How do deeds relate to owning title to property?
Deeds and real property title interests are closely related, but they are not the same thing. Title is a legal term to describe ownership of the property, but it is not an actual document. A deed is the document you use to sign over title ownership to someone else. A deed is the paper you put into the public record as evidence of owning title to your home. The person granting the ownership right or interest is the grantor, and the person receiving it is the grantee.
What goes into a deed?
Because a deed serves as official evidence of ownership, it is subject to three fundamental requirements to be legally valid and enforceable:
- The grantor must have the legal right to transfer the property, and the grantee must be legally able to receive it.
- The deed must state that it is a deed and describe with sufficient clarity and detail what it is transferring.
- The grantor must sign the deed in front of witnesses before delivering the deed to the grantee.
What kinds of deeds are used with real property?
The nature of a real property deed depends on the interest, right, or property being transferred. Below, we take a closer look at some common deed types, including Warranty Deeds, Special Warranty Deeds, Quitclaim Deeds, Bargain and Sale Deeds, and Grant Deeds.
What does a Warranty Deed protect?
When you buy a new product, it often comes with a written guarantee – a warranty – that if it breaks down within a certain period the manufacturer or seller will fix or replace it. A Warranty Deed performs the same basic purpose for a home title transfer: The grantor of the Warranty Deed is making guarantees to the grantee about the property, including that the grantor owns clear title and has the right to transfer it.
Deeds often refer to these grantor guarantees as covenants, which is a legal term for an enforceable promise. Common grantor Warranty Deed promises come in two main types:
- Present covenants: These are promises that the grantor makes at the time of transfer. They include promises that the grantor has legal title ownership and right to convey it, that the grantor has not already promised to transfer the property to someone else, and that the property is not subject to any undisclosed liens or other encumbrances.
- Future covenants: After the grantee takes possession of the property, the deed’s future covenants are the grantor’s warranties to protect the grantee against post-transfer problems. These might include a third party claiming to have a superior title to the property than the one the grantor had, or a defect in the title.
A Warranty deed is may be called a General Warranty Deed if the grantor’s promises of clear title cover the entire history of the property’s ownership. When the time covered by that promise is limited, typically a Special Warranty Deed is used.
What does a Special Warranty Deed protect?
Like the General Warranty Deed, the Special Warranty Deed has present and future covenants that guarantee the grantor’s clear title to the property and right to transfer it and obligate the grantor to defend the grantee’s title after the transfer.
The key difference between a General Warranty Deed and a Special Warranty Deed is that the Special Warranty Deed is more time-restricted in its clear title guarantee. Unlike a General Warranty Deed, in which the grantor promises to the grantee that the grantor’s title to the property is clear going all the way back in time to the original deed, in a Special Warranty Deed the grantor only promises clear title against claims that arise after the grantor acquired title.
Thus, it is possible that if the grantor of a Special Warranty Deed possessed a defective or disputed title interest, and that defect or dispute became apparent to the Special Warranty Deed grantee after the transfer, the grantor would have no obligation to help the grantee fix the defect or resolve the dispute.
Is it safe to transfer property with a Quitclaim Deed?
The basic purpose of a deed is to transfer title ownership interest in real property to another, but a Quitclaim Deed does not transfer an interest from the grantor to a grantee. Rather, it reflects the grantor’s renouncing a claimed title interest in the property.
Since a Quitclaim Deed does not transfer a title interest and only relinquishes a claimed interest, using a Quitclaim Deed to transfer property can carry risks to the grantee. For example, if a grantor’s relinquished claim of title is not valid, and the Quitclaim Deed grantor is under no obligation to help the grantee if a challenge is brought. If you acquire property through a Quitclaim Deed and someone else challenges your title to the property later, the Quitclaim Deed may not be worth the paper it is written on.
Quitclaim Deeds are commonly used in dispute resolutions. For example, if two people are disputing ownership of a property, a settlement agreement could have one of those parties deliver a Quitclaim Deed to the other, relinquishing that person’s title claim and leaving the other with clear title. Or, if a married couple owns a home through joint tenancy but one spouse leaves in a divorce, the departing spouse might execute a Quitclaim Deed as part of a Divorce Settlement Agreement.
When might I want a Bargain and Sale Deed?
Unlike General Warranty Deeds and Special Warranty Deeds, in which the grantor guarantees clear title to the property going back at least to when the grantor acquired it, a Bargain and Sale Deed does not guarantee that the grantor has clear title. Bargain and Sale Deeds are uncommon in ordinary sales of real property, especially residential homes. You are more likely to encounter one if you are purchasing a home through foreclosure. The grantor in this case may often be a city, county, or bank.
A Bargain and Sale Deed is like a Quitclaim Deed in that both deeds can conceivably transfer a claimed title that does not actually exist or that may be subject to challenge. The difference between the two is that in a Bargain and Sale Deed the grantor is selling the property, whereas a Quitclaim Deed does not involve a property sale but instead relinquishes the grantor’s claimed title interest in the property.
The important thing to remember about Bargain and Sale Deeds is that if the grantee encounters title-related problems with the property after acquiring title, then the grantor has no obligation to help solve the problem.
How does a Grant Deed differ from other deeds?
You can think of a Grant Deed as a pared-down version of a Warranty Deed or a Special Warranty Deed. Like these other deed forms, in a Grant Deed the grantor guarantees to have clear title to the property and promises not to have sold the property to anyone other than the grantee. What a Grant Deed does not promise, however, is that the grantor will defend the grantee’s title interest in the property if post-transfer problems arise.
Common uses for Grant Deeds are real property sales that do not use mortgage financing, and when transferring property as a gift or to a trust or business.
Can I make my own Grant Deed?
Yes, you can make your own Grant Deed. A lawyer is not required to prepare a valid and enforceable deed. If your deed meets the requirements in the state where the property is located, it is considered legal evidence of the transfer of title.
A Grant Deed requires the same basic information as any other deed, like the names of the grantor and the grantee, and a description of the property the grantor is transferring. In addition, Grant Deeds are required to provide the dated and witnessed signature of the grantor as well as at least the grantor’s guarantee of clear title and the right to transfer it.
If you have more questions about preparing a deed, or proving your ownership rights to a property, reach out to a Rocket Lawyer network attorney for affordable legal advice. If you need tax help, Rocket Lawyer can now match you with a tax pro for affordable and convenient tax filing services. Don't do your taxes™ – Let us do them for you.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.