Deeds

Question 1

Deed

Answer 1

A document used to transfer ownership from one party to another such as in a sale, gift, or transference by will.

All 50 states under the statute of frauds require the deeds to be a written instrument used in the transfer of real property.

Question 2

Grantor

Answer 2

Using the deed as the vehicle, the person transferring the property, called the grantor transfers ownership to the person receiving the property, called the grantee.

The grantor executes or signs the deed. The grantee does NOT sign the deed.

Grantor must be of legal age to hold or transfer property; 18 years in most states. A deed executed by a minor would generally reconsidered Voidable.
Grantor must be legally competent.
If person is mentally impaired, the deed is NOT automatically VOID but rather Voidable on its face.
If a person is deemed impaired by a court of law, than the deed is automatically void. A court would need to approve transfer of property if the person is incompetent.

Question 3

Grantee

Answer 3

Grantor transfers ownership to grantee, the person receiving the property.

Question 4

Deed is a legal contract

Answer 4

It must fulfill all the requirements of a legal contract. To be valid it must contain the following:

1. Legal competency for both the grantor and grantee
2. Statement of consideration-typically a nominal value placed with the deed itself
3. A granting clause to identify the conveyance of the property
4. The Habendum clause (the quantity of interest to be granted) identifies the degree of ownership the grantee receives.
5. An accurate legal description of the property being transferred.
6. Any deed restrictions or other exceptions place on the property
7. An acknowledgement of the grantor’s signature.

Question 5

Valid contract

Answer 5

One which all elements are intact and enforceable in a court of law.

Question 6

Void Contract

Answer 6

One which is of no legal force because on ore more elements are missing from the contract.

Question 7

Voidable Contract

Answer 7

One which a contract appears to be valid on the surface but after inspection one element is defective.

Question 8

Affidavit of one and the same

Answer 8

Is a legal contract that declares that a person is the same person using a different name such as after a marriage, divorce or legal name change.

Question 9

Deed containing more than one grantee…

Answer 9

If a deed contains more than one grantee, the granting clause specifies how they are taking title to the property, be it joint tenants or tenants in common.

Question 10

Consideration Clause

Answer 10

A valid deed almost include a consideration cause stating the grantor is receiving something of value from the grantee for the transfer of ownership.
Most states require a nominal fee stated within the deed itself such as “for $10 and other food and valuable consideration.” If the property is being transferred as a gift between family members, “love and affection” may be sufficient as consideration.

Question 11

Granting Clause

Answer 11

States the grantor’s specific intentions to convey the property to the grantee.
The deed uses specific language to identify his intention:
I grantor, convey and warrant… (General warranty deed)
I grantor, remise, release, and alienate
I grantor, grant, bargain, and sale
I grantor, remise, release and quitclaim

Question 12

Acknowledgement of Deed by Notary public

Answer 12

Required by the time of conveyance.
Verifies that the person signing did so voluntarily.
The closing agent, acting as the notary public also verifies that the person signing the deed is in fact the person stated on the deed by verification of identification.

This act is NOT a legal validation of the document and does not suppose any legal information at all.

Question 13

Deed is considered passed upon delivery when…

Answer 13

1. Grantor delivers and is accepted by grantee.
2. Can be delivered personally by grantor or by third party like a title company during an insured closing.
3. The effective date of conveyance is considered the date the deed was accepted by the grantee.

Question 14

Types of Deeds

Answer 14

1. General warranty deeds
2. Special warranty deeds
3. Bargain and sale deeds
4. Quitclaim deeds
5. Deeds of trust
6. Trustee’s deeds
7. Reconveyance deeds
8. Deeds executed pursuant to a court order

Question 15

1. General Warranty

Answer 15

Often called just warranty deed, is the most common. used to convey property from the grantor to grantee.
It affords the most protection to the buyer due to the covenants (contractual agreements), promises and warranties given by the seller.

Question 16

Covenants stated in a General Warranty

May vary state by state but generally state the following:

Answer 16

1. Covenants (a contract) of Seisin: the Grantor warrants that they own the property and have the legal rights to convey it.
2. Covenant against Encumbrances: The grantor warrants that the property is free of any liens or encumbrances unless they’re specifically stated in the deed.
3. Covenant of Quiet Enjoyment: The grantee is guaranteed that the title will be good against third parties attempting to establish title to the property.
4. Covenant of Further Assurance: Grantor promises to make the title good and will deliver any documents or instrument necessary.
5. Covenant of Warranty Forever: The grantor promises these warranties to never expire and compensates the grantee for any losses sustained in the future.

Question 17

General warranty regarding its covenants or warranties

Answer 17

This general warranty deed do not just cover the period of ownership of this grantor; they EXTEND BACK to the origin of the property.

EACH grantor that held the general warranty deed will defend the title against any defects created by the grantor as well as those previously holding title to the property.

Question 18

2. Special Warranty Deed: second type of deed

Answer 18

Here the seller’s guarantee DOES NOT cover the entire property history.

Generally, the seller only guarantees against problems or claims created during the seller’s ownership of the property.

This is often used with property seized in foreclosure situation where the history prior to the current owner is unsure or questionable.

The assumed method of conveyance is the granting clause that states “I grantor remise, release and alienate…”

It only conveys 2 covenants (unlike general warranty deed which has all 5 covenants)

1. Grantor has received the title
2. During the ownership of the grantor, they did not allow the property to become encumbered except otherwise noted specifically within the deed.

Question 19

3. Bargain and Sale Deed

Answer 19

Used in residential real estate or sales of court seized properties.
It does not guarantee but rather implies to the buyer that the seller owns the property free and clear.

Bargain and sale deed resembles a quit claim deed BUT the property is Sold rather that relinquished (voluntarily give it up).

Common granting clause statementL
I grantor grant , bargain and sale…”

It is permissible to add covenants or warranties to a bargain or sale deed. A covenant against encumbrances could be added creating a bargain and sale with covenants against encumbrances.

Question 20

4. Quit Claim Deed

Answer 20

Is used to transfer an interest, whatever that may be, from one individual to another.

This type of deed differs in all others in that it does not give any covenants, warranties, guarantees or assurances with the transfer of ownership to the new owner.

Granting clause statement:
“I grantor remise, release and quitclaim…”

Quit not Quick…
“I quit my rights to the property” is the reference here.
It is however executed quickly.

A quit claim deed can convey a god title as long as the grantor holds good title at the time of the issuance of the quitclaim deed.

sometimes Quick transfers of property is needed without the assurances other deeds like general warranty or special warranty give. As in a divorce; adding a new wife, Parents used it to deed a house to their children and estate planner use it to transfer property into a trust or to an heir.

Question 21

Cloud on the Title

Answer 21

Quit claim deed can be used during regular real estate transactions for a quick fix to cure a “cloud on a title.”

This refers to any mistakes, misspellings or irregularities in the chain of title that would give a reasonable person pause before accepting title.

A cloud on a title reduces the value of the property because any prospective buyer knows they are buying the risk the grantor may not be able to convey good title.

Question 22

5. Deed of/in Trust

Answer 22

Used to transfer property from the truster into a trust controlled by a trustee for the benefit of the beneficiary.

Question 23

6. Reconveyance Deed

Answer 23

Used by a trustee to return the property to the original owner.

When the last payment is made to satisfy the outstanding loan on a property, the reconveyance deed is used to transfer the property to the trustor.

Question 24

7. Trustee’s Deed

Answer 24

A deed executed by the trustee to convey the property to any person other than the truster.
The deed must include a statement that his actions are authorized under the guidance of the trust,