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Examining Real Estate Deeds: The Different Types and Why You Need Them
There are many different types of deeds in real estate, and sometimes the purpose for each can be confusing. If you’re a real estate professional helping a client buying or selling a home, it’s important to have a good understanding of the different types of deeds so you can advise them appropriately. Before we delve into that, let’s clarify exactly what a deed is.
What is a Deed?
A deed is an instrument that transfers the title to real property from one person or entity to another. The person transferring title by deed is called the grantor; the one who receives the title is called the grantee.
Generally, a deed must:
- Be in writing
- Include the amount paid
- Be signed by the grantor
- Identify the grantor and grantee
- Contain words of conveyance
- Include a description of the land
After the real estate transaction is complete, the deed is recorded into the public land records.
The Most Common Types of Deeds
General Warranty Deed
General warranty deeds are the most common types of deeds used to insure title to real property. They also give the most protection to the grantee. They include specific covenants that warrant to the grantee that there is no defect in the title and the title has not been previously conveyed to anyone by the grantee. The covenant against encumbrances, for example, warrants there are no mortgages, easements or liens on the property at the time the deed is delivered.
Special Warranty Deed
Special warranty deeds contain the same title covenants found in the general warranty deeds, but only apply them to defects caused by the acts or omissions of the grantor. They only warrant that the grantor did nothing personally to cause a defect in the title during their ownership, and do not protect against defects caused by the person who owned the property before the grantor.
Quitclaim deeds do not contain “grant and convey” language. They do not contain covenants and warrant nothing in terms of encumbrances, liens, or the grantor’s rights, interests or title to the real property. Generally, these deeds are used for curative purposes—as in the case of a divorce when one party divests their interest in the property.
More Title Resources from Velocity Title
Many different types of deeds are allowed under Maryland law. If you are involved in a real estate transaction and need more information about the different types of deeds and which kind you should have drafted, contact Velocity Title for help. Using the wrong kind of deed can lead to delays or worse, so don’t take any chances! You can also view our Title Minute episodes discussing these deeds in more detail here.
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