Components of Deed
Updated on : March 15, 2023 - 1 p.m. 17 min read.
A deed is a legal document that serves as evidence of the transfer of ownership of a property or asset from one party to another. It is commonly used in real estate transactions, where a seller transfers ownership of a property to a buyer in exchange for payment. A deed typically contains the names of the parties involved, a legal description of the property, the purchase price or consideration, and the signatures of the parties involved. There are several types of deeds, including warranty deeds, quitclaim deeds, and special warranty deeds, each with their own specific legal implications and requirements.
Components of Deed
A deed is a legal document that transfers ownership of a property from one party to another. It typically includes the following components:
- Heading: This includes the name of the document, such as "Warranty Deed" or "Quitclaim Deed."
- Title of the Property: The full and accurate legal description of the property being transferred.
- Grantor: The party who is transferring ownership of the property.
- Grantee: The party who is receiving ownership of the property.
- Consideration: The amount of money or other consideration that is being exchanged for the property.
- Signature of Grantor: The grantor must sign the deed in the presence of a notary public or other authorized witness.
- Delivery: The deed must be delivered to the grantee to be legally effective.
- Habendum Clause: This clause defines the type of ownership being transferred, such as fee simple or life estate.
- Covenants: The deed may include various covenants, such as the covenant of seisin (warranty that the grantor owns the property), the covenant of quiet enjoyment (warranty that the grantee will not be disturbed in their ownership), and the covenant of further assurance (promise by the grantor to take any additional actions necessary to ensure the transfer of ownership is complete).
- Exceptions and Reservations: Any exceptions or reservations to the transfer of ownership must be clearly stated in the deed.
- Acknowledgment: The grantor must acknowledge that they signed the deed voluntarily and that they understand the contents of the document. This acknowledgment is typically made in front of a notary public or other authorized witness.
The components of a deed typically include a heading, date, grantor, grantee, consideration, legal description of the property, habendum clause, exceptions and reservations, covenants, signature of the grantor, and delivery and acceptance. These components may vary depending on the type of deed and the jurisdiction in which it is executed.
Kinds of Deed
There are several types of deeds used in real estate transactions. The most common types of deeds include:
- Warranty Deed: This type of deed provides the greatest amount of protection for the grantee (buyer) because the grantor (seller) warrants that they own the property and have the right to transfer it. The grantor also warrants that there are no outstanding liens or encumbrances on the property, except those specifically stated in the deed.
- Quitclaim Deed: This type of deed conveys whatever interest the grantor has in the property, but does not provide any warranties or guarantees as to the validity of that interest. Quitclaim deeds are often used to clear up title issues or to transfer property between family members.
- Special Warranty Deed: This type of deed provides some protection for the grantee, but only covers any defects or encumbrances that arose during the grantor's ownership of the property. It does not cover any defects or encumbrances that existed prior to the grantor's ownership.
- Bargain and Sale Deed: This type of deed conveys the property from the grantor to the grantee, but does not provide any warranties or guarantees as to the validity of the grantor's interest in the property.
- Deed in Lieu of Foreclosure: This type of deed is used when a borrower is in default on a mortgage loan and voluntarily transfers the property to the lender in order to avoid foreclosure.
- Trust Deed: This is a type of deed used in some states instead of a mortgage. It conveys legal title to the property to a trustee, who holds the title as security for the repayment of a loan.
These are some of the most common types of deeds used in real estate transactions. The type of deed used depends on the circumstances of the transfer of ownership and the laws of the jurisdiction in which the property is located.