Types of Property Deeds
For a deed transaction to be legally effective, depending on the jurisdiction, the deed must comply with specific 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 of the property are identified on the deed. Finally, most jurisdictions require that deed transfers be legally witnessed and duly notarized according to the laws of your state.
Different deeds have different purposes
Different types of deeds accomplish different kinds of purposes. Knowing the significant differences is essential, for example, if you consider purchasing a foreclosed home. The following are descriptions of five different deeds: grant deeds, quitclaim deeds, warranty deeds, extraordinary warranty deeds, and trust deeds.
Grant Deed
A grant deed transfers ownership and a legal representation identifying the property to be conveyed. The transfer is finalized when it is recorded within the county where the property is physically located. The distinguishing feature of the grant deed is that it expressly warrants that the grantor has the required legal title to make such a transfer. As you will soon see, this is not the case with the quitclaim deed.
Quitclaim Deed
A quitclaim deed is defined as a legal transfer of property in most jurisdictions that conveys and relinquishes all of the grantor’s title, claim, and interest to a particular property. It also means that a quitclaim deed does not guarantee that the grantor has a clear title to the property, nor does it include promises that the grantor has the required legal capacity or right to make such a transfer. The same is not valid in the case of warranty deeds.
Warranty Deed
In most jurisdictions, a warranty deed transfers ownership. It expressly warrants that the seller has true and lawful title to the property and has the legal right to sell the title.
A warranty deed typically contains certain representations about the property, which are legally construed as contractual promises. The seller generally promises that the property is free of all liens, encumbrances, and competing claims of ownership. In this way, the warranty deed operates like a contract, allowing the buyer to sue for damages caused by the breaching party, usually the property seller.
Trust Deed
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 true and lawful title to the trustee for the lender’s benefit and as security for the borrower’s 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 under the control of a previous owner.
A unique warranty usually conveys that the grantor warrants that they received a title and that the property was not encumbered during the grantor’s period of ownership.
