A deed is a type of legal document that is used to transfer ownership rights in a home or other piece of property from the current owner to a new one. Although there are many different types of deeds, each of which has its own requirements, the majority of deeds generally include the following elements:
- A description identifying the property being transferred;
- The names of the parties who are taking part in the deed transaction (i.e., the grantor and the grantee); and
- The signature of the party who is transferring the deed (note that the signature must be notarized by a notary public).
The most common reasons that a deed may be used is to either transfer ownership during the purchase or sale of a home, or when a person inherits property from one of their family members. Deeds can also be used to transfer gifts, trust contents, and certain rights (e.g., a sheriff’s deed or tax deed).
Lastly, if you receive a property deed, it is very important that you remember to record it with the local county recorder’s department where the property is located. Failing to record your deed can lead to serious consequences, which will be discussed in further detail below.
What Does it Mean to Record a Deed?
As discussed above, when a person receives a deed, it is crucial that they file (i.e., “record”) it with their local county recorder’s office in which the property is located. While recording a deed is not required by law, failing to record a deed comes with many consequences.
For instance, if a buyer does not record the deed to their new house, then it will be very difficult for them to prove they are the true owner. A person who cannot prove true ownership over their property will face many challenges, such as not being able to sell their property and losing the ability to refinance their mortgage.
Additionally, recordation is necessary in order for a deed to be valid. This puts everyone else on notice that the deed holder not only owns, but is also the rightful owner of that particular piece of property.
To file a deed, a person should visit their local recorder’s office. There, they can hand the deed to a clerk who will take care of the filing. It should be noted that there may be a small fee to file the deed. The fee amount will vary by jurisdiction, but usually starts at around $10. Eventually, the recorder’s office should return a copy of the recorded deed to the deed holder.
One final thing to keep in mind about the recording process is that each state has its own separate laws known as “recording acts”. These acts govern the process of how and when a person should record their property, and can help settle any disputes that arise over ownership.
Are There Different Types of Deeds?
There are many different types of deeds of transfer. Some of the most common ones include the following:
- Quitclaim deeds: These types of deeds provide the least amount of protection for a buyer. While they do transfer the property, they do not guarantee that the grantor has actual ownership or rights in the property. They also leave the buyer open to potential legal issues (e.g., if there is a lien against the property or someone else is the true owner and tries to claim it).
- General warranty deeds: In contrast to quitclaim deeds, general warranty deeds give the buyer the greatest amount of protection. It guarantees that the grantor actually owns and can sell the property. It also promises that the property does not have any debts, encumbrances, or liens against it.
- Special warranty deeds: This type of deed gives the buyer adequate protection, specifically, for two guarantees. The first is that it states that the grantor does hold title to the property. Second, it also guarantees that no liens or encumbrances existed on the property while the grantor owned it, but says nothing about what encumbrances may be associated with the property before they owned it.
What Type of Deed Is Most Commonly Used?
The most common type of deed that is used in real estate transactions is the general warranty deed. This deed offers the greatest protections for a buyer through its terms. Specifically, the terms of a general warranty deed usually contain six covenants (or promises).
Some of these covenants include that:
- The grantor is the rightful owner of the property and can legally transfer its title;
- There are no liens, debts, or encumbrances on the property (neither prior to nor during their ownership period); and
- If a legal issue does come up, then the grantor will be responsible for fixing it.
However, whether a covenant is included or not will depend on the laws of a particular state. Thus, the terms of a deed and what it guarantees may vary.
How Do Liens and Title Issues Relate to a Deed?
As previously mentioned, the type of deed received will determine the kinds of rights or protections it offers. Thus, if a property has a lien against it or there are title issues with a home, then this can have an impact on the type of deed that the seller will be able to convey.
For example, a lien may be placed on a property when its owner has outstanding debts that they still owe (usually to a bank or creditor). Since a lien means that the owner cannot transfer clean title, then the owner will not be able to use a general warranty deed because this deed guarantees that there are no debts, liens, or encumbrances on the property.
The same can be said if the property has some other kind of title issue. For instance, if the grantor does not truly hold title to the property, then the only deed they can give to the buyer is a quitclaim deed.
If I Inherited a Property, How Do I Get a Deed?
A different type of deed may be used when a person inherits property from a family member. For instance, some states use what is known as a “transfer on death deed”. The way this deed works is that the current owner will sign over a deed to the new owner while they are still alive. Once the current owner dies, however, the deed will automatically transfer ownership to the new one.
In other states, a person may create a will in order to transfer property upon their death. In this case, when the family member dies, the person inheriting the property must bring a copy of the will and their death certificate to the county recorder’s office for filing. After these documents are filed, a clerk there will update the deed to reflect the new ownership.
Do I Need a Lawyer to Transfer a Deed?
While it is certainly possible to transfer a deed without any legal assistance, it can be very difficult to do so properly because of the strict requirements and laws that must be followed. Therefore, if you need any help transferring, drafting, or obtaining a deed, then you should consult a local real estate attorney for further guidance.
Your lawyer can help ensure that the transfer goes smoothly and that the transaction is conducted in a manner that complies with relevant laws and proper protocols. Your lawyer can also determine whether you are using the right type of deed, and will be able to provide representation if any disputes arise regarding the deed or its transfer.