What Is a Property Deed?

What Is a Property Deed?

A property deed is a document that establishes a person's right to own a property. Deeds identify the property's legal owner and are used for both residential and commercial properties. Property deeds must be recorded as part of a chain of title for all properties within a town or county.

Should ownership change hands, a property deed can be used to transfer ownership rights. For example, if you buy a new home, the property deed would transfer from the previous owner's name to yours. Other common reasons for changing a property deed includes marriage, divorce and estate planning. In some cases, property owners may also choose to add someone—such as a partner or child—to an existing deed.

If your name isn't on your property's deed, or you don't have a property deed, you aren't the legal owner in the eyes of the law. Lost deeds, unrecorded deeds, ownership disputes, mistakes on the deed and fraud can sometimes result in ownership disputes or other issues.

Learn more: What Is a Quiet Title Action?

What Does a Property Deed Include?

Property deeds are required to include important information that's used to legally record the transfer of property ownership. Information on a deed may vary depending on the type of real estate transaction, type of property, the parties involved, local laws and other factors.

Typically, deeds must include at least the following the following basic information:

• Buyer and seller information: Legal names and addresses of each party involved in the transfer of property ownership must appear on the deed. If business entities are involved in the transfer, business information should be included.
• Legal property description: Information about property including its street address, property lines, adjacent roads, utilities, subdivision name and other key property record details is recorded.
• Granting clause: This is a specific clause on the deed that explains the "grantor's" interest to sell or transfer the property and spells out the sellers rights to legally sell the property.
• Consideration clause: This clause notes the total value exchanged between the buyer and seller for the property, whether monetary funds or other arrangement.
• Seller's signature: The transferring owner is legally required to sign the deed, but some states may also require the buyer's signature, witness signatures and notarization.

Learn more: What's the Difference Between a Deed and a Title?

Types of Property Deeds

Many types of property deeds can be used to establish ownership. Which deed is the best fit typically depends on the type of property transaction and how much protection the buyer needs.

Here's a closer look at some common types of property deeds:

General Warranty Deed

General warranty deeds are one of the most secure types of deeds. They're often used for real estate transactions, such as taking out a mortgage. Like all property deeds, general warranty deeds transfer property ownership between parties, typically from from the seller to the buyer.

But this type of deed also provides a guarantee that the transferring party (the grantee) has the legal right to transfer ownership. A general warranty deed also promises the buyer that there are no issues with the title and that the property is free of any liens, encumbrances or debts.

Since the deed must be guaranteed by the grantee, the buyer can sue for compensation if any of the promises turn out to be untrue.

Special Warranty Deed

Special warranty deeds, also known as grant deeds or limited warranty deeds, can be used for real estate transactions like general warranty deeds. But they're more commonly used to transfer property between spouses and during foreclosures or tax sales. Grant deeds guarantee that there are no title problems or issues with the property, like liens or debts. But protection is limited to the seller's ownership period.

By contrast, general warranty deeds cover a property's entire history. If you're purchasing a property that's had multiple owners, it's a good idea to weigh out any risks before choosing this type of deed for the transaction.

Quitclaim Deed

Quitclaim deeds are used to transfer ownership during no-sale property transfers. They're commonly used when property changes hands between family members, like during a divorce. But they can also be used to correct errors made with past property deeds. Additionally, quitclaim deeds are used to transfer property in and out of businesses or trusts for estate planning purposes.

Unfortunately, quitclaim deeds don't offer any protection against title or property issues. The transferring party isn't required to disclose any problems, like liens or use restrictions on the property, which can put the new owner at risk for potential issues down the line.

Learn more: How to Change the Title of Your Home

Special Purpose Deed

Special purpose deeds are generally used for court purposes and don't offer any protections to buyers. While there are many types of special purpose deeds, some of the most common options include:

• Executor's deed: Transfers property ownership after someone dies and names a grantee in their will
• Deed of gift: Used when a property is gifted without an exchange of funds
• Tax deed: Transfers property ownership to the government to auction property off to pay for unpaid tax debt
• Sheriff's deed: Transfers property to a new owner if lender is forced to sell foreclosed property
• Deed in lieu of foreclosure: Used by homeowners as a way to avoid foreclosure by transferring the property ownership back to the bank or lender

Property Deed vs. Title

The terms "deed" and "title" are often used interchangeably, but they actually have different meanings. A deed is a legal document that states you own a property, while a title is the concept of legal ownership that the deed grants. When buying a home, or other type of residential or commercial property, you'll need both a deed and a title to make the purchase legal.

Here's a closer look at some of the key differences between between deeds and titles:

How to Get a Property Deed

Property deeds are filed with your local courthouse or county assessor's office. So, to get a copy of an existing property deed, you'll need to check with your town clerk's office or county record.

If you're in the middle of a property transaction, a real estate attorney or title company typically handles getting the property deed sorted. They'll sometimes also work with the escrow company, bank and real estate agents to prepare the deed.

Most states require property deeds to be notarized and filed with the land records where the property is located. In some states, a witness is also needed. Skipping these important legal steps can affect ownership rights for both parties or the validity of the deed entirely. When the deed is filed, the recorder's office keeps a certified copy and returns the original to the transferring party.

The Bottom Line

Property deeds are important legal documents that transfer ownership of physical property, like a home. They're also used to prove you are the legal owner. If your name isn't listed on your home's deed, or deed paperwork wasn't recorded and filed properly after a real estate translation, your rights to a piece of property you think you own could be at risk.

To avoid potential issues, it's crucial to choose the right type of deed and ensure the correct information is recorded and filed when transferring property. It's also a good idea to check on your property deed records from time to time to make sure everything is accurate.