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Real property is subject to be transferred in several ways: (l) by purchase; (2) by devise; (3) by descent; (4) through adverse possession; and, (5) by eminent domain. However, the most common form of property transfer is by deed. In a modern sense, a deed is a written transfer or conveyance of title to or interest in real property.
Most states have codified laws in regard to the forms, requirements, contents, and legal effect of the deeds acceptable for use in that state.
In some others, the various forms of deeds in common use have been developed through custom and usage, and are based upon the common law as modified by statute.
A deed may be divided into three component parts: the premises; the habendum; and, the testimonium. The premises include the date, parties, consideration, granting clause, description, recital, and appurtenances. The habendum et tenendum (to have and to hold clause) includes this clause and the Under and Subject or Mortgage clause. The testimonium clause includes the Warranty and "In Witness Whereof." This outline is valuable to remember so that a person may check a deed to ascertain that all clauses are included and, also, as an aid in preparing a proper deed.
It is of fundamental importance to know that the extent of the right which a person acquires in property can be no greater than that enjoyed by a predecessor in title.
Any interest in real property, whether present or future, vested or contingent, may be transferred. This includes, but is not limited to fee simple, an easement, an undivided interest, a life estate, timber and mineral interests, a vendee's interest or a lessee's interest. A mere possibility, not coupled with an interest, may not be transferred.
Unless expressly excepted, the transfer of a thing transfers also all its incidents. Thus, a conveyance of land subject to a lease carries the right to collect the rents, and the grantee is subrogated to all rights of the grantor as a lessor.
Deeds most commonly used in the United States are general warranty deeds, special warranty deeds, quitclaim deeds, and deeds of bargain and sale.
Many states have enacted statutes permitting the utilization of simplified or shortened instruments of conveyance.
Bargain and Sale Deed
A bargain and sale deed is a deed that recites a consideration and conveys all of the grantor's interest in the property to the grantee. This deed usually does not include warranties as to the title of the property conveyed. However, by implication, the grantor asserts that the grantor has possession of, claim to, or interest in the property conveyed.
Cemetery Plot Deed
A cemetery plot deed or certificate conveys a privilege, easement, or license to make internments in the lot purchased, subject to regulations governing the cemetery and to the police power of the state.
A cession deed conveys street rights or other rights of privately owned property to a municipality or county. A cession deed is called a dedication deed.
A correction deed is used to correct a prior erroneous deed. A correction deed is also called a deed of confirmation or a reformation deed.
See Cession Deed above.
Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is given by the owner of mortgaged property to the holder of the mortgage when the mortgage is in default and foreclosure is threatened. This deed is given and accepted as an alternative to foreclosure.
Deed of Assignment
In some states, a deed of assignment is a legal term used to describe a unit lease and is an instrument conveying a unit leasehold interest in a leasehold condominium (as distinguished from a unit deed, which conveys the ownership interest in a unit in a fee simple condominium). It is also known as a deed of conveyance and assignment or a deed of space.
Deed of Confirmation
A deed of confirmation is a written conveyance of an estate in being, by which a voidable estate is made certain and unavoidable; it is a written instrument employed to correct errors of execution in other deeds. See Correction Deed above.
Deed of Indenture
The old common-law indenture was a parchment with two copies of the deed written on it. These two copies, on the same parchment sheet, were separated by a space, in which certain words were written; the parchment being cut in an indented or waving line through these words.
The later practice in England was to prepare an indenture for all deeds executed by both grantor and grantee; the deed poll (polled, or shaven, all smooth edges, rather than one wavy edge) being used when only the grantor signed the deed. In modern practice, the indenture, as well as the deed poll, is written on a single sheet of paper, the indenture not being "indented" as anciently; the difference between the two is that the indenture is signed by both grantor and grantee, whereas the deed poll is signed only by the grantor.
Deed of Partition
A deed of partition is executed and delivered for the purpose of effecting a judicial or nonjudicial partition of real estate. A conveyance between two or more joint tenants, copartners, or tenants in common, by which they divide the property in severalty, each taking a separate and distinct part of the property according to their ownership interest.
Deed of Reconveyance
In some jurisdictions, a deed of reconveyance is an instrument that transfers legal title from the trustee under a deed of trust to the borrower (trustor) after the outstanding indebtedness had been paid in full.
Deed of Release
A deed of release releases property from the lien or encumbrance of a mortgage or deed of trust on payment or performance of its terms and conditions. In modern practice, a deed of release performs the same function as that of a quitclaim deed. It is also used in connection with judgments or other liens.
