Deeds

Throughout this volume, we have examined how ownership interests arise, how they are divided, how they may terminate, and how they may even be acquired by operation of law through doctrines such as adverse possession.

The most common method of transferring ownership, however, is neither inheritance nor adverse possession.

It is voluntary conveyance by deed.

A deed is the principal legal instrument used to transfer an interest in real property from one person to another. Nearly every residential purchase, commercial transaction, gift of land, trust funding, and estate distribution ultimately depends upon a valid deed. Although the requirements vary somewhat among jurisdictions, a valid deed generally must satisfy statutory and common-law requirements concerning execution, delivery, and acceptance.

Understanding deeds is essential because every subsequent chapter—including recording acts, chain of title, title insurance, and mortgages—builds upon the legal consequences of a properly executed conveyance.

A deed is a written legal instrument through which one party transfers an interest in real property to another.

The person transferring the interest is the grantor.

The person receiving the interest is the grantee.

Unlike a contract to purchase real estate, a deed is the document that actually conveys title. A purchase agreement establishes contractual obligations between the parties, but the deed is the instrument that ordinarily transfers ownership. After closing, the purchase contract generally merges into the deed, and the parties' rights concerning title are ordinarily governed by the deed itself. (Legal Information Institute)

Every real estate transaction depends upon certainty of ownership.

Without a reliable method of transferring title, buyers could not confidently purchase property, lenders could not safely extend mortgage financing, and title companies could not insure ownership interests.

Deeds serve several important functions.

They:

• transfer ownership;
• identify the parties;
• describe the property being conveyed;
• establish the type of ownership transferred;
• define warranties of title, when applicable;
• become part of the public land records after recording.

Because deeds form the foundation of the public recording system, they are among the most important legal documents in property law.

Although requirements differ among jurisdictions, a valid deed generally contains several essential elements.

Competent Grantor

The grantor must possess legal capacity to transfer the property interest.

Identifiable Grantee

The grantee must be sufficiently identified to determine who is receiving the interest.

Words of Present Conveyance

The deed should contain language demonstrating the grantor's present intent to transfer title, such as "grant," "convey," "transfer," or similar language recognized by applicable law.

Adequate Legal Description

The property must be described with sufficient certainty to identify the land being conveyed.

Grantor's Signature

A valid deed ordinarily must be signed by the grantor. Many jurisdictions also require notarization or acknowledgment before recording. Requirements vary by state.

Delivery

The deed must be delivered with the intent that it presently operate as a conveyance.

Acceptance

The grantee generally must accept the conveyance, although acceptance is often presumed when the transfer benefits the grantee.

Every deed involves two principal parties.

Grantor

The grantor is the person conveying the property interest. The grantor must possess whatever interest the deed purports to transfer.

Grantee

The grantee is the person receiving the conveyed interest. Accurate identification of both parties is essential because ambiguity may create disputes regarding ownership.

One of the most important components of a deed is the legal description.

A street address alone is generally insufficient because addresses may change or fail to identify the precise boundaries of the property.

Common methods of legal description include:

• metes and bounds;
• lot and block descriptions;
• Public Land Survey System (government survey descriptions), where applicable.

A proper legal description allows the land to be identified with reasonable certainty.

Execution of a deed alone does not necessarily complete the conveyance. Property law traditionally requires delivery and acceptance.

Delivery

Delivery concerns the grantor's intent that the deed presently transfer the interest described. Physical hand-to-hand transfer is common, but legal delivery depends upon intent rather than mere physical possession.

Acceptance

Acceptance ordinarily occurs when the grantee agrees to receive the conveyance. Because most conveyances benefit the grantee, acceptance is frequently presumed unless evidence demonstrates otherwise.

Not every deed provides the same protection to the buyer. The type of deed determines the warranties, if any, accompanying the conveyance.

General Warranty Deed

A general warranty deed provides the broadest protection. The grantor warrants title against defects arising both during and before the grantor's ownership and traditionally includes the six covenants of title.

Special Warranty Deed

A special warranty deed provides more limited protection. The grantor warrants only against defects that arose during the grantor's own period of ownership and generally makes no promises regarding earlier defects in the chain of title.

Quitclaim Deed

A quitclaim deed conveys whatever interest the grantor presently possesses, if any. Unlike warranty deeds, it generally provides no warranties of title. The grantee receives only the interest, if any, that the grantor actually owns.

Warranty deeds traditionally include six covenants of title. These covenants are commonly divided into two groups.

Present Covenants

• Covenant of Seisin
• Covenant of Right to Convey
• Covenant Against Encumbrances

These are generally breached, if at all, at the time of conveyance.

Future Covenants

• Covenant of Quiet Enjoyment
• Covenant of Warranty
• Covenant of Further Assurances

These protect the grantee against certain future claims affecting title.

Each covenant will be examined in greater detail in a later chapter devoted specifically to warranties of title.

After execution, delivery, and acceptance, deeds are commonly recorded in the appropriate local land records office.

Recording serves several important purposes. It:

• preserves the public record;
• provides constructive notice to later purchasers;
• protects priority under applicable recording statutes.

Recording is extremely important, but it should not be confused with delivery. A deed may be valid between the parties even before it is recorded, although failure to record may affect priority against subsequent purchasers or creditors under state recording acts.

Deeds appear throughout nearly every area of real property law. Common examples include:

• residential purchases;
• commercial acquisitions;
• gifts of real estate;
• transfers to or from trusts;
• probate distributions;
• divorce settlements;
• business reorganizations;
• estate planning.

Every title examination begins by reviewing the deeds comprising the property's chain of title.

"A Purchase Contract Transfers Ownership"

Incorrect.

A purchase contract creates contractual rights and obligations. The deed is the instrument that ordinarily transfers title.

"Every Deed Guarantees Good Title"

Incorrect.

Only certain deeds contain warranties. A quitclaim deed generally conveys only whatever interest the grantor possesses without warranting title.

"Recording Creates Ownership"

Not exactly.

Recording protects interests and provides notice under recording statutes. Ownership generally passes through a valid conveyance, not merely because a document has been recorded.

Deeds connect many doctrines discussed throughout this volume.

Primary Authorities

• State conveyancing statutes
• State recording statutes
• Judicial decisions interpreting deeds
• County land records
• State property codes

Authoritative Secondary Sources

• Restatement (First) of Property
• Restatement (Third) of Property
• Powell on Real Property
• Thompson on Real Property
• Tiffany Real Property
• American Law of Property
• Corpus Juris Secundum (C.J.S.) Deeds
• American Jurisprudence 2d (Am. Jur. 2d) Deeds

These authorities explain deed doctrine but do not replace controlling statutes or binding judicial decisions.

• A deed is the principal legal instrument used to voluntarily transfer an interest in real property from a grantor to a grantee.
• A valid deed generally requires a competent grantor, identifiable grantee, words of present conveyance, an adequate legal description, the grantor's signature, delivery, and acceptance, subject to state law.
• General warranty deeds, special warranty deeds, and quitclaim deeds provide different levels of title protection.
• Recording protects interests and provides constructive notice but is legally distinct from delivery.
• Understanding deeds is essential before studying recording acts, chain of title, title insurance, and real estate finance.

Next Chapter — Recording Acts

The next chapter examines the Recording Acts, the statutory framework governing the public recording of real property interests. Readers will learn why deeds are recorded, how recording provides constructive notice, and how race, notice, and race-notice recording statutes determine priority when competing claims arise.