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Covenant of Seisin

the grantor’s expression that he or she has possession and the right to convey the property.

Voluntary

  • Selling
  • Gifting

Involuntary

  • Foreclosure
  • Tax Sale
  • Title Issues
  • Destruction
 
 

Deeds

Essential elements of deeds 

  • It must be in writing,
  • competent grantor,
  • named grantee,
  • recital of consideration,
  • words of conveyance, habendum (a type of ownership),  
  • legal description,
  • signature of the grantor
  • delivery and acceptance.

 The tax assessor’s parcel number uses a system of identifying properties that look similar to the recorded plate map.

 

When the seller can furnish title insurance, the buyer can be assured he is getting fee simple title. (the highest form of ownership)

What is the purpose of a Deed?

Evidence of title ownership. Alienation of the seller. To show ownership from one person to another person.

 

TYPES OF DEEDS

Deeds show the covenants by which a grantor is bound to the buyer in the transaction

 

General Warranty Deed

The deed that gives the most protection to the buyer.

It has five covenants.

  1.  Covenant of Seisen
  2.  Covenant of quiet enjoyment: Quiet enjoyment means that the grantor guarantees that no one else can come along and claim ownership of the property. It also means that if a later party’s title claim is found to be better than the owner’s title, the grantor is liable for any losses.
  3.  Covenant against encumbrances: The grantor guarantees that the title to the property has no encumbrances like an easement or lien. Easements are rights that enable someone else to use some of the property, and liens are financial claims against the property. The only exceptions to this warranty are encumbrances that are specifically stated in the deed.
  4.  Covenant of further assurance: In this covenant, the grantor promises to obtain and provide documents necessary to clear up any problem that comes up with the title.
  5.  Covenant of warranty forever: The grantor guarantees to pay all costs to clear up any title problems at any time in the future.

A particular feature of a general warranty deed is that warranties cover any title problems that may have occurred during all past owners’ ownerships.

When the seller can furnish title insurance, the buyer can be assured he is getting fee simple title. (the highest form of ownership)

 
 
 

Special Warranty Deeds/Grant Deed

Likely to be encountered if the property is being acquired through a tax or foreclosure sale.

Has two warranties 

  1. The first is that the grantor has title to the property. 
  2. The second guarantee that nothing was done to affect the title during the grantor’s ownership, and if a problem existed, the grantor would correct it.

 

Because of the limited warranties, people acting as third parties sometimes use special warranty deeds. 

An estate’s executor uses a special warranty deed to convey property belonging to an estate or trust.

 
 
 

Quitclaim Deed

  1. Contains no warranties and gives no implication of how much or how good the grantor’s title to the property is
  2. Usually transferred between people who know each other.
  3. Used to clear up clouds/defects on the title or relinquish an inchoate 
  4. Least protection.
  5. Carries no covenants or warranties whatsoever.
  6. It may be used to transfer an easement.
  7. Quitclaim deeds sometimes are used for uncomplicated transfers. 
 

Bargain and Sale Deed

  1. Contains no warranties against encumbrances unless stated.
  2. It only implies that the grantor holds the title and is in possession.
  3. That the grantor has full title to the property is implied.
  4. Essentially it gives no protection to the grantee. This type of deed sometimes is used in foreclosure and tax sales.

Executor’s Deeds, Administrator’s Deeds, Sheriff’s Deeds

  1. A deed executed pursuant to a court order.
  2. It is used to convey title to the property transferred by court order or by will.
  3. An executor’s deed in the case of a deceased person’s estate and a sheriff’s deed in the case of a sale of property seized by a local unit of government town or the bank are two examples such court-ordered deeds. State law establishes these deeds, and state law governs their form.
 

CORPORATE DEEDS

An authorized corporate officer must sign the deed.

The person named in a corporate resolution is the person authorized to sign a listing agreement for a corporation. 

 

Et a

Latin, meaning “and others.”

Et ux / Et uxor

Latin, meaning “and wife.” 

Et vir

Latin, meaning “and husband.”

 
 

Trust Deed

There are three parties in a deed of trust: the lender, the homebuyer or borrower, and a trustee.

The trustee is a third party who plays the role of intermediary for the real estate transaction. This is unlike a mortgage, in which there are just two parties involved: the lender and the borrower.

A trust deed—also known as a deed of trust—is a document sometimes used in real estate. It is a document that comes into play when one party has taken out a loan from another party to purchase a property. The trust deed represents an agreement between the borrower and a lender to have the property held in trust by a neutral and independent third party until the loan is paid off.

Reconveyance Deed

  1. Executed by the Trustee to return (reconvey) title to property held in trust.
  2. A trust deed conveys ownership by a trustor to a trustee for the benefit of a beneficiary as security for a debt. 
  3. A reconveyance deed is used to reconvey title to property from a Trustee back to a trustor after a debt for which the property is security has been paid off.

Wealth and Planning Trusts

A trust is traditionally used for minimizing estate taxes and can offer other benefits as part of a well-crafted estate plan.

Since trusts usually avoid probate, your beneficiaries may gain access to these assets more quickly than they might to assets that are transferred using a will. Additionally, if it is an irrevocable trust, it may not be considered part of the taxable estate, so fewer taxes may be due upon your death.

Assets in a trust may also be able to pass outside of probate, saving time, court fees, and potentially reducing estate taxes as well.

 

Constructive Notice

By recording a deed, a person has given a Constructive Notice to the world. Once the deed is recorded, everyone has been given notice whether they know about it or not. 

An unrecorded deed is valid only to those parties involved and to those who know about it.

The first person to record the deed is the owner. 

Bob executed a deed to Sally and then put it into a box. 

When Bob died, the property went to his heirs because the deed was not recorded.

 
 
 

Courtesy of Jack

Which mortgage clause is most important to the lender if it is contemplating a foreclosure?

A          Due on sale clause

B          Acceleration clause 📍 📍 📍

C          Defeasance Clause

D         Subordination Clause

Q plans to purchase property by using a contract for deed.

a          Q is referred to as the vendor.

b          The payment of all or part of the purchase price will be deferred. 📍 📍 📍