Getting the Deed Done: Understanding 4 Commonly Used Deeds

Getting the Deed Done: Understanding 4 Commonly Used Deeds

by Brette Sember, J.D., November 2019

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You've probably heard the word "deed" batted around quite a bit. A deed is a written, legal document that transfers ownership or title of real property from one person or entity (like a corporation) to another.

 Understanding 4 Commonly Used Deeds

Deeds need to be filed with the county in which the property is located to become effective. It's helpful to learn about the four most common types of deeds.

1. Quitclaim Deed

A quitclaim deed is a fast and easy way to transfer real property from one person or entity to another. Usually when real estate is sold or transferred, the process takes a lot of time because a title search has to be done to be sure the seller owns the property free and clear. A quitclaim deed doesn't require any of this.

A quitclaim deed transfers the property without making any promises or guarantees about how clear the title is. There may be liens against the property and those liens will pass along with ownership to the new owner. A quitclaim deed is often used when there is no financial transaction at all; for example, if Jay marries Tasha and wants to add her on as an owner of his home, he would quitclaim the property to her and himself as joint owners.

2. Warranty Deed

A warranty deed, which also may be called a general warranty deed, is the type of deed used most frequently when real property is sold. A warranty deed guarantees that the title is free and clear of debts or liens. The seller promises that, if this is not the case, then they will indemnify the buyer.

When you buy a home, this is the type of title to expect. A general warranty deed is the best option for the buyer of the real property—given the scope of the guarantees it provides, specific to liens and claims.

3. Special Warranty Deed

A special warranty deed, called a limited warranty deed in some states, falls somewhere in between a quitclaim deed and a warranty deed in terms of what it promises. This type of deed guarantees that no liens or claims against the title have been made while the seller owned it. The deed, however, makes no promises about claims against the title that occurred before the current owner took possession of it. The buyer is only protected against claims that were made during the seller's term of ownership.

A common situation for a special warranty deed is when you buy a home that has been foreclosed on. The bank will transfer the title to the buyer with a special warranty deed since it doesn't know what kinds of liens or claims might have been placed against the property before it took ownership.

4. Trustee Deed

In deed states such as California, a bank that lends money to the buyer of a piece of real property creates a trust or trustee deed instead of a mortgage. If the person who bought the property defaults on paying back the loan, the bank can sell the property in a nonjudicial foreclosure sale (meaning they don't have to go to court to force the sale). The person who buys the home in the sale receives a trustee deed.

The trustee deed is similar to a special warranty deed in that the bank makes no promises about liens or claims against the property that originated before the bank took possession of the property. You could also hear this term used in estate planning for a deed used to transfer property from a trust to a beneficiary.

Other Types of Deeds

There are many other types of deeds in addition to these four common kinds, including:

  • Sheriff's deed. This is similar to a trustee deed and is used to transfer real property sold at a sheriff's sale.
  • Master deed. This is a deed filed by a condominium owner to record the property and allow sales of the individual condos and use of communal areas by owners.
  • Executor deed. This deed is used to transfer property from the estate of a deceased person to the beneficiary named in the will who inherits it.
  • Administrator deed. This is similar to an executor deed and is used to transfer property from the estate of a person who dies without a will to the heir who inherits it under state intestacy laws.

Understanding the different types of deeds can help you make good decisions when it comes to buying property or understanding the legalities of inheritance.