Deed of Trust
In some jurisdictions, a deed of trust is an instrument used instead of a mortgage.
A deed poll is made and executed by only one person.
Deed to Support
A deed to support is made in consideration of the grantor's future support.
Fiduciary or Representative Deed
A fiduciary or representative is executed by a person in a fiduciary capacity or as a representative of the estate of the grantor.
General Warranty Deed
A general warranty deed or full covenant and warranty deed is a deed in which the grantor fully warrants good and clear title to the premises.
A gift deed is executed and delivered without valuable consideration.
A grant deed is a deed where the covenants are created by statute and are contained in the deed merely by using the word "grant." In the typical grant deed, the grantor warrants that the grantor has not previously conveyed the estate being granted to another, that the grantor has not encumbered the property except as noted in the deed, and that the grantor will convey to the grantee any title to the property they may later acquire.
A mineral deed conveys the rights to subsurface land or profits.
A quitclaim deed conveys whatever interest the grantor has in the property, as distinguished from a grant of the fee or other estate with warranty of title. The grantee takes the title "as is." A quitclaim deed is sometimes called a release deed.
In modern usage, a release deed is now synonymous with a quitclaim deed. In some jurisdictions, a release deed is effectuated in connection with the satisfaction or correlation of a mortgage, deed of trust, or any other kind of lien that affects the property.
A sheriff's deed is given by a sheriff after a court-ordered or execution sale of property.
Special Warranty Deed
A special warranty deed contains a covenant of special warranty rather than a covenant of general warranty. Such a covenant of special warranty is a covenant of warranty contained in a deed which is limited or restricted to certain persons or claims. In its most usual form, a warranty is only against claims held by, through, or under the grantor.
A deed used to convey property which specifies that, as consideration, the buyer will support the grantor for the rest of the grantor's life.
A tax deed is an instrument used to convey legal title to property sold by a governmental taxing authority for nonpayment of taxes.
Transfer on Death Deed
A Transfer on Death Deed (TODD) allows an individual who owns real property to pass title to their property upon his/her death, avoiding the need for a probate.
Trust deed or deed of trust are synonymous and are terms used in two senses. In the first usage, it is a document that creates a trust or by which property is transferred to a trust. In the second usage, it is a mortgage used in some states, and in other states, it denominates a security instrument in situations where a debt has been divided up and sold, as in the case of the sale of bonds for which the security is real property.
The essential elements of a valid deed are established by the law of each particular jurisdiction.
However, it can be stated that in modern conveyancing the most common essential elements to be found are:
Depending upon the statutes of the particular state where the land is located, the essential elements may also include:
Unless required by state law, the date is not an essential element to the validity of a deed, even though good draftsmanship requires the showing of a date.
A number of jurisdictions have adopted presumptions relative to the date of the execution of an undated deed through the utilization of the time of delivery, time of acknowledgment, or time of recording.
However, the common mistake of dating the deed subsequently to the date of the acknowledgment does create a question of validity.
A deed involves the participation of at least two parties: A grantor who must have the capacity to convey and a grantee who must have the capacity to take. All persons who are to execute a deed as grantors should be named as parties-grantors, and all persons who are to take as grantees should be named as parties-grantees.
Parties - Grantors
Identity - The grantor must be the record owner of the interest being conveyed. When a difference in the name of a grantor is due to change in name, death, merger, judicial sale, etc., either the deed must contain an appropriate recital or the records must contain sufficient evidence of that fact. However, in several states, statutory and case law permit a wide range of variance in this respect.
Disabilities - Based on their origins, the different types of statutory disabilities affecting the grantors may be grouped as follows:
a) Corporations have forfeited their charters.
b) Conveyances by one married person without the joinder of spouse.
c) Conveyances by straw parties.
d) Conveyances by unincorporated associations.
e) Conveyance by one tenant by entirety.
f) Conveyances by debtors in bankruptcy.
The effect of a disability is to make the deed, depending on the circumstance, either void or voidable.
Grantor's Spouse - Whether or not the grantor's spouse must join in the execution of the deed depends upon state law.
Generally speaking, however, it is necessary for the grantor's spouse to join in the execution of the deed for one or more of the following reasons:
Parties - Grantees
Identify - Every deed must have a grantee capable of holding title. A deed without a grantee is totally inoperative as a conveyance. As long as the name of the grantee is left blank in a deed, legal title to the property does not pass.
