Topic 9.5: Deeds

Learning Objectives

After successfully completing this topic, you will be able to
• describe the parts of a deed and the requirements of a valid deed, and
• list and describe the four types of statutory deeds and the legal requirements for deeds.

Overview

A deed is a written instrument that transfers some type of ownership, such as fee simple, air rights, etc. The instant that title to property passes is when the deed is voluntarily delivered and voluntarily accepted. If the deed is later lost or destroyed, it will not affect the ownership of the property. If a deed has been signed but not delivered, title has not yet passed. If the grantor dies, title does not transfer. A deed does not have to be recorded in order to transfer title.

Seven Essentials of a Deed

  • Consideration (either “valuable” or “good”),
  • Execution by the grantor and two witnesses,
  • Description of the property,
  • Delivery and acceptance,
  • Interest (estate being conveyed),
  • Names of a competent grantor, and a grantee (not necessarily competent),
  • Granting and other appropriate clauses.

Consideration

A deed must state that consideration was given by the grantee to the grantor. The consideration can be good or valuable consideration. Florida does not require that the amount of consideration be shown in the wording of the deed, and many deeds have the common phrase “…for $10 and other valuable consideration.” 

The failure to acknowledge or record a deed does not make the transfer invalid, but leaves the buyer at risk of losing the property by estoppel.

Signature of the grantor and two witnesses

The grantor must sign the deed in front of two witnesses.

A competent grantor must sign the deed in the presence of two witnesses, who must also sign the document. The signature with witnesses is enough to make a valid deed. However, if the deed is to be recorded, A notary must acknowledge the signature. The grantor orally declares that the instrument is his or her act, and the notary prepares a certificate attesting to the declaration.

Description of property

A street address is not an acceptable legal property description for use in a deed. The legal description must be shown in a manner that a property surveyor would be able to locate the boundary markers.

Delivery and acceptance

Title does not pass until the deed is delivered and accepted.

Title to the property is not legally transferred until the deed has been voluntarily delivered by the grantor and accepted by the grantee. In most real estate closings, the title closing agent will physically take the signed deed from the grantor and give it to the grantee for review and acceptance. At that instant title has passed. The fact that a deed has been signed but not delivered does not transfer title. (See examples below.)

Interest or estate being conveyed (habendum clause)

The habendum clause shows what type of estate is being conveyed, whether it in fee simple or a life estate, etc. The language is often stated as “…to have and to hold in fee simple forever.” 

Examples of delivery and acceptance

1.   A person in New York sold her property to a man in Florida. The New Yorker mailed his signed deed on Friday. When the title closing agent received the deed by mail on Monday, he learned that the grantee had died on the previous day. Title was not delivered to the grantee on time, so the property title remained in the name of the grantor.
2.   When a man died, his will bequeathed his house to the local art museum. The executor located a signed deed for the same property in the safe deposit box, showing the man’s son as the grantee. Because there was no delivery and acceptance, the museum owns the house.

Names of a Competent Grantor and a Grantee

The grantor is the person who is giving title to the property to the grantee. The grantor must be legally competent (at least 18 years old and of sound mind). The grantee need not be competent. For example, a father can deed property to his minor son. Both names must be shown on the deed for the purpose of keeping the chain of title intact. If a grantor’s name is shown on the original deed as Mary Haskins and Mary has remarried in another state, the marriage certificate may need to be recorded in the local courthouse to show that it is the same person. Sometimes title agents will have a person sign a “one and the same” affidavit if the names are different.

Granting and other appropriate clauses.

The words of conveyance in the granting clause show the grantor’s intent to give title to the property to the grantee. The words typically found are “…hereby grants, bargains, and sells unto the Grantee, and Grantee’s successors, heirs, and assigns forever…”

Appurtenances

An appurtenance is anything attached to a piece of land or building in a way that makes it a part of that property, and is passed on to a new owner when the property is sold. It may be something tangible like a garage, septic system, water tank, a parking space in a condominium building, or something abstract such as an easement or right of way.

Deed restrictions 

Any restrictions on the use of the property are stated just below the habendum clause. For example, the property may be restricted against ever having a liquor store built on it.

Exceptions and reservations

A grantor may insert a reservation in a deed that gives some type of right that did not exist before. For example, if a man was selling a parcel of land on which a driveway to his house was located, a reservation mentioned in the deed would give the grantor a perpetual easement to use the driveway.

Other Deed Clauses

Some of the deed clauses that are important to remember include the covenants of
• seisin, promising that the seller owns and can legally convey title to the property.
• encumbrances, stating that no encumbrances exist that are not specifically shown in the deed.
• quiet enjoyment, meaning that the grantee can live in peace, undisturbed by others claiming to own the property.
• further assurance, obligating the grantor to act in any way necessary to protect the title.
• warranty forever, means there is no time limit or spending limit on the grantor for protecting the grantee’s title to the property.

Types of Statutory Deeds

The types of deeds used to transfer title to property include
• general warranty,
• special warranty,
• bargain and sale,
• quitclaim, and
• other special purpose deeds.

General warranty deed
Most buyers want a general warranty deed.

A general warranty deed is the most common deed. It gives the grantee the most protection available, but the guarantees are only as good as the persons who give it. A general warranty deed has additional warranties such as the warranty of
• quiet enjoyment – undisturbed by other claims of title,
• further assurance – the grantor will deliver any legal instrument to make the title good in the future,
• seisin – the grantor owns the property and has the right to convey it,
• no encumbrances – the property is conveyed free of any encumbrances not specifically mentioned in the deed, and
• warranty forever – grantor will always be responsible for defending title.

Special warranty deed

A special warranty deed is often used by large corporations and public agencies. It warrants only against the acts of the grantor meaning the grantor has not encumbered the property except for those encumbrances shown in the deed.

Bargain and sale deed

A bargain and sale deedusually has only 4 clauses – premises, granting, habendum and the warranty of seisen. No other warranties are given to the grantee, including the warranty against encumbrances.

Quitclaim deed
A quit-claim deed has no warranties.

A quit-claim deed has no warranties. It transfers whatever rights the grantor may have, if any. Quitclaim deeds are often used between family members or to clear up issues with legal descriptions. It often helps to clear clouds on the title. Sometimes a “suit for quiet title” is necessary to clear the problem. If the grantor owns the property, it transfers title as effectively as any other deed.

Special Purpose Deeds

The most common special purpose deeds are
• personal representative’s,
• guardian’s,
• committee’s, and
• tax.

Personal representative’s deed 

When a person dies, a personal representative is appointed by a will or by a court, if no will if found. If real property is included in the estate, the personal representative will transfer title to the property under the direction of the court, using a personal representative’s deed.

Guardian’s deed 

A guardian is appointed by a court to act on behalf of a minor. If property of the minor is to be transferred with court approval, the transfer of title is accomplished with the use of a guardian’s deed.

Committee’s deed 

When an owner of real property has been declared incompetent, a court will appoint a committee to act on behalf of the owner. When property is transferred to another, a committee’s deedis used.

Tax deed

A tax deed is a certificate of title issued by the clerk of the court. The deed has no warranties, meaning the buyer assumes all risk. The buyer should have a title search made before purchasing property at a tax sale.

Legal Requirements

In order to be recorded, a deed must be acknowledged (notarized) and a certificate must be given to the clerk by the buyer stating the actual amount paid for the property. The certificate is confidential.