A deed is a signed legal document that transfers ownership rights in a piece of property from the current owner to the new owner. There are many different types of deeds, and each type of deed has its own conditions to be valid. However, the majority of deeds include the following information:
- A legal description of the property being transferred
- The names of the individuals who are taking part in the transfer of property, including the “grantor” (the seller) and the “grantee” (the buyer)
- The signatures of the individuals who are transferring the deed. It is important to note that a notary public must notarize this signature.
A deed is most commonly used to transfer property ownership during a purchase or sale of a home or when an individual inherits property from one of their family members.
If an individual receives a property deed by any means, they must remember to record it with the local county recorder’s department where the property is located. Although recording a deed is not required by law, not doing so comes with many consequences. For example, an individual who does not record a deed will have difficulty proving they are the true owner of their property. If an individual cannot prove ownership, they cannot sell their property or refinance their mortgage.
What Are the Different Types of Deeds?
Different types of deeds can be used to transfer property interest. The most common are:
Quitclaim deeds are often used to transfer property among family members and to remedy title errors. A quitclaim deed provides the least amount of protection for the buyer. A quitclaim deed does not verify that the grantor owns the property. Quitclaim deeds also do not guarantee no title defects such as tax liens or easements.
A general warranty deed is the most common type used to transfer property ownership, and this is the deed that best protects the buyer. Unlike a quitclaim deed, a general warranty deed does confirm the grantor’s ownership and legal right to sell. It also offers various protective covenants, such as the covenant against encumbrances (there are no tax liens or easements that neighbors can claim) and a covenant of further assurance (stating that the seller will take whatever steps may be needed to clear title),
A special warranty deed provides the buyer protection with two specific guarantees:
- It guarantees that the grantor does hold the title to the property and has the right to sell it
- It guarantees that no liens or encumbrances existed on the property while the grantor owned it.
However, a special warranty deed does not include any guarantees regarding encumbrances that may have been associated with the property before the current owner’s use.
What Are the Differences Between a General Warranty Deed and a Special Warranty Deed?
A special warranty deed guarantees that the seller did not incur any defects to the title when they owned the property (such as liens or encumbrances). However, it is important to note that this does not guarantee the title is free of any defects that may have been incurred before the seller acquired the property. If a buyer accepts a special warranty deed, they are not guaranteed a clear title and may be required to resolve any disputes that arise for possessing the potentially unclear title.
A general warranty deed does not have any of these defects. It is always best for the buyer to obtain a general warranty deed if possible. There may be cases where a special warranty deed is acceptable, such as when a piece of property has been in a family for many years, and the chain of ownership is well known. A general warranty deed, however, provides the buyer the best assurance that they will not have a future title dispute.
What Is a Title Dispute?
A title dispute is a disagreement over who owns or has rights to a specific property. A title dispute can arise in several ways. For example, a warranty deed dispute could arise because of:
- A forged deed
- A fraudulent deed
- A competing deed
- An unrecorded deed
- A faulty deed
A warranty deed dispute may arise if two people plan to own a property, but only one buys it because the other has a poor credit history. The mortgage and the deed are likely to be in the name of the person who could afford the loan. The other party will want to challenge the terms of the deed.
What Is a Chain of Title Dispute?
The chain of title refers to the entire history of the ownership of the property, right back to its original owner. A problem arises if a third party disputes the chain and asserts that they are the true owner of the property. The current owner of the property will be required to conduct a title search to determine if the third party has a valid claim.
In most cases, when an individual purchases a home, a chain of title search is performed before closing precisely to ensure that a chain of title dispute will not arise. For a small fee, the buyer may also buy title insurance to provide extra protection.
How Do I Check to See If My Property Has a Title Dispute?
The best place to begin is the local county clerk’s record office. If you have recently purchased the property and have not recorded the title, it is essential to do so to prevent any future disputes.
The deed records will reveal any information that may affect your property rights. The best place to start searching for any title disputes is to review the history of the transfer of title of the property from one party to another. A title search will reveal if there are any disputes, mortgages, or liens or if any easements exist.
Reading the history of a piece of property is tedious and very technical. If you are unsure about this process, title search services are available that complete the task for a fee. Additionally, a real estate attorney will be familiar with the process and able to advise you on how to perform the title search or will provide the title search service themselves.
It is best to purchase title insurance and ensure you receive a warranty deed at the time of purchase to reduce the risk of a dispute. A title insurance company will ensure the title is free and clear of any other interests before purchasing the property. The insurance policy may also require the title insurance company to provide a legal defense if a future boundary dispute arises.
Should I Contact a Real Estate Attorney About a General Warranty Deed?
Yes, it is essential to have the help of an experienced real estate attorney with any deed issues. Purchasing a home or a piece of property is often one of the most expensive investments you will make during your lifetime, and you will want to ensure that all your rights are protected.
By having an attorney involved from the beginning, you may be able to avoid any title issues or disputes. Should a dispute arise, an attorney can review important documents, and represent you during any court proceedings, if necessary.