The grantee must be designated in such a manner as to be fully ascertainable and identifiable. However, statutory and judicial law must be fully researched in this respect for possible deviations.
Kinds - Grantees may be divided into the following categories:
Capacity - An effective deed requires a grantee with capacity to acquire and hold the title of the property or the interest being conveyed.
Generally, the grantee's capacity is determined by state law.
Disabilities - Neither minors nor mentally disabled persons experience any kind of disability when being named as grantees.
In general terms, a grantee's disabilities may be grouped as follows:
1) They are not in existence.
2) They are not properly organized.
3) They are not recognized by statute.
4) Their charters had been forfeited, canceled, revoked, or suspended.
Note: In certain states, some of the above disabilities have been changed or modified by statute.
The consideration for a deed is the price paid for the property. In many states, statutes have been enacted providing that consideration is no longer needed for an effective deed, and the same result has been judicially accepted in other states. The tendency of modern statutes and judicial decisions is to presume the existence of a consideration.
The practice of inserting a dollar as consideration is sufficient for the requirements of the law. A conveyance for no consideration at all will not be entitled to the protection of the recording act.
Despite the increasing dispensation with the requirements of consideration, the absence or inadequacy of consideration may have collateral consequences such as the voidability of the conveyance at the behest of prior and unpaid creditors under the Bankruptcy Code.
State law generally requires that any deed executed by a fiduciary (trustee, executor, administrator, guardian, conservator, etc.)or by an officer of the court should recite the full and actual consideration received for the transfer.
In order to be valid, a deed must contain appropriate words of conveyance that manifest the intention of the grantor to divest itself of the title and or an interest therein to convey it unto the grantee. These words of conveyance, also termed words of grant or operative words, constitute the granting clause of the deed. Depending on the jurisdiction, the interest being conveyed and the warranties given by the grantor, these words are:
A deed containing no words of grant conveys no title.
An adequate description is an essential element of a deed.
A description must be sufficiently full and definite to afford a means of identification of the property or refer to something extrinsic by which the land may be identified with certainty.
Without an identifiable description, a deed is totally void.
The habendum clause ("to have and to hold"), where used, operates to define the quantity of estate which the grantee is said to have in the property granted. The estate granted may be limited in the earlier part of the deed and if the habendum contradicts the earlier limitation, it will have no effect. If the two can be reconciled, then effect will be given to both.
In modern conveyances, the habendum clause is generally a useless repetition of what has already been given. It is entirely omitted from the statutory forms and is a nonessential element in all forms of deeds.
In general, a recital is a formal statement contained in a deed relative to some matter that affects either the subject transaction or the prior chain of title.
Recitals may occur in any portion of a deed. They are employed in private conveyances for some of the following purposes:
All recitals are binding on the grantor, the grantor's heirs and representatives, but both the fact of whether, and the extent to which, they bind adverse claimants, and as to whether they may be used as evidence in favor of a grantee, the grantee's heirs, and assigns, are almost wholly matters of statute. Recitals are not necessary to the validity of a conveyance, but are often useful in construing some ambiguity to which they are pertinent.
Covenants of title, also referred to as warranties of title, are assurances, guarantees, promises, or representations made by the grantor to the grantee with respect to the title of the property being conveyed.
These covenants or warranties differ somewhat in their scope, depending on the local practice, but those frequently encountered are as follows:
In some jurisdictions, a deed must contain a clause releasing and relinquishing all homestead, dower, and curtesy right in the premises.
See Curtesy, Dower, and Homestead.
The execution of the deed is the actual signing of the deed by the grantor or by the grantor's authorized agent. Execution is an essential element to the validity of a deed.
State law regulates and provides the manner and form in which deeds are to be executed by individuals, legal entities, agents, attorneys-in-fact, personal representatives, fiduciaries, blind persons, illiterates, etc.
Signatures do not need to be legible, but in some jurisdictions, the full name of the grantor must be typed beneath the signature line.
In the majority of jurisdictions, seals are no longer essential to the validity of a deed. But, in a few states, their use is still necessary. Sometimes, the technical requirement for a seal is satisfied by merely writing the word "L.S." for locus sigilli, meaning "the place of the seal" next to a signature.
For title insurance purposes, a seal is unnecessary unless required by law.
