Flashcards in Unit 7 - part 2 Deck (12):
Types of Deeds
• General warranty deed
• Special warranty deed
• Bargain and sale deed
• Quitclaim deed
• Deed of trust
• Reconveyance deed
• Trustee's deed
• Deed executed pursuant to a court order
General warranty deed
A deed that fully warrants and promises that the title being transferred is fully valid and free of encumbrances.
Special warranty deed
A deed that warrants and promises that the title being transferred is free of defects that arose during the time that the grantor owned the property; such a deed makes no warranties about defects that arose before the grantor had possession of the property.
A special warranty deed guarantees less than the general warranty deed: that the grantor received title, and that there were no encumbrances other than what is listed in the deed while the grantor held title. There is no guarantee against title defects or encumbrances that may have been present when the grantor received the property, nor does it obligate the grantor to do anything further once the title is transferred.
Special warranty deeds are frequently used by temporary holders of real estate, such as trusts, or other fiduciaries, or corporations, who do not use or occupy the land for their own benefit. Often, the special warranty deed is issued when the real estate is sold in a tax sale.
Bargain and sale deed
The bargain and sale deed has no guarantee that the land being sold is free of encumbrances—the only implication is that the grantor has title, and not one that is necessarily free of defects.
The bargain and sale deed is most often the deed that is transferred from a foreclosure or tax sale.
Since the grantor, usually a bank or tax authority, did not occupy the land, it would not necessarily know of any encumbrances that may have been attached to the land by the previous owner, and, thus, the grantor does not want to guarantee against any encumbrances.
The quitclaim deed carries no warranties at all—it only conveys the interest that the grantor had in the property, whatever that may be. The real estate interest may be full title, but the grantor does not guarantee it.
The quitclaim deed is used in those cases where the grantor does not want to assume further liability, or feels no need to guarantee title, such as when a family member transfers title to another family member or the grantor is only transferring some of his rights and not conveying a fee simple estate. A quitclaim deed is also used to cure a title defect, such as a misspelled name on the deed. The quitclaim deed is also used when the grantor’s title is not clear.
Deed of trust
A deed of trust is a deed that conveys title from a trustor to the trustee for the benefit of the beneficiary.
In many states, a deed of trust is used in lieu (instead) of a mortgage, when the borrower, the trustor, transfers the deed to a trustee as security for the loan given by the lender to the beneficiary.
* creates lien on the property
(to convey again)
A reconveyance deed is a deed conveying title from the trustee back to the trustor, such as when the trustor pays off the loan that was secured by the real estate.
* trustee returns title to the owner
* Conveyance from trustee back to trustor
A trustee’s deed is a deed conveying title to another party who is not the trustor. In most cases, this would be the beneficiary.
*Conveyance from trustee to third party
Deed Executed Pursuant to a Court Order
Administrator's Deed - May be used when a person dies intestate (without a will). A court appointed administrator will dispose of the decedent's assets and an administrator's deed may be used to convey the title of real property to the grantee.
Executor's Deed - May be used when a person dies testate (with a will). The estate's executor will dispose of the decedent's assets and an executor's deed may be used to convey the title or real property to the grantee.
Sheriff's Deed - gives ownership of RE bought at sheriff's sale
Masters deed - deed by condominium developer for recording a condo development.
LIEN Theory vs. TITLE Theory State
Each type of theory has special considerations on who will hold title and how foreclosure proceedings would take place if they were to become necessary.
In title theory states, the borrower does not actually keep title to the property during the loan term. The seller gives the buyer/borrower a deed to the property but when the borrower signs the mortgage for the loan the borrower gives the title back to the mortgage holder. The lender then holds title to the property, as security only, until all loan payments have been made. During that time the borrower has the right to possession of the property, and the lender delivers the deed back to the borrower only after the loan obligation has been satisfied.
In a lien theory state, the buyer holds the deed to the property during the mortgage term The buyer promises to make all payments to the lender and the mortgage becomes a lien on the property, but title remains with the buyer. The lender’s lien is removed once the payment of all loan payments have been completed. Foreclosure proceedings in a lien theory state may be more difficult for the lender than in a title theory state, due to the fact that the buyer is holding title to the land and not the lender.
transfer declaration form
The transfer declaration must states:
• the full sales price of the property;
• its legal description;
• the type of improvement;
• the address, date, and type of deed; and
• whether the transfer is between relatives or by court order.