Types of Deeds
Discussion Topic
- What are the basic requirements for a valid deed?
A written instrument
Competent grantor
Identity of the grantee
Word of conveyance
Description of property
Consideration
Signature of grantor
Witnesses of deeds
Delivery of grantee
- There are four (4) types of deeds commonly recognized in the U.S. List them and provide the warranties/covenants provided by each. (*You need not explain each of the warranties/covenants because you will be doing that in the assignment.)
- General warranty deeds- contain six covenants:
- Limited (special) warranty deeds- covers current owner form limited claim.
- Grant deeds- A free of encumbered and title.
- Quitclaim deeds—No warranty title coverage.
- In a real estate transaction, considering the type of deed to be used to convey the property, does your perspective depend on whether you are the buyer vs. the seller? Why or why not?
Yes, it depends either way on the grantor or grantee. The property’s conveyance uses language to protect both parties listed in the conveyance. Of course, a general warranty deed varies from state to state, depending on which regulations or laws apply. Each type of deed is written in different conveyance for present or future covenants. However, specific language must be required in the legal document to protect the grantor or grantee.
- If you are the buyer, what type of deed would you want? Why?
I prefer a Trust Deed when purchasing real property, as it involves placing the property’s title in a trust. Making a major purchase, such as real estate, is essential, especially in the long-term process of the deed to transfer to my benefactors. Realizing a Trust Deed is suitable for executing the trustee’s wishes without going through probate court. In the event of my passing, the trust allows me to designate the new grantor and trustee, ensuring a smoother transfer of ownership to my chosen beneficiaries without probate court involvement. Furthermore, establishing a trust enables me to include my other assets and pass them on to my heirs. Selecting a warranty deed for this purpose protects my property, preventing any claims against the rights to the title of the trust, appurtenance, or property by the grantor or other parties.
- If you are the seller, what type of deed would you want? Why?
In the real world, I wonder if the seller can select a type of deed in closing. However, if I choose a type of deed as a seller, it is a General Warranty Deed. Different implications are depending on the type of deed. Ensure transparency when selling; transferring real property free of a lien is necessary. Also, this type of warrant is against any deficiencies or encumbrances, meaning that the property has no legal claims from creditors and is not used as collateral in a debt. The warranty deed has six covenants that assure the grantee of the property benefits from these covenants. However, the downside is that there are no guarantees, but the past property owner/s can be sued for breach of the property covenant in General Warranty Deeds; it is essential to note that with any deed, if there is a breach of contract or violation of any clauses in the agreement between the grantor and the grantee.
from Module 5 Discussion – Types of Deeds
Sep 18, 2024 7:41PM
Hi Classmate A,
I’m intrigued by this question because most of our peers have chosen a General Warranty Deed. I agree that this type of coverage is crucial as it protects both the grantor and the grantee from potential issues. It’s important to understand that comprehensive protection involves complex legal implications that we need to be aware of.
Let me illustrate with an example: If you own a home and have company A install new windows with a lifetime warranty, you might feel comfortable purchasing the windows because of the warranty. However, if the company goes out of business in the state where your property is located, the lifetime warranty becomes ineffective. I used the windows as an example to show how we can be left dealing with defective or deceptive products or services from individuals or businesses. With anything, there is no comprehensive protection.
On the other hand, I agree that if you are the seller and trying to minimize your risk, a “Quitclaim Deed” could be a viable option. However, it’s essential to be cautious. Without a title search, what if an issue arises in the title search for the grantee of the property you sold? If they decide to refinance or get an additional loan and find out the title is unclear, what legal remedies are available for clearing it? These are essential questions to consider, and they highlight the need for careful consideration when opting for a Quitclaim Deed.
I appreciate your responses and wanted to present a hypothetical situation. This topic is crucial in our field, and I’m glad we’re discussing it.
from Module 5 Discussion – Types of Deeds
Sep 19, 2024 11:05PM
Hi Classmate B,
I noticed that you prefer a limited warranty deed as a seller. I’m curious to understand how this benefits you more than the buyer. My research shows that title insurance typically costs about 0.5% of the property’s selling price. While a limited (special) warranty deed covers you as the grantor during your ownership, it may not provide comprehensive protection in case of unexpected claims after the property is sold.
For instance, if a third party makes a claim on the property you were unaware of, and the title insurance coverage is insufficient to cover the claim, the grantee could sue you for the additional amount not covered by the title insurance. Since the limited (special) warranty deed does not fully cover the total amount of the title insurance, you may still be legally responsible if there is an unexpected claim.
In contrast, a general warranty deed provides a more thorough title search and offers guarantees about the property’s history, potentially protecting you from such scenarios. It’s essential to consider the potential risks and benefits associated with the type of deed you choose to use.
I partially agree with you about the Limited (Special) Warranty Deed. Still, considering the pros and cons of liability, I would reconsider a General Warranty Deed—just a thought I would share.
Written by: Greg MD
Greg MD Blog 
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