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.
The two parties to a deed are the grantor and the grantee. 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 before the deed is delivered, for example, title does not transfer. A deed does not have to be recorded in order to transfer title.
The premises clause shows the date the grantor signs the deed, the names the grantor and the grantee, and shows their addresses.
The premises clause also shows the consideration given for the property. It does not have to state the entire amount of the purchase price. Usually, the wording is “…for ten dollars and other valuable consideration.”
The granting clause is the grantor’s intent to transfer the title of 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…”
The habendum clause shows what type of estate is being conveyed, whether it’s a fee simple or a life estate, etc. The language is often stated as “…to have and to hold in fee simple forever.”
The covenant of seisin is the grantor’s guarantee that he or she owns the property and has the right to convey title to the grantee.
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.
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.
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.
A street address is not an acceptable legal property description for use in a deed. The deed must contain the legal description of the property. The legal description must be detailed enough so that a surveyor can locate the property boundaries.
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.)
|Examples of delivery and acceptance|
1. A grantor mailed his signed deed on Friday. The grantor died on Saturday. The closing was scheduled for Monday. Because the deed was not delivered to the grantee before the grantor died, 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 second 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.
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.
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.
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Some of the deed clauses that are important to remember include the covenants of
Click here to see a deed labeled with various deed clauses:
The types of deeds used to transfer title to property include
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
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.
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.
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.
The most common special purpose deeds are
When a person dies, a personal representative is appointed by a will or by a court, if no will is 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.
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.
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 deed is used.
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.
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.