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A deed is the legal document that passes ownership in real estate from one person to another. Essentially, when real estate is sold or given to someone, the transfer is accomplished through the execution of a deed. The new property owner acquires the rights to the property and any title warranties given by the previous owner by way of the deed.
For a deed to be legally sufficient, it must identify the grantor and grantee, and include an adequate description of the property.

While each state has its own requirements, most deeds must contain several essential elements to be legally valid:

  • The deed must be in writing. although most deeds are drafted on printed forms, there is no legal requirement that a specific form be used as long as the essential elements are included in the deed.
  • The grantor must have the legal capacity to transfer the property and the grantee must be capable of receiving the grant of the property. Generally, anyone who is competent to execute a valid contract is considered competent to be a grantor.
  • The grantor and grantee must be adequately identified in a way that they are ascertainable.
  • The property must be adequately described in the deed.
  • There must be operative words of conveyance. All standard form deeds include the necessary legal language that actually transfers the property.
  • It is required that the deed be signed by the grantor or grantors if the property is owned by more than one person.
  • The deed must be legally delivered to the grantee or to someone acting on the grantee's behalf.
  • The deed must be accepted by the grantee. While deeds are generally accepted by the grantee there are certain situations where a grantee may choose to reject delivery of the deed.

Types of Deeds

A Deed can be either an official deed or a private deed. Official deeds are executed pursuant to a court or legal proceeding. Most real estate transactions, however, involve individuals and business entities using private deeds.

There are a number of different types of deeds. Most deeds are categorized depending on the title warranties provided by the grantor. They include

General Warranty Deed

This is the most common deed used to convey real estate and also the deed that affords the grantee (the buyer) the most protection of all the different types of deeds. With a general warranty deed, the grantor ( seller) guarantees that clear title is held to the real estate being conveyed and has a right to sell it to the grantee. The grantor also guarantees that, during their period of ownership of the real estate, they did not encumber the property in any way that prohibits its transfer. Nor did they Incorporate express references to any easements, restrictions, or other agreements of record related to the parcel of land, into the text of the deed. Furthermore, the grantor warranties to the grantee, and their heirs, to protect the grantee against any prior claims and demands of all persons with regard to the property conveyed.

Special Warranty Deed

While the grantor of a general warranty deed promises to warrant and defend the title conveyed against the claims of all persons, the grantor of a special warranty deed only warrants that they received the title to the property and that they have not done anything while holding the title to create a defect.

With a special warranty deed only defects that arose during the grantor's ownership of the property are warranted. Consequently, this type of deed affords the grantee (buyer) less protection than the general warranty deed. Many attorneys representing real estate buyers will insist on the conveyance of a general warranty deed to protect against problems that could arise as a result of a special warranty deed.

Quitclaim Deed

The quitclaim deed, commonly referred to as a non-warranty deed, offers the grantee (buyer) the least amount of protection. This type of deed conveys whatever interest the grantor currently has in the property, if any. There are no warranties or promises provided with regard to the quality of the title. Should the grantor have good title, the quitclaim deed is for the most part as effective as a general warranty deed. However, in cases where the title contains a defect, the grantee has no legal recourse against the grantor under the quitclaim deed. A quitclaim deed is commonly used when the grantor is not sure of the status of the title or whether there are any defects on the tile. A quitclaim deed may also be used in situations where the grantor simply wants no liability under the title covenants.

Without any warranties, the grantee has little or no legal recourse against the seller if a problem with the title arises in the future. This lack of protection makes a quitclaim generally unsuitable when purchasing real property from an unknown party in a traditional sale. It is, however, a useful when conveying property from one family member or spouse to another. Quitclaim deeds are also commonly used in divorce proceedings or for estate planning purposes.

Special Purpose Deeds

Special purpose deeds are often used in connection with court proceedings and situations where the deed is from a person acting in an official capacity. Most special purpose deeds offer little to no protection to the grantee and are basically a type of quitclaim deed. There are a number of different types of special purpose deeds including:

Administrator's Deed

This is used to convey property when a person has died without a will – intestate. A court appointed administrator will dispose of the decedent's assets and may use an administrator's deed to transfer the title of real property to the grantee.

Executor's Deed

This is similar to an Administrator’s deed accept this is used when a person dies with a valid will -testate. The estate's executor will dispose of the decedent's assets and an executor's deed may be used to transfer the title or real property to the grantee.
Sheriff's Deed: This is used to convey property to the successful bidder at an execution sale, usually held in the form of an auction, to satisfy a judgment against the owner of the property. The grantee receives whatever title the judgment debtor has.

Tax Deed

A tax deed conveys ownership of a property to a municipality when the property owner fails to pay the taxes due on the property. A tax deed gives the government the ability to sell the property to collect the delinquent taxes and transfer the property to the purchaser.

Deed in Lieu of Foreclosure

The borrower who has defaulted on a mortgage conveys the property directly to the lender as an alternative to foreclosure proceedings. If the lender accepts the deed in lieu of foreclosure, the loan is terminated. Many lenders however prefer to foreclose in order to clear up the title.

Deed of Gift

Also known as a Gift Deed, is used to convey the title on real property when no consideration or only token consideration is given.

Correction Deed

A correction deed is used to correct an existing title, not to pass title on its own. Once a deed is recorded, it becomes part of the public record and cannot be changed. It is possible, however, to amend that record by adding a newly executed deed. The correction deed perfects an existing title by removing defects.

A corrective deed is commonly used for minor mistakes, such as misspelled or incomplete names, omission of marital status, or missing or wrong middle initials. It may also be used to correct obvious errors in the property description such as errors listing a lot number or designation; errors incorporating a recorded plat or deed reference; errors transcribing courses and distances; or where exhibits that supply the legal description of the property have been omitted. A correction deed can also amend defects in the execution or acknowledgement of the original deed.

A correction deed confirms the covenants and warranties of the prior deed. Generally, the parties who signed the prior deed must sign the correction deed in the presence of a notary.

In summary, different deeds provide different levels of protection to the grantee of the deed and establish different obligations for the grantor of the deed. The law pertaining to deeds and the conveyance of property can be complicated. A mistake on a deed can end up costing a buyer or seller a substantial amount of money. In light of the complexity, it is always best to consult with a qualified real estate attorney when transferring real estate or selling or purchasing a home.