Warranty Deed to Trustee & Land Trust Deed?
Real Estate Investor · Sartell, MN · Member since 2008 · 18 posts · 1 vote
[b]Is the Warranty Deed to Trustee & Land Trust Deed the same in one? If not what is the difference?
Thanks
Curt[/b]
Any takers on this topic?
I'm no lawyer, but I'm going to take a stab on this. I think someone is using terms in the wrong way!
A Warranty Deed transfers both legal title and benficial interest.
A Deed of Trust (Trust Deed) only transfers beneficial interest.
Let's explore the most common usage of the two instruments. A buys a house from B and finances it with a mortgage from C. At closing B issues a Warranty Deed to A giving him legal title to the property. B signs a Deed of Trust to C's Trustee-an unrelated, disinterested third party-usually C's brother in law.
The Trustee only has two jobs, when the loan is retired through amortization or paying off, the Trustee will issue a Release and Reconveyance, which is just a Warranty Deed with no conditions attached to it. Or,
In the event A defaults on the loan the Trustee will (after the proper notices) conduct a Trustee's Sale (that's what foreclosures are called in Trust Deed states.
So I'm not sure how you could (using the correct meanings of the words) have a "warranty deed to trustee".
I'm not familiar with the term "land trust deed". Why not ask whoever it is that is tossing these terms around?
all cash
Thanks for the reply!!
Curt,
I would be interested in knowing what you mean by Land Trust Deed. Similar to All Cash.
It could be a term someone is using to refer to a land trust. Or it could be used by someone in a trust deed state (where they do not use mortgages).
Even if you are not sure what was meant, tell us where you heard the term. The context or situation when the term came up.
John Corey
I am familiar with land trust, and i can tell you one thing, a warranty deed to trustee conveys all rights of the property to the trustee, the land trust agreement itself gives the trustee their directions or limits if you would.
To clear things up a Deed of trust is that sort of the same as a mortgage but used in a trustee state to give the trustee for the lender a power of sale.
there is no land trust deed. On a deed to the trustee whether its a quit claim or a warranty deed and the land trust agreement. I prefer a quit claim deed. in my area there are no transfer stamps to pay.
To clear things up a Deed of trust is that sort of the same as a mortgage but used in a trustee state to give the trustee for the lender a power of sale.
there is no land trust deed. On a deed to the trustee whether its a quit claim or a warranty deed and the land trust agreement. I prefer a quit claim deed. in my area there are no transfer stamps to pay.
Continuing the thread. General comment first.
1. There is no legal entity called a land trust. The phrase is more of a marketing term than anything else. Trusts are just trusts. How and why they are set up sometimes attracts a marketing term but has no meaning in law.
2. SeeMo - What does it mean to say that you prefer a quit claim deed? Prefer it compared to what? A warranty deed or a trust? What state has a transfer tax that you are concerned about? I know some in PA are concerned given the 2% tax there.
Legally there is a very large difference between a quit claim deed and other deeds. In some places title companies will refuse to issue title insurance if a quit claim is used. I thought I also read that in one state they quit claims are no longer allowed. They are a very weak way to transfer title. Some would argue that a quit claim really does not transfer title as it only says the person signing has no future interest in the property. It does not indicate that they had a prior interest so anyone can quit claim anything.
John Corey
Every state is different. Notwithstanding, a grantor of a warranty deed generally warrants the six covenants of title: seisin (old common law word for ownership--"to be seized of the land"), quiet enjoyment, right to convey, freedom from encumbrances, defense of title, and further assurances to perfect title. In contrast, a quitclaim deed simply means the grantor transfers all rights he or she may have in the property, assuming they have any at all. Quitclaim deeds are always suspect when examining title. Most states and counties require any transfer to include stamp taxes based on the value, except to wholy owned subsidiaries. Transfers using quitclaim deeds are often listed as nominal value in an attempt to avoid taxes, but if the authority chose to, they could likely follow up on such transfers and impose taxes and statutory penalties.
Christian,
Great reply. I will work with Josh to get this included in the FAQ.
John Corey
You are also right, that anybody can quit claim anything. QCDs are often used to perfect transfers involving questionable ownership, for example if the rights of ex-spouses, estranged children or sibling heirs are in question, title companies and their underwriters often ask for QCDs from these parties to perfect and guarantee the quality of a transfer.
John Corey
legally if a person quit claims a deed to a property they don't own they will be taking a long vacation, plus to avoid that hassle thats why its good to have title insurance. most things aren't a problem unless you make it one. i recently sold a land trust property that had a quit claim deed and signed a warranty deed to the end buyer, plus i didn't have title insurance when i had the deed quit claimed, still wasn't a problem. if a quit claim was so insignificant they would be outlawed.
SeeMo,
1. As I said before, a land trust is a marketing term. Legally there is no such thing as a land trust. A trust is all that exists. There is no special type called a land trust. A trust is a trust is a trust.
2. If you go back a bit (before your recent post) and read what the lawyer has posted you will see that your understanding of a quit claim is faulty.
John Corey
legally if a person quit claims a deed to a property they don't own they will be taking a long vacation, plus to avoid that hassle thats why its good to have title insurance. most things aren't a problem unless you make it one. i recently sold a land trust property that had a quit claim deed and signed a warranty deed to the end buyer, plus i didn't have title insurance when i had the deed quit claimed, still wasn't a problem. if a quit claim was so insignificant they would be outlawed.
A QCD is fundamentally a transfer of whatever interest you may have, if any. Thus, intent is important. A person can transfer their rights to the Brooklyn Bridge to anybody they want at any time and nobody is damaged. However, 'if you claim ownership of something you do not actually own and attempt to transfer it in exchange for something of value, you have commited fraud and have been unjustly enriched.
A land trust is more than a marketing term. You have different trust so a trust is not just a trust. You have living trust, community trust, corporate trust and illinois land trust. A land trust is an entity that holds real property and turns it into personal property.
If a trust isn't an entity why once you place a property into a land trust personal creditors can't attach their liens to your trust? I have used trust and i know a little bit about them. They may not provide the protection of a LLC or a Corp but it is still a separate entity that can't be sued unless the trustee or trust violated some agreement. Your everyday contractor can't sue your trust if you didn't pay him, he can only sue you for your interest in the trust, if you have any interest.