There are a number of different types of real estate deeds depending on the purpose and circumstances surrounding the conveyance, yet all deeds operate for a single purpose. They all represent some degree of ownership transfer in real property. To understand the implications of property deed transfers you must first understand the transfer methods available to brokers and owners of real property.
For a deed transaction to be legally effective, depending on the jurisdiction, the deed must comply with certain minimum statutory requirements, such as making sure the deed contains an adequate legal description of the property, the names of the old and new owners to the property are clearly identified on the deed, and the parties transferring the real estate actually sign the transferring document. Finally, most jurisdictions require that deed transfers be legally witnessed and duly notarized.
Different types of deeds accomplish different types of purposes. The following are descriptions of five types of deed classifications: grant deeds, quitclaim deeds, warranty deeds, special warranty deeds and trust deeds.
A grant deed transfers ownership along with a legal representation identifying the property to be conveyed. The transfer is finalized when it is recorded within the county in which the property is physically located. The distinguishing feature of the grant deed is that it expressly warrants that the grantor actually has the required legal title to make such a transfer. As you will soon see, this is not the case with the quitclaim deed.
In most jurisdictions, a quitclaim deed is defined as a legal transfer of property that conveys and relinquishes all of the grantors title, claim and interest to a particular property. It also means that a quitclaim deed does not guarantee that the grantor has clear title to the property, nor does it include promises that the grantor has the required legal capacity or right to even make such a transfer. The same is not true in the case of warranty deeds.
In most jurisdictions a warranty deed transfers ownership and expressly warrants to the buyer that the seller has good and lawful title to the property and has the legal right to sell the title. A warranty deed normally contains certain representations about the property, which is legally construed as contractual promises. The seller normally promises that the property is free of all liens, encumbrances and competing claims of ownership. In this way the warranty deed operates very much like a contract, allowing the buyer to sue for damages caused by the breaching party, usually the seller of the property.
In most jurisdictions, a trust deed is also called a deed of trust or mortgage. It is a specific type of legal agreement in which the borrower promises to transfer to the trustee good and lawful title for the benefit of the lender and as security for the borrowers debt.
Special Warranty Deed
Usually the purpose of a special warranty deed is to protect the grantor from being held legally responsible for any work done to the property while it was in the control of a previous owner. A special warranty normally conveys that the grantor warrants that they received title and that the property was not encumbered during grantors period of ownership.
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