What is a deed? A deed is a signed, legal instrument in writing that is used to grant a right, such as the right to own real estate. Deeds are instruments which require the signatures of originator, such as a mortgage lender or a grantor, a seller and must be notarized.There are many different types of deeds that vary according to what the grantor can convey, what the grantor wants to convey, and what warranties that grantor can or wants to include in the deed. The most common types of deeds are as follows: general warranty deeds, special warranty deeds, quitclaim deeds, deeds of trust, deeds held by trusts, reconveyance deeds, trustee’s deeds, administrator deeds, executor deeds, master deeds, sheriffs deeds, and deeds with limited or no warranties.
The first type of deed to go over is the general warranty deed. This deed provides the greatest conveyance and protection to the grantee, or the buyer of real estate because it includes warranties or covenants that the grantor or seller conveys with the title. General warranty deeds must include specific wording that make a deed a general warranty deed, such as it must convey warranties. Most of these warranties cover the warranty of good title and one covenant covers encumbrances. The explanation of specific warranties of title then comes into play here. The covenant of seisin is where the grantor or seller warrants the title that is being conveyed to the grantee or buyer. If the title proves to be defective, the grantee can sue for damages. The covenant of quiet enjoyment is when the grantor guarantees that the title is superior to any other claims made or brought forth by third parties. For instance, if an individual succeeds in establishing a superior claim, then the grantor or seller will be liable to the grantee or buyer for the specified damage listed in the superior claim. The covenant of warranty is the one hundred percent guarantee that the title will always be good, and that the grantor will compensate the grantee if it is later found that the title is defective in any way. If the title defect is something that the grantor may cure then the covenant of further assurance steps in which requires that the grantor do whatever is necessary to clear the title. However, if the grantor’s spouse had dower or curtsey rights to the real estate, (Dower refers to the portion to which a surviving wife is entitled, while curtsy refers to what a man may claim) but did not sign the deed, then the grantor may obtain a quitclaim deed to clear the title. The covenant against encumbrances is the only warranty that does not cover the title in some way, but guarantees that the only encumbrances to the land, such as mortgages, mechanics’ liens, or easements, are those that are listed in the deed. At a latter point in time if there is a finding that would cloud the title, then the seller or grantor would be held liable to have whatever the encumbrance is to be removed.
A special warranty deed guarantees a bit less than the general warranty deed. For example the grantor or seller receives the title and there were no liens other than what was listed in the deed while the grantor held the title. Special warranty deeds usually are conveyed with the phrase that the Grantor remises, releases, alienates, and conveys. There is no guarantee against title defects that may have been present when the grantor received the property, and it does not require that the grantor do anything further once the title is transferred. Special warranty deeds are frequently used by temporary holders of real estate, such as trusts and corporations, who do not use or occupy the land for their own benefit. More often than not, special warranty deeds are issued when the real estate is sold in a tax sale.
The quitclaim deed carries no warranties at all, and the only purpose of a quitclaim deed is that the interest that a grantor had in the property no matter what it was releases them from liability. The real estate interest may be full title, but the grantor makes no guarantees of it. The quitclaim deed is used in those cases where the grantor does not want to assume further liability, or feels no need to guarantee the title. Quitclaim deeds are additionally used to cure a minor title defect, such as incorrect marital names that may have been misspelled on the deed, and if the sellers title is clouded.
The next topic of discussion is the Deed of Trust, Reconveyance Deed, and Trustee’s Deed. Since property can be conveyed through a trust, there are 3 different types of deeds associated with trusts, depending on the grantor and grantee. The trustor is the creator of the trust, the beneficiary is the party benefiting from the trust, and the trustee holds and administers the trust for the trustor. A deed of trust is a deed that conveys title from a trustor to the trustee for the benefit of the beneficiary. A deed of trust is often used in lieu of a mortgage, when the borrower, the trustor, transfers the deed to a trustee as security for the loan given by the lender. A reconveyance deed is a deed conveying title from the trustee back to the trustor, such as when the trustor pays off the loan that was secured by the real estate. A trustee’s deed is a deed conveying title to another party who is not the trustor. In most cases, this would be the beneficiary. The deed must state that the deed was executed according to the terms of the trust.
There are additionally different types of deeds that exist, which are executed per court order. These include deeds by administrators and executors, sheriff’s deeds, and other types of deeds that are executed without the consent of the owner or through a will. Court ordered deeds list the market value of the real estate property as consideration.