Ø When private property was first recognized, a real estate transfer was accomplished by physically exchanging a clump of ground before witnesses.
Ø As the practice spread, such transfers were documented by written statements.
Ø These written statements evolved as deeds, which are defined as written instruments that convey an interest in real estate.
Ø The interest conveyed depends largely on the type of deed used for conveyance.
Ø A deed must be signed, sealed and delivered because it is a contract
Ø The deed must satisfy the requirements of the contract.
Types of deeds:
Various types of deeds are given in the following:
1. Warranty deeds:
Ø In the warranty deed, the seller makes certain promises or covenants to the buyers.
Ø These covenants are included only in warranty deeds:
Þ The covenant of seizing
Þ The covenant of quit enjoyment
Þ The covenant against encumbrances
Þ The covenant of further assurance
Þ The covenant of warranty of title
2. Special warranty deeds:
Ø Understandably, the seller may be reluctant to execute a warranty deed and make promises to enforce for acts committed before his or her ownership.
Ø A special warranty deed restricts liability to title defects occurring after the seller acquired title
Ø Although the special warranty deed includes the covenants of a warranty deed, the buyer’s remedy is restricted to covenants that were broken because of events that took place only during the seller’s ownership
Ø Suppose a timber company wants to sell 1,000 acres of land poorly suited to timber reproduction. If the company has reason to suspect that the title may be contested by unknown heirs or former married parties who have not released their claim, a special warranty deed would be advised. The company would accept title responsibility only for acts committed during its ownership. With incomplete knowledge of title before its ownership was acquired the company minimizes risks by conveying under a special warranty deed.
3. Quitclaim deeds:
Ø Among the deeds of conveyance, the quitclaim deed gives the buyer the least amount of title protection.
Ø No covenants are stipulated in this deed. The conveyance language of a quitclaim deed typically reads, “remise, release, and forever quitclaim”.
Ø Under this language, the seller transfers only the interest that he or she holds in the real estate described.
Ø If it is established that the seller had no interest, the buyer has acquired no interest.
Ø On the other hand, if the title is legally enforceable and without defects, the quitclaim deed may give the buyer title as good as that obtained under a warranty deed.
Ø With a quitclaim deed the seller makes no covenants or warranties of title.
Ø The quitclaim deed is most useful in releasing defects in title.
Ø A wife who fails to release her dower interest or a minor coming of an age may be asked to execute a quitclaim deed to release any claims against property conveyed.
Ø Similarly, a corporation that conveyed title with out paper signatures to a deed may relinquish any subsequent claims with a quitclaim deed.
Ø For this reason, most authorities recommend the quitclaim deed to clear up questionable titles.
4. Bargain and sale deeds:
Ø Such deeds fall between the warranty quitclaim deeds. In a bargain and sale deed, the key words required by statute typically read “grant, bargain, and sell.”
Ø The particular state statute identifies the required conveyance words.
Ø The bargain and sale deed conveys the land and not an interest in the land as in a quitclaim deed.
Ø The deed includes no warranties of title.
Ø However, the deed is somewhat superior to a quitclaim deed in that there is an implied assumption that the seller has possession and title.
5. Other deeds:
Ø Executors deeds
Þ The executor operates under the direction of the court.
Þ The title to the real estate of a deceased person who dies without a will or with a will that contains no power of sale will be sold under an executor deeds.
Þ In this type of deed, the full sales price must be stated and the executor warranties title only against his or her acts.
Þ No other warranties are extended by the executor who executes the deed under court approval.
Ø Correction deeds:
Þ In preparing deeds, the misspelling of names, errors in legal descriptions or important omissions are not unusual.
Þ If corrections are made on the original document, questions may be raised about their authenticity.
Þ It is usually impractical to make erasures on or additions to an executed deed.
Þ The best alternative is to execute a correction deed that states something like the following: “This deed is to correct the deed dated---------------between the grantor (seller) -------------------- and the grantee (buyer) ----------------------and recorded in deed book correction deed must conform to the requirements of an enforceable deed and establish the proper chain of title.
Þ The reference to recording refers to a public file containing deeds of record in the county recorder’s or other office designated for this purpose
Ø Sheriffs deeds:
Þ Lenders foreclosing on mortgage must follow statutory requirements that lead to the eventual public sale of foreclosed property.
Þ A foreclosure action may require that the property be sold at a public sale for the benefit of the lender.
Þ Conveyance at a public sale upon foreclosure will be under a sheriff’s deed or its equivalent.
Þ Since the sheriff acts for the public, no warranty or representation may be made on the title. Buyers assume risks of title defects.
Ø Trust deeds:
Þ In the states of
Þ In defect, a deed of trust conveys title to a trustee, a third party who holds the title for the benefit of the lender or the beneficiary.
Þ The borrower (trustor) executes the trust deed in return for a long term loan.
Þ If the borrower defaults on monthly payments, the terms of the deed of trust direct the trustee to transfer title to the lender in satisfaction of the debt.
Þ This procedure sidesteps the lengthier foreclosure procedures that are common to statutes regulating mortgages
Ø Deed of surrender
Ø Committees deed
Ø Deed of gift
Ø Guardians deed
Ø Referee’s deed in foreclosure
Ø Referee’s deed in partition
Ø Cession deed
Ø Deed of release
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