Types of Deeds

Types of Deeds

This is not a good deed vs. bad deed conversation.  This is a discussion of the different types of deeds whereby individuals can transfer and take title to real estate.  The original gold standard for most of us in this country, based upon well-established, English jurisprudence, is a General Warranty Deed to transfer fee-simple, absolute title.  This is an indication that the Grantor or Seller is warranting (guaranteeing and promising) that they have good title to the land and are transferring to the buyer that same good title, that they are lawfully vested in it, that there are no liens or encumbrances preventing the transfer, and that no one else has a claim to it other than the sellers in that transaction.

Another type of deed is the Limited Warranty Deed, which has risen in popularity due to the slight foreclosure housing crisis which began 10-12 years ago.  Institutions who took back property via foreclosure are selling the properties to the next buyer using a Limited Warranty Deed.  A Limited Warranty Deed indicates that they are only warranting title for as long as they were the owner and are not warranting the quality of the title by which they received the property.  When someone wants to transfer title to you via a Limited Warranty Deed, absolutely insist that they, as the seller, pay for an owner’s title policy.  If you are dealing with First American, see if you can get what they call an “Owner’s Eagle Policy” which has the highest level of coverage available under First American.

A type of deed that is frequently talked about and horribly misunderstood in the real estate space is the Quit Claim Deed (not “Quick” Claim Deed, as it is so often inaccurately called).  A “Quit” (as in “stop”) Claim Deed is someone saying that they are only transferring whatever right, title and interest they may have, whether everything or nothing, to someone else, so that person cannot accuse them of not giving them good title, and they are not warranting or making any promises with the transfer.

I have often used Quit Claim Deeds to clean up confusion regarding title when a buyer on a Land Installment Contract or Contract for Deed has failed to fulfill the contract.  After making several payments whereby they might have an equitable interest in the property, we will get a Quit Claim Deed from them back to the original owner/seller.

The last deed I want to mention is what we refer to as a Fiduciary Deed.  This is a deed whereby someone is signing in their capacity as a fiduciary.  The two most common uses of this type of deed are when someone is signing a deed as a Trustee on behalf of a Trust, and when property is being sold out of an estate.  If someone is signing as a Trustee of a Trust, or they are the personal representative or executor of an estate, they are acting as a fiduciary and are thereby giving a Fiduciary Deed based upon their court-appointed powers.

I hope this overview of the various types of deeds to convey real estate has been helpful in clarifying the differences in the deeds and how they should be used.