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A written instrument by which a property owner as “grantor” conveys and transfers to a “grantee” an ownership interest in real property. Types of deeds differ by the type of covenant made by the grantor and include warranty deeds (most commonly used), grant deeds, bargain and sale deeds, quitclaim deeds, gift deeds, guardian’s deeds, executor’s deeds, personal representative’s deeds (probate), sheriff’s deeds, commissioner’s deeds (foreclosure) and deeds in trust. Title to leasehold property is transferred by way of an “assignment of lease” document rather than a deed. (See freehold, leasehold)
To be valid as between grantor and grantee, a deed must contain the following elements:
Grantor:
The deed must name a grantor who is of age and of sound mind. A mistake in the spelling of the grantor’s name or signature will not invalidate the deed if the grantor’s identity is otherwise clear. If there are multiple grantors, each must be named as a grantor in the deed to convey his or her interest, or each may convey separately in separate deeds.
Grantee:
There must be an actual grantee. A deed delivered to a corporation before its coming into legal existence (by filing its articles of incorporation) is void for lack of a grantee as is a deed delivered to the estate of a dead grantee. A deed delivered to a minor or incompetent is valid. A deed to a fictitious person is void, but a deed to a person using a fictitious name is valid. It is good practice to include the status of the parties—such as married, minor, trustee, or personal representative. A grantor cannot be the sole grantee, but the grantor could convey the deed jointly to the grantor and another person or to the grantor’s corporation.
A deed is not a valid conveyance until the grantee’s name is inserted in it by the grantor personally, by someone at the grantor’s request and in his or her presence, or by the grantor’s agent duly authorized in writing.
Consideration:
A deed should recite some consideration, although in most instances it need not be the actual consideration. Most deeds recite a nominal consideration, such as “for $10 and other good and valuable consideration.” Deeds granted by fiduciaries, however, must state the actual consideration, and in all cases the contract of sale states the actual consideration.
Words of conveyance:
Words of conveyance such as, “I hereby grant and convey” distinguish the deed from a mortgage instrument.
Legal description:
There must be a legal description of the land conveyed, by metes and bounds; by lot, block, and subdivision; or by a government survey. In a condominium deed, the unit designation and post office address are generally sufficient because the full legal description is already recited in the recorded declaration. If the deed attempts to convey more property than the seller actually owns (through an incorrect legal description), the deed is not void but is usually valid for that portion of the description actually owned by the grantor.
Signature:
The grantor must sign the deed. If the grantee is assuming an existing mortgage or is agreeing to abide by a restrictive provision in the deed, then the grantee is also required to sign. In some states, the signature must be witnessed and/or notarized. A date of execution is not essential but is customary and tends to establish the date of delivery.
Delivery:
Delivery is the final act of the grantor, signifying an intention that the deed will take effect. A deed must be delivered and accepted during the lifetime of both the grantor and the grantee to be valid; title passes and the deed is no longer an operative instrument, and its loss or destruction does not affect the grantee’s title. However, when transferring property registered under the Torrens system, registration of the deed and not the act of delivery conveys title.
The destruction of a deed normally has no effect on the deed, because it is simply evidence of the title, not the title itself. Therefore, title cannot be reinvested in the grantor by the grantee’s destroying the deed even with the intent to restore the grantor’s original title.
Though not essential for validity, a deed is normally recorded to protect the grantee against claims of any third party. For valid recordation, a deed must be properly recorded in the chain of title.
Dearborn Real Estate Education
This "Word of the day" is excerpted from The Language of Real Estate, 6th Edition by John Reilly (published by Dearborn Real Estate Education, 2006 copyright). To purchase the complete book, with over 2800 key terms and definitions, or to browse through Dearborn's hundreds of other professional real estate titles, including Real Estate Technology Guide by Klein, Barnett, Reilly, click here.