Understanding Real Estate Deeds

A real estate deed is the legal document that dictates who owns a piece of property. A real estate deed grants ownership rights in the property to another person because it symbolizes the transfer of ownership. Generally, a real estate deed will include the party names, real estate description, and signature. However, you should check with your state’s laws to determine if there are any special requirements for real estate deeds to ensure it is a valid and legal document.

Having a lawyer for property deeds is important because a lawyer can draft and review the deed to ensure it will be binding and complies with all applicable laws. Having a lawyer for property deeds provides an extra layer of protection for each party and will keep deed transfer transactions running smoothly. Additionally, if any conflicts arise a lawyer can help handle them and reach a conclusion.

What Are the Main Types of Real Estate Deeds?

There are different types of real estate deeds that will hinge on what rights the party owning the property is transferring. Three main types of real estate deeds are:

1. General Warranty Deed: In addition to transferring ownership to the real estate in its entirety, this deed promises clear and free title. This deed will generally account for compensation where promises about title turn out to be false.
2. Quitclaim Deed: This type of deed will transfer whatever ownership rights currently exist in the real estate, even when it is unclear what those rights are exactly. This means that there could be other partial owners on the property or unknown liens.
3. Grant Deed: In addition to transferring ownership interest to the real estate, this type of deed generally contains a promise that the current owner did not previously transfer the real estate to someone else.

To help illustrate the three main types of real estate deeds, here are a few examples. Say a person has a written trail proving they are the sole owner of a house and that three prior liens were paid and satisfied and full. The person transfers the house to another party via general warranty deed granting full ownership rights and promising free title. If down the road, the person finds out there was a fourth unpaid lien then the original title holder will need to compensate them accordingly.

In the same scenario, the homeowner includes in the deed that there were no previous transfers but does not make absolute promises about free title. This would be an example of a grant deed. It would be prudent to run a title search before completing the real estate transfer to determine if there would be any obligations after the property transfer occurs.

Lastly, say someone with a real estate interest wants to get rid of their ownership rights fast and is unclear about the chain of title. They transfer the deed to their cousin via quitclaim deed with no other promises. The cousin would then get whatever rights the person had and no promises of free title or that there were no previous transfers. Unsurprisingly, this type of deed can cause the most challenges down the road.

Other deeds besides these common ones include special warranty deeds, fiduciary deeds, and trust deeds. Talking to a lawyer will help you determine which type of deed is the best way to transfer real estate ownership interests in your particular situation.

What Does “Deed Review” Mean?

Deed review refers to the process of a third party looking over a deed before executing the transfer. This will generally be a real estate lawyer or other experienced real estate professional. However, real estate agents are generally not equipped to do as thorough of a deed review as an experienced lawyer could provide.

Deed review is important because it checks that the specific deed contains all relevant information, complies with state law, and will be enforceable by the courts. Deed review provides an opportunity to catch mistakes and correct them before executing the transfer and recording the deed with the appropriate county office. If mistakes are not caught before transferring property and recording the deed, both parties can face a lot of issues and liabilities down the road.

How Are Real Estate Deed Disputes Handled?

Real estate deed disputes can occur in a variety of situations, but most commonly occur with deeds that do not offer as many protections as a general warranty deed. Disputes generally focus on there not being clear title or promises made that turn out to be untrue.

Here is one example of a deed dispute that could arise involving a quitclaim deed. Take the previous scenario where a person quickly transfers a real estate interest to their cousin via quitclaim deed. Come to find out there is a third party who says they have interest in the real estate and wants to dispute the transfer as invalid. Common assertions by the third party could include forgery, no signature present that would legally execute the deed, or fraud.

In order to handle this dispute you would need to present as much evidence to support validity of the transfer. Having the deed recorded would be best, but if this did not occur other helpful evidence would include written communication, witnesses to the actual transfer, and proof of the original transfer to show how much title or interest existed before the quitclaim deed occurred.

An easier real estate deed dispute to handle would be with a general warranty deed claiming there were no liens on the real estate. If after the transfer it comes up that there was a lien, the grantor would need to pay it off and compensate the homeowner according to the applicable state laws. These disputes are fairly easy to handle since general warranty deeds offer the most protection to buyers.

How Can Real Estate Deed Conflicts be Prevented?

In order to prevent future conflict over a real estate deed, documentation is crucial. It is always important to ensure everything is in writing so there is proof of action if and when a conflict arises. Offering up a contract or agreement outlining the terms of a transfer and how to handle future disputes will help prevent conflicts and better navigate those that arise.

Another ways to prevent conflicts include running a title search. This will confirm that the seller legally owns the real estate. It will also reflect any co-owners, liens, or other things that could cloud title like fraud. Purchasing title insurance will also provide another layer of protection for the buyer.

Are There Any Legal Remedies for Real Estate Deed Disputes?

There are several remedies that can apply when dealing with a real estate deed dispute. This includes:

• Compensation to remedy an unknown lien or other defect, depending on the type of deed involved;
• Other monetary damages for economic losses suffered;
• Equitable remedies where there are boundary disputes with a neighboring property. For example, a court could order the homeowner to move a fence if the property was incorrectly described on a deed.

Should I Hire a Lawyer for Help with Real Estate Deed Issues?

There are several benefits of hiring a real estate lawyer for deed transfers. Having an extra layer of protection ensures that all laws are followed and mistakes are corrected before it is too late. 

A property lawyer can research all requirements, negotiate, draft the deed, and represent you in court if necessary. A lawyer can also help sellers decide the best type of deed transfer to perform depending on the circumstances of the sale.