A deed is a type of legal document which transfers ownership rights to a home or other piece of property from the current owner to a new one. Although there are many different types of deeds, which will be further discussed later on, deeds generally include the following information:

  • A description which identifies the property that is being transferred;
  • The names of all parties who are taking part in the deed transaction, or the grantor and the grantee; and
  • The signature of the party who is transferring the deed, which must be notarized by a notary public.

The most common reasons that a deed may be used include:

  • Transfer ownership during the purchase or sale of a home;
  • When a person inherits property from one of their family members; and
  • To transfer gifts, trust contents, and certain rights, such as a sheriff’s deed or tax deed.

If you receive a property deed, it is imperative that you remember to record it with the local county recorder’s department. This will be done in the county in which the property is located. While recording a deed is not required by law, failing to record your deed can lead to serious consequences.

An example of this would be how if a buyer does not record the deed to their new house, it will be considerably difficult for them to prove that they are the true and legal owner. A person who cannot prove true ownership over their property may not be able to sell their property, and risk losing the ability to refinance their mortgage.

Additionally, recording a deed is necessary in order for it to be considered valid. This puts everyone else on notice that the deed holder owns and is also the rightful owner of that particular piece of property.

In order to file a deed, a person will need to visit their local recorder’s office where a clerk will file it according to local procedure. It is important to note that there may be a small fee to file the deed. This amount will vary by jurisdiction, but is generally $10. At a later date, the recorder’s office will return a copy of the recorded deed to the deed holder.

A final note about the recording process is that each state has its own separate laws, which are generally known as recording acts. These acts govern the process of how and when a person should record their property, and can help settle any issues associated with property ownership.

What Are The Parts Of A Deed?

To reiterate, different deeds may contain different information. Generally speaking, a deed will have the following parts:

  1. Grant Clause: A grant clause is a section of the deed that contains important information, such as the parties’ names and a description of the land that is to be transferred. A grant clause will also include the price paid for the deed;
  2. Habendum Clause: A habendum clause addresses property rights, interests, and other aspects of ownership given to one of the parties through the deed. Because the clause begins with the phrase, “to have and to hold,” the habendum clause is sometimes referred to as the “to have and to hold clause.” In general, the habendum clause states that the property is transferred without restrictions; meaning, the new owner has absolute ownership of the property once they have satisfied their conditions, as well as the right to sell or bequeath the property to an heir. The type of property title transferred through a habendum clause is called fee simple absolute;
  3. Warranty Clause: A warranty clause lists the type of title assurance that is provided by the grantor. If necessary, you should ask the real estate agent to try for full assurances that the grantor will clear any and all challenges to title at any time;
  4. Execution Clause: The execution clause displays the signature of the grantor, as well as the date, in order to show that the transfer is valid. It is important to ensure that the date is legible; and
  5. Acknowledgement Clause Or Certificate: An acknowledgement clause, also known as a certificate, may be notarized and contain the signatures of any other witnesses in addition to the grantee.

What Are The Different Types Of Deeds?

As previously mentioned, there are many different types of deeds of transfer. Some examples of the most common include the following:

  • Quitclaim Deeds: These deeds provide the least amount of protection for a buyer. Quitclaim deeds do transfer the property; however, they do not guarantee that the grantor has actual ownership or rights to the property. Additionally, quitclaim deeds also leave the buyer open to potential legal issues. An example of this would be if there is a lien against the property, or someone else is the true owner and tries to claim it;
  • General Warranty Deeds: In opposition to quitclaim deeds, general warranty deeds provide the buyer with the greatest amount of protection. These deeds guarantee that the grantor actually owns and can sell the property. They also promise that the property does not have any debts, encumbrances, or liens against it; and
  • Special Warranty Deeds: Special warranty deeds give the buyer adequate protection for two specific guarantees. First, it states that the grantor holds title to the property. Second, it guarantees that no liens or encumbrances existed on the property while the grantor owned it. However, it says nothing about what encumbrances may be associated with the property before they owned it.

What Type Of Deed Is The Most Commonly Used?

The most commonly used type of deed is the general warranty deed. This deed offers the greatest protections for a buyer through its terms, or covenants.

Some of these covenants include that:

  • The grantor is the rightful owner of the property, and as such can legally transfer its title;
  • There are no liens, debts, or encumbrances on the property, neither prior to nor during their ownership period; and
  • The grantor will be responsible for remedying any legal issues that arise.

However, whether a covenant is included or not will depend on the laws of each particular state. As such, 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 offered by the deed. Because of this, if a property has a lien against it or if there are title issues with a home, this can impact the type of deed that the seller will be able to convey.

An example of this would be how a lien may be placed on a property when its owner has outstanding debts that they still owe. Because a lien means that the owner cannot transfer clean title, the owner will not be able to use a general warranty deed. This is because this deed guarantees that there are no debts, liens, or encumbrances on the property.

The same is true if the property has some other kind of title issue. An example of this would be if the grantor does not truly hold title to the property. The only deed they can provide to the buyer would be a quitclaim deed.

Do I Need An Attorney To Review A Deed?

If you are being presented with a deed, you should consult with an experienced and local real estate attorney. A local lawyer will be best suited to helping you understand your state’s specific real estate laws, and can review your deed in order to determine whether it is legal and sound. Additionally, your lawyer will also be able to represent you in court, as needed.