The Real Estate Attorney’s Guide to Deeds

Any Real Estate Attorney can tell you that deeds are critical to transferring ownership of real property. However, there is more than one way for a property to change hands legally, and it is vital to know when these options should be employed.

Broadly speaking, a deed is any legal instrument that conveys real property from one party to another. Whether you are purchasing a property or are being gifted one, you will need to sign some type of deed prepared by a Jurado & Farshchian Real Estate Attorney that recognizes the transfer and your subsequent legal ownership (e.g., the title to the property).

However, even something as seemingly straightforward as a property transfer has legal nuances that are crucial to understand. There are in fact three main types of deeds used in real estate transfers, each with their own legal implications and purposes. That is why it is advisable to hire a Jurado & Farshchian Real Estate Attorney who understands these differences and knows which kind of document to prepare based on the circumstances.

Warranty Deed

Sometimes called a General Deed, a Warranty Deed is the most common type of deed you will come across, especially in property sales. It is so named because when the seller (called the grantor) transfers title to the property to the buyer (the grantee), they “warrant” that they legally own the property and that it is free and clear of all liens (such as claims from lenders or other creditors).

Bear in mind that a Warranty Deed is not a sales contract, even though it is among the documents you will be signing at a real estate closing. Whereas a contract is an agreement to convey the property in exchange for something (usually money), the Warranty Deed is the conveyance itself. So even if you fulfill all other obligations in the contract, including paying the purchase price in full, you still will not have actual ownership until the deed is signed and recorded.

The reason a Warranty Deed is more common and preferred in real estate sales is because it promises the buyer that the seller is the rightful owner of the subject property, has the right to transfer title to the property, and that the property is not tainted with any legal or financial liabilities. Aside from being guaranteed by the deed itself, these claims are backed up by a title insurance policy that protects the buyer from any claims or liens that may emerge after the transfer.

Special Warranty Deed

Like a Warranty Deed, a Special Warranty Deed guarantees that the title to the property being conveyed is clear of any issues or claims — however, only during the time period in which the grantor owned the property, rather than for the property’s entire title history.

So contrary to what its name may suggest, a Special Warranty Deed is not of a better quality than a regular Warranty Deed — in fact, it offers less protection since the grantor is liable only for the claims, debts, and other issues they caused or that occurred during their tenure. Any title or ownership issues that occurred before are not covered.

Special Warranty Deeds are more common in sales of properties owned by banks or transactions involving parties that have an existing professional or personal relationship. For obvious reasons, they are also used by sellers who are not entirely confident about the title history of their property — something that should give you pause if the property is residential, or if the grantor is not someone you know and trust.

Quitclaim Deed

This type of deed offers the least protection of the three and is thus rarely used in transfers that involve strangers or the exchange of money. While it also legally transfers title to the property from one party to another, it offers no guarantee that the grantor is the legal owner or that they have the right to transfer the property. There is no claim that the property is clear of title problems and no recourse if any such problem emerges.

For these reasons, a Quitclaim Deed is used only in a select few transfers involving close associates or relatives. These include cases when the owner dies and bequeaths the property to an heir, when a spouse is added to the title, when an ex-spouse is removed from the title after a divorce, or when the property is being conveyed to a trust.

Outside of these scenarios, a Quitclaim Deed may sometimes be used in a real estate transaction in which the seller is not sure about the ownership of part of the subject property. Typically a Warranty Deed will be executed for the main property while a Quitclaim Deed is used for the ambiguous portion.

Do Not Sign or Prepare a Deed Without a the Assistance of a Qualified Real Estate Attorney

Knowing which deed to use and when is crucial to protecting yourself from any liabilities. Even with the full protection provided by a Warranty Deed, there is always a chance that the information stated or guaranteed therein turns out to be false or erroneous. You should never agree to sign a deed, let alone create one, without the help of a qualified Real Estate Attorney.