bona fide purchaser one must:
- Receive title in good faith. *Pay value for the title, and
- Have no notice of a prior transfer
- What is the impact of failing to record a deed or mortgage?
Failing to record a deed or mortgage can lead to serious consequences. As illustrated by the examples given, unrecorded claims can be superseded by later recorded ones by bonafide purchasers. For instance, a lender with an unrecorded mortgage could lose priority to a later lender who records their mortgage first. Similarly, a purchaser who neglects to record their deed may lose the property to a subsequent buyer from the same seller who does record their deed. This highlights the need to record documents promptly to secure a claim of ownership.