In most states, it is not necessary to have a deed witnessed. In some states, the law requires two witnesses in order to record a deed, but without witnesses the deed is valid between the grantor and the grantee. If any grantor has signed by mark, the deed should have two or more witnesses.
Attestation is the witnessing of a written instrument, as requested by the instrument's maker, and subscribing (signing) it as a witness. The number of witnesses is prescribed by state statute. In many states, corporate deeds must be attested--usually by the secretary of the corporation.
In some jurisdictions, state law requires the deed to recite the source of title of the grantor.
To be valid, a deed must be delivered during the lifetime of the grantor. The delivery of a deed usually is accomplished by direct delivery to the grantee; however, it can be effected by delivery to a third party for delivery to the grantee at some later date, even after the death of the grantor, if by the delivery to such third party the grantor lost all dominion and control over the deed and retained no right to recall it. The recording of a deed by or at the direction of or with the approval of the grantor constitutes delivery. In the first analysis, no particular form or ceremony is necessary to constitute a delivery of a deed. Delivery is complete when the grantor by act, word, or both, parts with dominion over the instrument with the intent to make it operative.
See Delivery. (4.24)
A voidable deed is capable of being either avoided or confirmed. The deed may appear to be valid and enforceable on its face, but is subject to voidance by a party who acted under a disability. Voidable deeds pass title subject to being set aside in appropriate judicial proceedings.
A void deed is one invalid in law for any purpose whatsoever. Void deeds pass no title to real property even in favor of bona fide purchasers.
When blanks are left in a deed, the deed is of no effect unless it can be operative without the omitted words.
When the grantee's name is left blank, no title passes unless filled in prior to delivery by the grantor or by a duly authorized agent of the grantor.
For the purposes of title insurance, it is not permissible to rely upon the application or obligation of any rule of deed construction or deed interpretation whenever the language in a deed is ambiguous or the instrument presents areas of contradiction, conflict, or discrepancy.
Rules of deed construction and interpretation must be deferred to courts of law. Typical situations requiring a judicial determination are the following:
The nature of the interest being conveyed; or
The quantum of the interest being conveyed; or
The parties to whom the interest is being conveyed; or,
The form of tenancy or ownership being created
The doctrine of after-acquired title, also referred to as the doctrine of estoppel by deed, provides that when a grantor who does not have title to real property or whose title is defective at the time of the conveyance, executes by a proper grant a conveyance of real property to a grantee, the grantor will not be permitted, upon the acquisition of good title to the property, to claim in opposition to the grantor's deed as against the grantee or any person claiming title under the grantee.
Generally, the after-acquired title doctrine is based on various legal doctrines or statutes. There are certain limitations upon the application of the after-acquired title doctrine, and state law must be researched as to the extent of the applicability of the doctrine within any specific jurisdiction.
It is well established that a mere quitclaim deed has no effect on the title acquired by the grantor after the date of the deed.
Title acquired by the doctrine of after-acquired title is not marketable title because it is not within the chain.
The following is a list of items to be examined and analyzed when examining and determining the validity of a deed. Some of the findings will require special consideration and probably will result in the showing of certain title exceptions either in title commitments or policies. State law must be researched in order to ascertain fully those items that constitute jurisdictional requirements.
Is the proper statutory form of deed being used?
Is a quitclaim deed the only source of title of the proposed insured?
Does the instrument show a date?
Is the date of the instrument not later than the date of the notary's acknowledgment?
Is the grantor either the record owner of the property or the record owner of an interest therein?
Is there any variance between the name of the grantor in the instrument and the name of the grantee in the precedent recorded instrument?
Does the instrument recite the marital status of the grantor?
Is the grantor single?
Is the grantor married?
Is the grantor's spouse, if any, joining in the execution of the instrument?
Is there any statutory provision that makes it unnecessary to require the joinder of the spouse?
Is the grantor any of the following:
7) Native American Indian (as to tribal property)
Is the grantor any of the following:
1) Domestic corporation
2) Nondomestic corporation (U.S. corporation)
3) Foreign corporation (non-U.S. corporation)
4) General partnership
5) Out-of-state general partnership
6) Foreign general partnership (non-U.S. general partnership)
7) Limited partnership
8) Out-of-state limited partnership
9) Foreign limited partnership (non-U.S. limited partnership)
10) Trust entity
11) Land trust
Is the grantor a fiduciary?
If a fiduciary, has the grantor's legal capacity been ascertained?
Is there any limitation to the grantor's fiduciary capacity?
