Skip to content

Deeds: Why Are They Such a Big Deal?

When a person buys or sells property, they encounter many legal terms and phrases. They may not know what the different terms mean, which is why they work with an attorney as the process moves forward. One term that will come up during the sale or purchase is the word deed. What is a deed, and why is the deed so important? 

What is a Deed? 

A deed of conveyance is nothing more than a signed, sealed, and delivered document transferred from the seller to the buyer at the close of a real estate transaction. This conveys the interest in real estate from one party to another. Most people associate real estate with land or property. However, the deed may also convey interest in other items, such as roads. 

What Must a Deed Include to Be Legal? 

To be considered a legal document, the deed must meet certain requirements. First, it must outline an agreement in writing, rather than establishing a verbal agreement. There is no specific form that parties must use, so long as the parties write the information. 

The individual transferring the property must have the legal capacity to do so, while the person receiving the property must be legally able to accept it. Each party must be described in this document. This is necessary, as only those named on the document legally own the property. 

In addition, the document must contain a complete description of the property. This includes any portion of the property subject to an easement or reservation. Other parties should be able to find and identify this parcel of land from the description provided. 

To be legal in a court of law, the document must contain operative words of conveyance. The seller or sellers must sign it and deliver it to the buyer or someone acting on their behalf. In addition, the buyer must accept this deed. Most do, but there are cases where a buyer may refuse the deed. 

Types of Deeds

There are several types of deeds. Besides being an official or private deed, officials may classify this document in other ways. All parties to the agreement must understand what they are signing before completing the transaction. 

Official deeds are those executed as part of a court or legal proceeding. This type of deed isn’t as common as private deeds. A private deed is one between individuals and business entities. Besides knowing whether a document is an official or private deed, both parties must know what type of deed they need for the transaction. 

General Warranty Deeds

A seller provides a buyer with a general warranty deed to show there are no claims or liens against the property involved in the transaction. If any claims, liens, or encumbrances come to light, they become the responsibility of the seller. The seller then must compensate the buyer. This provides the buyer with the highest level of protection. 

Most general warranty deeds come with certain covenants. This includes a covenant of seisin, which means the seller declares they own the property and can sell it, and the covenant against encumbrances, which states the seller warrants there are no liens or encumbrances on the property being transferred. The document creator may also include other covenants in this deed. 

Special Warranty Deeds

A special warranty deed differs from a general warranty deed in that the seller declares they received title to the property as is. While holding that title, they did nothing to create a defect. In this situation, the seller becomes liable for actions taken while they owned the property. Anything that happened prior to their ownership becomes the responsibility of the buyer. This type of deed is more commonly seen in commercial property transactions.

Quitclaim Deed

Quitclaim deeds provide the buyer with the least amount of protection. Often referred to as a non-warranty deed, this document transfers whatever interest the seller has in the property to the buyer, but there is no guarantee the seller has any interest in the property. The seller makes no warranties or promises regarding the title quality. When the title is good, the deed works as a general warranty deed. If there are problems with the title, however, the buyer rectifies them. 

Additional Types of Deeds

There are several other types of deeds parties may use during a property transfer. This includes an administrator’s deed, an executor’s deed, tax deeds, a sheriff’s deed, and a deed in lieu of foreclosure. Work with an attorney to determine which deed the parties need for a real estate transaction to ensure problems don’t arise in the future. 

A deed is a written document used to transfer ownership of real estate from one party to another. It is used to convey the title and provide proof of ownership. All parties involved in the transaction must understand the deeds available to ensure they use the right document. This protects each party from liens, encumbrances, and other legal problems in the future. 

How Does a Deed Differ From a Title?

People often use the terms deed and title interchangeably when talking about a real estate transaction. However, there are key differences between the two that every party to a transaction should know of. A deed is a physical document that transfers ownership from the seller to the buyer. The parties or individuals working on their behalf publicly record this document upon completion of the transaction. 

A title, in contrast, is a concept. It shows the owner has legal rights to the real estate. A title is not a physical document, although many people believe it is. If there is any doubt regarding what a person is referring to when they use either of these terms, have everything clarified before moving forward with the transaction.

When one or more parties need help with choosing and creating a deed, work with an experienced attorney. Many people turn to Steltzner Law, a real estate law firm in Rock Hill, SC. Doing so ensures the transaction moves smoothly and all parties receive the highest level of protection. The attorneys will be happy to help with this real estate matter.