What is a Deed?
A deed is the document showing legal proof of ownership for land or property. It contains information about the current owner, the person or entity that sold it to them, and a physical description of the property.
The deed is an essential part of the conveyance process, which entails everything involved in closing a deal—from establishing a sale price and closing date to conducting a title search and filing the deed.
On your deed, you’ll see the terms grantor—which means the selling or transferring party—and grantee, or the person buying or taking claim of the property.
There are several deed classifications, which affect how much protection the buyer receives and which legally binding guarantees—called warranties and covenants—are included when ownership is transferred.
What Is a Warranty Deed?
Most deeds are warranty deeds, which come in two varieties: general warranties and special warranties. General warranty deeds offer the maximum level of protection through a series of covenants that cover everything in the property’s past and any claims or issues that might arise in the future.
The covenants that cover present-day guarantees are:
- Covenant of right to convey: The owner holds a valid, legal title and can transfer it.
- Covenant of seisin: The owner has legal right to convey the property.
- Covenant of encumbrances: The title has no encumbrances other than what is already stated on the deed. Encumbrances can be financial in nature, such as liens, or non-financial, such as easements).
The covenants that cover future guarantees are:
- Covenant of warranty: The grantor will protect the grantee against any party that may challenge the title or place an encumbrance on it.
- Covenant of quiet enjoyment: The grantee will not be removed from the property because of a defective title.
- Covenant of future assurances: The grantor will take proactive steps to fix any title issues.
In contrast with the general warranty deed’s broad protections, the special warranty deed only offers protections for claims or encumbrances that incurred while the seller owned the property. Thus, most residential real estate buyers require the protections offered by the general warranty deed. Special warranty deeds are most commonly used during:
- Estate sales and transfers, when the grantee has a high degree of familiarity with the grantor and is often family. In many situations, the transaction is often done between a will executor and a trust manager, and neither party will be claiming the property.
- Foreclosure sales, when a buyer is purchasing property from a bank or mortgage lender after foreclosure.
What Are Quitclaim Deeds?
Deeds that offer no warranties are known as quitclaim deeds. They offer almost no protections—instead, they merely stipulate that the grantor is conveying any claim they have on the property to the grantee. There is no legal recourse for a title defect or if another party makes a claim on the property.
What Is a Special Purpose Deed?
Special purpose deeds involve a third party who has temporarily taken claim of the title due to instances like the death of the grantor or a financial lien. Usually, these deeds result from a legal proceeding, and—like quitclaim deeds—offer few or no protections for the grantee. These deeds include:
- Tax deeds
- Deeds in lieu of foreclosure
- Sheriff’s deeds
- Executor’s deeds
- Administrator’s deeds.
What Is a Deed of Trust?
A deed of trust, or trust deed, is similar to a mortgage document for a property sale. A typical mortgage document contains a warranty deed, but a deed of trust gives more power to the lender in a property loan—and that power comes from a trustee (typically a title company).
When the deed of trust is signed, the trustee receives a conditional title or a lien on the property from the borrower. The trustee then acts as an agent on behalf of the lender, and the lender is named as the beneficiary on the deed of trust. If the borrower defaults on a deed of trust, the lender can immediately foreclose on the property due to the deed’s power-of-sale clause. This grants the lender the right to have the trustee put the property up for sale without a court order.
So long as the borrower is current on their payments, they still retain a full equitable interest in the property. Deeds of trust are used in lieu of mortgages in many U.S. states, including California, Colorado, Virginia, Texas, Maryland, Tennessee, and Oregon.
Official vs Private Deeds
Most deeds are private deeds, because any transaction between individual buyers and sellers is handled via a private deed. A special purpose deed, however, is an official deed, which is the result of some kind of court action. These are used whenever local, state, or federal government get involved.
Typically, official deeds involve a lien or claim on the property or property owner for back taxes, and the court takes possession via force of law.
Legal Standards for Deeds
To be considered legally binding, all deeds must be in writing and signed by both parties. (If there are multiple grantors or grantees, all of them must sign the deed.) And all parties that sign a deed must be considered legally competent in order for the deed to be legally valid.
Keep in mind that each state has small differences in their legal requirements for deeds—but these core elements are common among all.
How to Get a Copy of Your Deed
Deeds are typically recorded in the county in which the property is located. Your county’s Register of Deeds can issue a copy of your deedto the legal property owner.
Deed vs. Title
A deed and a title are not the same—but when it comes to real estate, the title can be considered a subset of the deed. Where the title gives its holder legal rights to reside on and modify the property, the deed covers other legal obligations of the buyer and seller.
Every deed has a title component, which is why real estate buyers generally get title insurance. Title insurance tasks a third party with looking up any liens or outside claims that may exist on the property. It’s not foolproof, but protects the vast majority of defects that may occur—like a long-lost relative claiming ownership.
For an automobile, RV, or trailer, a title alone is enough to convey ownership.