Surviving Joint Tenants, Tenant by the Entirety or Community Property Member-Capacity
Has the fact of the death of the deceased tenant or community property member been established of record?
Is it necessary to initiate any kind of judicial proceedings?
Is it necessary to pay any estate or inheritance taxes?
Heir or Devisee-Capacity
Is the grantor either an heir or a devisee of the record owner?
Have the proper probate proceedings been fully completed?
Are the proper probate proceedings still pending?
If the probate proceedings are still pending, have all the claims and pertinent taxes been fully paid?
Is there still time to contest the will and file claims against the state?
If probate proceedings are still pending, is the title to the property unmarketable?
Court Administrator, Executor, Commissioner, Sheriff, Conservator, Guardian, Trustee in Bankruptcy, Trustee in Foreclosure, etc.
If the grantor is any of the above, has the grantor's capacity and authority been fully ascertained.
Have the related proceedings been properly examined?
Do these proceedings fully comply with the related statutory provisions?
Is a court order approving the sale available for recordation?
Does the grantee have the statutory legal capacity to accept the transfer
of the title?
Does the grantee qualify as grantee under state law?
Is the grantee any of the following:
5) Nondomestic legal entity (U.S.)
6) Foreign legal entity (non-U.S.)
9) Undetermined class
10) Unincorporated association
12) Unborn person
14) Railroad corporation
Are there any statutory limitations on the acquisition of title by any of the above grantees?
Does state law require showing of the grantee's street address?
Title or Interest Conveyed
Is the interest being conveyed any of the following?
1) Fee Simple
2) Life Estate
3) Future Interest
6) Air Right
7) Mineral Rights
Is the title or interest insurable?
Is the appropriate policy form being used?
Is all the title or interest being conveyed or just a portion thereof?
Form of Ownership Being Created
Does the instrument create any of the following forms of ownership:
2) Tenancy by the entirety
3) Joint tenancy
4) Tenancy in common
5) Community property
Is the form of ownership created by the instrument allowed by statute?
Is any consideration being recited?
Is the actual consideration for the transfer recited in the instrument, if the instrument is one which under state law requires that recitation?
Is a nominal consideration being recited?
Does the instrument provide for the future payment of all or part of the consideration, either by the payment of money or the performance of services?
Does the instrument contain the proper statutory granting language?
Does the instrument contain words sufficient to make a present unconditional transfer of the grantor's entire ownership?
Does the instrument convey less than the grantor's entire ownership?
Does the instrument contain any provision which might cause the ownership of the grantee to terminate, or to be transferred to another upon the lapse of time or the future happening of a certain or uncertain event?
Does the instrument describe the land with reference to either information
found in the public records or information constituting the physical monuments
on the land itself?
Is the legal description insurable?
Is a survey necessary?
Is it necessary to comply with any subdivision, lot-split, condominium, townhome, or P.U.D. laws?
Subject to Clauses
Does the instrument make the transfer subject to any of the following:
Exceptions and Reservations
Does the instrument contain any reservation or exception either in the description or in any other part thereof?
Covenants or Warranties of Title
Does the instrument contain the proper statutory covenants or warranties of
Is there an exception from the covenants of warranty or a recitation that refers to a defect, lien, or encumbrance which is not shown by the public records?
Restrictions or Conditions
Does the instrument impose conditions or restrictive covenants in the use or occupancy of the land?
Does the instrument contain any factual recitals required by state law?
Is the instrument signed by the grantor or by someone in behalf of the grantor and if the latter, is the authority to sign in behalf of the grantor properly established by matters appearing in the public records?
Has the grantor signed the instrument with a mark?
Is the grantor blind?
Is it necessary to affix the seal of the corporation?
Does the instrument need to be attested?
Is a seal necessary?
Has it been affixed?
Do real estate taxes need to be paid before the document is recorded?
Is it necessary to attach documentary stamps to the instrument?
Does state law require the instrument to be acknowledged or proved in order
to be valid?
Has the instrument been properly acknowledged or proved?
Does state law require the instrument to be witnessed, and if so, by how many persons?
Name of Draftsman
Does state law require the deed to state the name and address of the draftsman?
Recital as to Source of Title
Does state law require the deed to recite the source of the grantor's title?
Does the instrument show erasures, liquid paper, or unauthorized alterations?
Waiver of Dower and Homestead
Does state law require the instrument to contain the necessary waivers of dower and homestead rights?
Has delivery of the instrument been effectuated?