Real Estate PL Topic - Types of Deed

Types of Deeds

A deed can take several forms, depending on the extent of the grantor’s promises to the grantee. Regardless of any guarantees the deed offers, the grantee will want assurance that the grantor has the right to offer what the deed purports to convey. To obtain this protection, grantees commonly seek evidence of title.

The exam requires us to distinguish the following:

• General warranty deed
• Special warranty deed
• Quitclaim deed

General Warranty Deed

A general warranty deed provides the greatest protection to the buyer because the grantor is legally bound by certain covenants (promises) or warranties. In most states, the warranties are implied by the use of certain words specified by statute. In some states, the grantor’s warranties are expressly written into the deed itself. Each state law should be examined, but some of the specific phrases include convey and warrant or warrant generally.

Special Warranty Deed

A special warranty deed contains two basic warranties:

• That the grantor received title
• That the property was not encumbered during the time the grantor held title, except as otherwise noted in the deed

In effect, the grantor defends the title against the grantor’s actions, but not those of earlier owners of the property. The granting clause generally contains these words: “Grantor remises, releases, alienates, and conveys.” The grantor may include additional warranties, but they must be specifically stated in the deed. In areas where a special warranty deed is in common use, the purchase of title insurance typically is viewed as providing adequate additional protection to the grantee. A special warranty deed may be used by fiduciaries such as trustees, executors, and corporations.

A special warranty deed is appropriate for fiduciaries because they lack the authority to warrant against acts of predecessors in title (the former owners). A fiduciary may hold title for a limited time without having a personal interest in the proceeds. Sometimes a special warranty deed is used by a grantor who has acquired title at a tax sale.

Quitclaim Deed

A quitclaim deed provides the grantee with the least protection of any deed. It carries no covenants or warranties and generally conveys only whatever interest the grantor may have when the deed is delivered. If the grantor has no interest, the grantee will acquire nothing and will have no right of warranty claim against the grantor. A quitclaim deed can convey title as effectively as a warranty deed if the grantor has good title when the deed is delivered, but it provides none of the guarantees of a warranty deed. Through a quitclaim deed, the grantor only remises, releases, and quitclaims the grantor’s interest in the property, if any.

A quitclaim deed is usually the only type of deed used to convey less than a fee simple estate. This is because a quitclaim deed conveys only the grantor’s right, title, or interest without any warranty that the grantor has any right, title, or interest.

A quitclaim deed is frequently used to cure a title defect, called a cloud on the title. For example, if the name of the grantee is misspelled on a warranty deed filed in the public record, a quitclaim deed with the correct spelling may be executed to the grantee to perfect the title.

A quitclaim deed is also used when a grantor has apparently inherited property but it is not certain that the decedent’s title was valid. A warranty deed from the grantor in such an instance would oblige the grantor to warrant good title, while a quitclaim deed would convey only the grantor’s interest, whatever it may be.

General Warranty Deed:

• Provides the greatest protection to the buyer

Special Warranty Deed:

• Warranty that grantor received title
• Warranty that property was unencumbered by grantor

Quitclaim Deed

• Used primarily to convey less than fee simple or to cure a title defect

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