Property deeds are used to convey real property from a grantor (seller) to a grantee (buyer). For a deed to be legally operative, it must include the identification of the grantor and grantee, and the adequate description of the property.
Property deeds can be classified into several categories. Investopedia’s recent article entitled “Understanding Property Deeds” explains that a property deed is a written and signed legal instrument that is used to transfer ownership of real property from the then-owner (the grantor) to the new owner (the grantee).
Every state has its own requirements, but most deeds are required to have some essential elements to be legally valid:
- It must be in writing.
- The grantor must have the legal capacity to transfer the property and the grantee must be capable of receiving the grant of the property. Typically, one who’s competent to make a valid contract is considered competent to be a grantor.
- The grantor and grantee must be specifically identified.
- The property must be described sufficiently.
- There must be operative words of conveyance.
- The deed must be signed by the grantor(s).
- The deed must be legally delivered to the grantee or to someone acting on her behalf.
- The deed must be accepted by the grantee.
Deeds are also categorized based on the type of title warranties provided by the grantor. The different types of deeds include the following:
General Warranty Deed. This deed offers the grantee the most protection. Here, the grantor makes a series of legally binding promises (covenants) and warranties to the grantee (and their heirs) agreeing to protect the grantee against any prior claims and demands of all persons as to the conveyed land. These are the usual covenants for title included in a general warranty deed:
- the covenant of seisin, which means the grantor warrants that she owns the property and has the legal right to convey it;
- the covenant against encumbrances and that the grantor warrants the property is free of liens or encumbrances, except as specifically stated in the deed;
- the covenant of quiet enjoyment and that this won’t be disturbed, because the grantor had a defective title; and
- the covenant of further assurance, where the grantor promises to deliver any document necessary to make the title good.
Special Warranty Deed. The grantor promises to warrant and defend the title conveyed against the claims, and it warrants that he or she received the title and hasn’t done anything while holding the title to create a defect. Thus, only defects that occurred in the grantor's ownership of the property are warranted.
Quitclaim Deed. Also known as a non-warranty deed, this deed offers the grantee the least amount of protection. It conveys whatever interest the grantor currently has in the property, if any. There are no warranties or promises regarding the quality of the title.
Special Purpose Deeds. This deed is often used with court proceedings and situations, where the deed is from a person acting in some type of official capacity. These deeds offer little or no protection to the grantee and are essentially quitclaim deeds. The types of special purpose deeds include, for example, an Administrator's Deed, an Executor's Deed, a Sheriff's Deed, a Tax Deed, a Deed in Lieu of Foreclosure, and a Deed of Gift (Gift Deed).
Certain essential elements must be contained within the deed for it to be legally operative. Ask your Houston estate planning attorney about these different types of deeds.
Reference: Investopedia (March 27, 2019) “Understanding Property Deeds”