E. Types of Deeds

Transfer

E. TYPES OF DEEDS.

When properly executed, delivered and accepted, all deeds serve the same basic function. They convey the grantor’s interest in the property. Differences are to be found in the extent of title protection the grantor promises. The types of deeds most often used include the following:

1. WARRANTY DEEDS.

A warranty deed guarantees good title to the property (not the physical condition of it). This protection is assured by expressed or implied covenants. The grantee is also protected by the doctrine of after acquired title. This principle provides that the grantee will obtain the title even if the grantor does not actually possess title at the time of the conveyance, but acquires it later. Depending on the extent of the protection, warranty deeds are either general or special.

Guardian's Deed Types of Deeds Sheriff's Deed Executor's Deed Tax Deed Warranty Deed Deed In Partition Court Ordered Deed

Special Purpose Deed

Deed Executed by Gift Deed Court Appointed Representative Deed of Trust Guardian's Deed Quit Claim Deed Trustee's Deed Executor's Deed Grant Deed Deed in Trust Admin's Deed Bargain & Sale Deed of Deed Reformation

Figure 4-7 • Types of Deeds

a. General warranty deed.

This offers the most comprehensive title protection of any deed. The five covenants of warranty apply not only to title defects arising during the grantor’s period of ownership but also to those occurring before. The grantor is promising to guarantee the title “forever” and that word in the granting clause identifies it as a general warranty deed.

b. Special warranty deed (Limited warranty deed).

This protects the grantee’s title under the same covenants as found in the general warranty deed, except for the warranty “forever.” As expressed in the covenant against grantor’s acts, it only protects against defects arising while the grantor owned the property. This type of deed is often found when the grantor is a corporation, a court-appointed person such as a guardian or trustee or when the property being conveyed was acquired at a foreclosure sale.

2. GRANT DEED.

Similar to a special warranty deed and customarily used in some states, the grant deed protects the grantee with only two covenants. The grantor promises that he/she owns the property and has a right to convey it (covenant of seisen). There is also a promise that no encumbrances exist except as noted (covenant against encumbrances). In some states the covenant of quiet enjoyment might also be implied. The doctrine of after-acquired title also applies to grant deeds.

3. BARGAIN AND SALE DEED.

This deed promises that title to the property is being conveyed but contains no warranties about the condition of title, either expressed or implied. The grantee has no recourse against the grantor if a title defect later arises. However, the doctrine of after-acquired title usually applies.

4. QUITCLAIM DEED.

When properly executed, this deed conveys any interest in the property that the grantor might have. It does not contain any promises or warranties of title and, in fact, it does not even promise that the grantor has any interest to convey. Therefore, the doctrine of after-acquired title does not apply. The quitclaim deed is not inferior to other deeds in what it actually conveys; if the grantor has no interest in the property, it might convey nothing. However, the quitclaim is often used to remove a cloud on a title. For example, a title search might reveal that a wife has failed to release her dower interest by joining her husband in signing a deed. By having her sign a quitclaim deed to the interest, the cloud is removed.

F. SPECIAL PURPOSE DEEDS.

Another way of categorizing deeds is by the purpose that is served, regardless of whether it is a warranty deed, quitclaim, or other. (See Figure 4-7.)

1. GIFT DEED.

A conveyance “for love and affection” (without valuable consideration). A quitclaim deed is often used for this purpose.

2. DEED OF TRUST (TRUST DEED).

Used in some states in place of a mortgage lien. When a loan is made, the borrower deeds the property to a trustee, who holds the title as security until the loan is repaid. When the loan is satisfied, the trustee signs a deed of reconveyance, returning title to the borrower. If the borrower defaults on payment, the trustee can hold a foreclosure sale and remit the proceeds to the lender.

3. DEED OF REFORMATION (CORRECTION DEED).

Specifically used for correcting a mistake in another deed. For example, a deed of reformation is used for a misspelled name or typo in the legal description.

4. COURT ORDERED DEEDS.

Used when an officer of the court is directed to convey title. For example, a sheriff’s deed (also called a deed in foreclosure) is used to convey title after a sale to satisfy a mortgage, judgment or tax lien. In the latter case the term tax deed might be used. A deed in partition is used when a sale results from tenants-in-common or joint tenants requesting partition.

5. DEEDS EXECUTED BY COURT APPOINTED REPRESENTATIVES.

A guardian’s deed is one executed by someone’s acting on behalf of another person who is not legally competent. An executor’s deed conveys property of someone who dies leaving a will. An administrator’s deed is executed to convey property for someone who dies intestate. In many cases, the quitclaim deed form will be used for these purposes.

III. TITLE PROTECTION

Title, as we have discussed, is the right to or ownership of land and it is also the evidence of that ownership as shown by the public records. If there are defects in the title that might limit the rights of ownership, nothing in the process of transferring title clears up those defects. While some encumbrances may be specifically noted in the deed, others are not. This is the reason for a process called title examination, a process usually undertaken by someone professionally skilled in title searches.

A. CONSTRUCTIVE NOTICE/ACTUAL NOTICE.

Title is the evidence of ownership, as shown by the public records. If a title is unsound because of defects which prevent the owner from enjoying full legal rights of ownership, those defects are passed along by deed to the next person acquiring the property, unless the title is cleared prior to the