Although the terms title and deed are considered to be interchangeable when purchasing a house, they are actually two separate concepts.
The term “title” to property refers to the legal rights that an owner has over their property. Title rights:
- Provide the owner access to the property;
- Allow the property owner to sell or transfer it to other parties; and
- Enable the property owner to enjoy and use the property in any legal way that they see fit.
The “deed” is the actual, physical, written legal document which transfers the title rights. Another way to describe this would be how when a party wants to sell or transfer the title to their property, they must create a deed in order to do so. The deed will be given to the buyer at the closing sale, at which point they should immediately file it with the office of the county clerk in which the land or real estate is located.
There are many different types of deeds, the requirements of each varying by jurisdiction. However, the following is a general description of some of the most common types of deeds:
- Quit Claim Deed: A quit claim deed transfers the grantor’s legal rights to the grantee, in terms of rights to the parcel of real property. A quit claim deed makes no warranty regarding the extent of the grantor’s interest in the parcel of real property, and does not provide much protection to the grantee should any legal issues arise;
- Grant Deed: A grant deed transfers all or part of the legal rights the grantor has to the grantee. This type of deed implies two specific warranties. One, that the property has not been transferred to someone else. Two, that the property is free from any liens placed on the property by the grantor;
- General Warranty Deed: A general warranty deed transfers all of the legal rights the grantor has to the grantee, and explicitly warranties that the grantor has good title to the parcel. General warranty deeds will be further discussed below;
- Special Warranty Deed: A special warranty deed transfers all of the legal rights the grantor to the grantee, but warranties only what the deed specifically states is warranted. What this means is that there is little protection against anything that was not stated in the deed;
- Fiduciary Deed: A fiduciary deed is used to transfer property when the grantor is a fiduciary. An example of this would be a trustee, guardian, conservator, or executor acting in their official capacity. A fiduciary deed generally only warranties that the fiduciary is acting in their appointed capacity, and within their allotted authority; and
- Trust Deed: A trust deed is a written instrument which transfers property to a trustee. This is done in order to secure an obligation, such as a promissory note or a mortgage. The trustee has the power to sell the real property if there is a default on the obligation.
What Is A General Warranty Deed?
Warranty deeds provide the purchaser of property with the highest level of legal protection. As such, they are frequently utilized when a buyer wants to obtain financing, such as for a mortgage or title insurance.
A warranty deed guarantees that:
- The grantor is the rightful owner of the property, and as such has the legal right to transfer the title to someone else;
- The property is free and clear of all liens, as well as outstanding claims;
- The title remains if a third-party claims ownership of the property; and
- The grantor will take reasonable action in order to ensure the grantee’s title to the property.
If title problems present themselves after signing a warranty deed, the buyer can legally sue the seller. This is because they are legally responsible for any breach of warranty or guarantee.
It is important to note that there are two types of warranty deeds, which offer differing levels of protection to the buyer and risk to the seller. These two types are general warranty deeds and special warranty deeds.
A general warranty deed is a specific type of warranty deed in which the grantor (or, the person with ownership interest) guarantees that they hold a clear title to a piece of real estate. Some states refer to a general warranty deed as a “grant deed.” The grantor not only guarantees that they received a clear title from the previous owner of the property, but also that no other individuals, past or present, retain an interest in the property.
If the title is later discovered to be defective, or has a “cloud” on it, the grantor may be held liable to the person who purchased the property. Some common examples of defects in title include:
- Mortgage claims;
- Tax liens;
- Title claims;
- Judgments; and
- Mechanic’s liens.
A person who makes a general warranty is referred to as the grantor. As the grantor, they promise many things, both now and in the future. These promises are known as covenants; if these covenants are broken, the person who is making the promises can be held liable.
Some examples of present covenants include, but may not be limited to:
- The grantor states that they are the owner of the property in question;
- The grantor states that they have the right to convey the property, or, transfer title to another person; and
- There are no encumbrances on the property, other than those that have been previously disclosed.
Some examples of future covenants include, but may not be limited to:
- The grantor has superior title against all others, meaning that
- Warranty against future encumbrances; and
- Quiet enjoyment of the property, which refers to the right of a property owner to legally use their property as they wish, without disturbance.
How Is A General Warranty Deed Obtained?
As previously mentioned, the laws and processes associated with deeds vary from state to state. They may even vary by jurisdiction. Generally speaking, you can obtain a warranty deed through your real estate agent’s office. Alternatively, you may download an online template.
All warranty deeds, regardless of method or locality, must include the following information:
- The date of the transaction;
- The names of all of the parties that are involved in the transaction;
- A detailed and accurate description of the property that is being transferred; and
- The signatures of the buyers, which must be notarized in order to make it legally binding.
What Is A Title Search, And How Is It Associated With A General Warranty Deed?
A title search involves reviewing files from the county records department in order to see a particular property title’s ownership history. This search is generally conducted by a commercial agent, such as a title company, a real estate attorney, or an escrow officer.
The types of records that will be reviewed include, but may not be limited to:
- Deeds;
- Court records;
- Name indexes; and
- Property indexes.
The purpose of a title search is to confirm that the seller is the actual, legal owner of the property that is being sold. Because it can ensure that the title is not clouded by a defect that could reduce the value of the land, or would expose the buyer to some sort of legal liability, it is part of the process of establishing a general warranty deed.
If a buyer has title insurance, the agent who is conducting the search must determine whether the title insurance company will insure the title as part of the search process.
Do I Need An Attorney To Obtain A General Warranty Deed?
If you are considering purchasing a piece of property, or wish to obtain a general warranty deed, you should consult with an experienced and local real estate lawyer. An attorney will be best suited to help you understand your state’s laws regarding the matter, as well as what your locality’s process is for obtaining a general warranty deed.
Additionally, your real estate attorney can also represent you in court, as needed, should any issues arise.
