Property deeds are legal documents that you can use in real estate to transfer real property ownership from a seller (grantor) to a buyer (grantee). Real property can be land or anything attached to it, such as roads and buildings. A property deed can be legally operative if it has the identification of the grantee and grantor as well as enough description of the property.
You should note that a deed falls in different categories including quitclaim, warranty, and special purpose. There are several things you should know about property deeds before you decide to have one. This article discusses everything you should know about a property deed.
A property deed explained
As explained earlier, a property deed refers to a written and signed legal document that is utilized to transfer the real property ownership from the grantor to the grantee. In the past, real property used to be transferred by using a ceremonial act called livery of seisin. In such a case, the individual transferring the real property handed a turf or twig from the land to the individual taking possession of the land. A written or verbal statement usually accompanied the process, but the livery of seisin was the one that legally transferred the property’s title.
Today, the title to real property can be conveyed by a paper deed. A deed can either be official, meaning that they can be executed due to legal or court ruling or private, meaning that they can be executed through a deal agreed between businesses or individuals.
Each state usually has its requirements, but most deeds need to have a couple of essential elements for it to be legally binding. One of the elements is that a deed needs to be in writing. Most deeds come in printed forms, though there is no standard form that can be used. You just need to include the necessary elements.
The grantor should also have the legal ability to transfer the real estate while the grantee needs to be able to receive the grant of the property. Ideally, an individual who is competent enough to make a valid contract is regarded as competent to be a grantor.
Also, the grantee and grantor need to be identified to make sure that they are ascertainable. The property should be adequately described and operative words of conveyance have to be present.
Other elements worth considering include the deed needs to be signed by either the grantor or grantors, especially if several people own the property. And, the deed needs to be delivered to the grantee who must accept it. Remember that a deed can usually be accepted by the grantee, but they can sometimes reject delivery of the deed.
Types of deeds
Deeds are often classified in various ways. In most cases, a deed can be classified as private or official. An official deed is executed after a legal or court proceedings. But most property transactions tend to involve a business entity or individual using a private deed.
A deed can also be categorized based on the kind of title warranties offered by the grantor. A general warranty deed is a type of deed that gives the grantee the most protection. This type of deed allows the grantor to make some legally binding promises which are called covenants to the grantee. The promises focus on protecting the grantee from any prior demands and claims of any person when it comes to the conveyed land.
Some of the covenants for title include the covenant of seisin which means that the grantor warrants that the property is theirs and has the legal right to convey it. There is also the covenant against encumbrances that says that the grantor agrees that the property is free of encumbrances or liens.
With a special warranty deed, the grantors of special warranty deeds warrant that they received the property’s title and that they didn’t do anything while the title was in their hands to create a defect. In such cases, only defects that came during the ownership of the property by the grantor are warranted. Because of this limitation, the special warranty gives the buyer less protection than what the general warranty deed offers. Most buyers of real property prefer to have a general warranty deed so that they can be protected from problems that can arise in the long run.
The quitclaim deed which is also known as a non-warranty deed also gives the grantee less protection. Take note that this type of deed can convey any interest the grantor has in the real property. This means that there are no promises or warranties associated with the quality of the title. If the grantor has a great title, then the quitclaim deed can be effective just like a general warranty deed. But if the title has some defects, then the grantee cannot have any legal recourse against the seller. A quitclaim deed is usually used if the seller is unsure of the status of the title or the grantor just wants to have no liability on the title covenants.
Lastly, there is a special purpose deed that is often used in relation to court proceedings. It can also be used when the deed is from an individual acting in their official capacity. And, most special purpose deeds give little or no protection to the buyer.
There are many types of special purpose deeds, and one of them is called the administrator’s deed. An administrator deed can be used when an individual dies without a will. A court-appointed administrator can dispose of the assets of the deceased and use an administrator’s deed to convey the real property’s title to the grantee.
Another type of special purpose deed is known as the executor’s deed. With this type of deed, it can be used when an individual dies without a will. In such cases, the estate’s executor can dispose of the assets of the deceased and use the executor’s deed to convey the real property or the title to the buyer.
In conclusion, the transfer of the title of a property can be made by a deed. There are some necessary elements that need to be included in the deed so that it can be legally binding. Different deeds offer different levels of protection to the buyer and the obligations of the seller are usually determined by the type of the deed.