DEEDS Flashcards
DEED
A written evidence of ownership of real property.
- When property is sold or otherwise transferred between owners, a new deed that memorializes this transaction is then created.
- Deeds are only valid if they are submitted to the recorder of deeds for your county.
WARRANTY DEEDS
Are utilized when transferring ownership of real property from a grantor to a grantee.
GENERAL WARRANTY DEEDS
The deed includes a guarantee from the grantor (Seller) that they hold the title free and clear without any encumbrances on the property. This provides the (Buyer) the assurance that they can take ownership of the property without any parties making claims to it.
SPECIAL WARRANTY DEEDS
Offer fewer protections than the general warranty deeds. They only offer two protections: the grantor warrants that they have received the title to the property, and that the grantor did not add any title defects to the property while they owned it.
- Generally, when real property is placed into a revocable living trust, it is conveyed through a special warranty deed.
QUITCLAIM DEED
Offers the least amount of protection to the grantee. When property is being transferred through a quitclaim deed, there are no guarantees. The only thing being given is the grantor’s claim to that property.
Quitclaim deeds are often utilized when one spouse wants to add another spouse to the title of property they owned before their marriage.
For example, if Barbara owned property before getting married to Ben, she may decide to put half of the property in Ben’s name. Utilizing a quitclaim deed, Barbara “quits” half her claim to the property, splitting ownership equally between herself and Ben.
DISCLAIMER DEED ON A HOUSE IN A DIVORCE IN ARIZONA
A person who signs a disclaimer deed waives a community ownership interest in a home in Arizona. The parole evidence rule in Arizona holds that a spouse cannot present evidence, such as testimony that there was a reason the disclaimer was signed other than an intention to waive community ownership of the home (i.e., because one spouse could not qualify for the mortgage on the home), to dispute the plain language of the disclaimer deed. The same is true for a spouse who signs a quitclaim deed.
The spouse who signed the disclaimer deed, however, still has a claim for a community lien on the home, which may arguably include the down payment on the home if that down payment was made with community funds. In some cases, the community lien may constitute all or a large majority of the equity in the home which may lessen the financial impact on a spouse who waived a community interest in the ownership of the home by signing a disclaimer deed.
DISCLAIMER DEED
Married. A spouse signs away their interest and right to the property being purchased.
DISCLAIMER DEED AFTER DEATH OF SPOUSE
Probate is different than divorce.
• In a divorce the husband would probably not be entitled to the house because it is separate property unless he could prove other factors that might entitle him to some of the house such as the source of the funds or other financial considerations.
• Probate is Different.
o Where there is a will. If there was a Will, that would control what happened to the estate (and the house). The wife could leave the house to whomever she wanted, but the husband might be entitled to a certain percentage of her estate as you cannot totally disinherit your spouse.
o Where there is no Will, probate is guided by intestate rules. In short, the husband receives half of any community property and all of his spouses separate property. This true unless the wife had children from another relationship. In that case the husband gets half and the step children get the other half.
Is There a Solution? Yes. The best alternative is when the spouse’s credit is repaired to ask the bank to add the spouse to the title and mortgage. In some cases, with appropriate counsel, a quit claim deed putting the spouse on the title may be appropriate. A review of the mortgage or deed of trust would be in order to do this properly.
DEED OF TRUST
A Deed of Trust is essentially an agreement between a lender and a borrower to give the property to a neutral third party who will serve as a trustee. The trustee holds the property until the borrower pays off the debt.
The deed of trust is what secures the promissory note.
Is used when there is a security interest on the property. A lender holding a mortgage on the property uses this type of deed to indicate the interest that they have in the property in the event that the person borrowing the money fails to pay the mortgage as directed.
BENEFICIARY DEED
This type of deed can be utilized in order to avoid probate when property is owned by joint tenants with rights of survivorship and both joint tenants pass away.
For example, if Barbara and Ben die in a car accident, neither would utilize their right of survivorship and the house would have to pass through probate. However, a beneficiary deed would take effect in this situation., by stating that when both Ben and Barbara die, the property would go to their son, Charles.
WHEN WILL A BENEFICIARY DEED NOT WORK?
Beneficiary Deeds can be problematic if the owners of the property own their interests as joint tenants with right of survivorship or community property with right of survivorship. If both owners execute an Arizona Beneficiary Deed naming one or more grantees and the last owner to die does not revoke the Beneficiary Deed, then the property will transfer to the grantees listed in the Beneficiary Deed. However, if only one owner executes a Beneficiary Deed, then it may or may not be effective depending on which owner dies first. Because of the “right of survivorship” ownership, if the owner who executed the deed dies, his interest goes to the other joint owner – not the grantees listed on the Beneficiary Deed. On the other hand, if the owner who executed the Beneficiary Deed was the last to die, the grantees listed in the Beneficiary Deed would take title to the property.
