Deeds

Question 1

What document is a contract by which a property owner (grantor) transfers his rights to a property to another (grantee)?

Answer 1

A deed

Question 2

What are the 3 possible types of warranty provided by a grantor in a deed?

Answer 2

1. General warranty
2. Special or limited warranty
3. Quitclaim

Question 3

What type of deed is this?

A grantor assures he has title, can convey the property, and will forever defend the grantee’s rights. This gives the grantee the strongest assurance of ownership.

Answer 3

General warranty deed

Question 4

What types of deed is this?

Grantor warranties title for the period of his ownership but not for any time prior to ownership. The grantor may or may not assure the buyer that he has title or whether he has encumbered the property.

Answer 4

Special or limited warranty deed

Question 5

True or False?

A special/limited warranty deed often includes deeds from trustees, administrators, and referees in bankruptcy.

Answer 5

True

Question 6

What type of deed offers no warranty?

Answer 6

Quitclaim deed

Question 7

What type of deed is this?

The grantor provides no assurance of ownership. Whatever ownership interest the grantor had, if any, is transferred.

Answer 7

Quitclaim deed

Question 8

A quitclaim deed is often used to remove_____.

Answer 8

A cloud on title

Question 9

To be valid, a deed must include what 5 things?

Answer 9

The signature of the grantor (who must be legally competent), the name of a grantee, and a description of the property, consideration must be stated, and the deed must have words of conveyance and the interested being conveyed.

Question 10

List the 5 parts of a deed

Answer 10

1. Premises
2. Habendum
3. Testimonium
4. Execution
5. Acknowledgement

Question 11

What is included in premises?

Answer 11

names of parties, consideration, property description

Question 12

What is habendum?

Answer 12

“to have and to hold” clause that limits the estate granted

Question 13

What is included in testimonium?

Answer 13

Warranties, if any

Question 14

What is included in execution?

Answer 14

Signature of grantor, date, seal

Question 15

What is the acknowledgement?

Answer 15

Notarization required for recording

Question 16

True or False: Recording is required for a deed to be valid.

Answer 16

False. Recording is not a requirement.

Question 17

Where is a deed recorded?

Answer 17

Often in a county courthouse

Question 18

What is constructive notice?

Answer 18

Notice to the world of the existence of the deed given during recording of a deed

Question 19

True or False: Recording does not assure the deed’s validity.

Answer 19

True.

Question 20

True or False: The signature of the grantor must be notarized for a deed to be recorded

Answer 20

True.

Question 21

What does it mean for a deed to be acknowledged?

Answer 21

Acknowledged refers to notarization. The signature of the grantor must be notarized for the deed to be recorded.

Question 22

If a grantee fails to record a deed, can a seller sell the property again to someone else? Who owns the property?

Answer 22

Yes. If the 2nd buyer bought in good faith and recorded his deed first, courts will award ownership to the 2nd buyer

Question 23

Why is a title search important?

Answer 23

Sellers can move away or refuse to honor the warranty. So no matter the type of deed, it is important that a qualified party conduct a title search to be certain that the seller is the owner of the property and can convey title.

Question 24

What is title insurance?

Answer 24

Lenders often require this for a real estate loan. The equity holder can also purchase that type of insurance.

Question 25

What is alienation?

Answer 25

A term meaning the transfer of property. It can be a voluntary act of the owner, as would be needed to get a mortgage loan, or a sale.

Question 26

What is involuntary alienation?

Answer 26

When ownership is transferred as demanded by someone else, such as a foreclosure or condemnation

Question 27

What contract does not provide a deed at closing?

Answer 27

Land contract (contract for deed or installment land sale contract)

Question 28

Describe a land contract (or contract for deed)

Answer 28

A seller-financed transaction without the seller providing a deed at closing. Often used in the sale of low-down payment resort property, this type of contract transfers the deed after the buyer makes final payment, often after many years of installment payments. This makes it easier for the lender to continue ownership if the buyer defaults on payments.