Deed

A deed is a document giving the ownership right to another person. It is signed by two parties, is legally valid, and gives ownership of an asset (property, vehicle).

The main purpose of a deed is to transfer the legal right to possession of property or an asset from one person or company to another.

The deed must be in compliance with the rules and must be legal so that the new owner can dispose (sell, refinance, or obtain a credit line) the property. The deed is usually prepared by the buyer's attorney or title insurance company.

Understanding a Deed

The act must obligatory be recorded in the public record by an officer of the local government. The signed deed must be notarized, and some states require witnesses. Only then will it be legally valid.

If the deed is prepared, notarized, but not in the public record, it is imperfect. The deed and ownership transfer are valid, but the absence of registration in the public records may cause difficulties in case of a legal proceeding.

Deeds are the only type of ownership transfer without commissions, powers of attorney, patents, licenses to practice and degrees.

Types of Deeds

Different deeds have their own purposes, depending on which they differ.

Grant deed. It is not necessary to register or notarize the grant deed, but it is in the recipient's best interest. The grant deed has two guarantees. The property has not been sold to anyone else and there is no encumbrance of outstanding liens or mortgages. This kind of deed can be called "free and clear" of defects.

Warranty deed. This document states that the property is free from defects caused during ownership. This deed gives the highest level of protection to its owner. This deed gives the highest level of protection to its owner. It provides all the same things as the grant deed and adds the security that the grantor will guarantee and protect the property from any complaints.

Quitclaim deed. This document is a resignation of ownership without specifying the character of the interest or rights. It is often used in divorce proceedings and transfers between family members. The applicant may or may not be the legal owner and makes no promises.

Content requirements of a Deed

The requirements are different in different states, but they are all quite simple. For example, in California, the transferred property must be described in detail, the grantor and the grantee must be named.

The deed is invalid if it is a forgery, if the grantor is a minor, or if the grantor has been declared mentally incompetent.

The deed may not have registration at the local authorities, but in case of sale or litigation, registration will help to avoid complications.

Deed limitations

The transfer of ownership must be properly documented, otherwise there may be reasons to have the title of ownership obscured. An imperfect deed may have errors made by the record registrar.

Problems with the will are also possible. For example, in the absence of the property owner's will after death, the heirs may challenge each other's rights in court.

In addition, there may be restrictions on the owner's actions in the title transfer deed, such as homeowner's association rules. In other words, the new owner may not always have the right to use the property as he or she wants.

To take a concrete example, a person received a land parcel as a deed of gift, but he or she does not have the right to build something there because of environmental reasons. In the same way, for example, a person cannot build a shooting range because it is a risk to the lives of others.

Deed vs. Title

A deed and a title are connected, but they have several differences.

A deed is a document of the property ownership transfer from one owner to another. This document contains a description of the transferred property, specifying all the parties to the transaction and their signatures. This document is recorded in the official register and is registered at the state authorities.

A title is a document that proves ownership. In other words, it may not exist physically, but it is a document of ownership for real estate, which gives the rights of owning and using.