What is a Deed?

When you purchase a property in California and have chosen a way to hold the Title. That information is recorded on a Deed. 

 

A Deed is a written document that conveys ownership of a property, its location, and its encumberments. 

 

The signing of a Deed is typically done in the last 24-48 hours of escrow, and once signed and the money is disbursed from escrow, the new Deed is recorded. 

 

Deed Recording 

 

There are several different essentials to a valid deed: 

 

1. It must be in writing; 
2. The parties must be properly described; 
3. The parties must be competent to convey and capable of receiving the grant of the property; 4. The property conveyed must be described so as to distinguish it from other parcels of real property; 
4. There must be a granting clause, operative words of conveyance (e.g., “I hereby grant”);
5. The deed must be signed by the party or parties making the conveyance or grant; and 
6. It must be delivered and accepted.

 

If one purchases a property from a seller that owns it free and clear on the Title, then you own the property free and clear on Title, which is called a Grant Deed. 

 

Grant Deed 

 

The grant deed is used when a person who is on the current deed transfers ownership or adds a new owner. The grantor (donor or seller) promises that all rights to the property are being transferred—there are no hidden owners or easements. 

 

Grant Deeds are the most common type of deed.

 

But other types of Deeds exist. If there is an issue, also known as a “cloud on the Title.” 

 

 A “cloud on the Title” is a minor defect that needs to be removed to perfect the Title.

 

OTHER TYPES OF DEEDS

 

Quitclaim Deed 

 

A quitclaim deed is a deed by which a grantor transfers only the interest the grantor has at the time the conveyance is executed. The grantor is not promising anything other than that they are giving up their own rights if any. 

 

This type of deed guarantees nothing, and there is no expressed or implied warranty that the grantor owns the property or any interest in it. Moreover, a quitclaim deed does not convey any after-acquired title. 

 

A quitclaim deed effectively says, “I am conveying all the title that I have in the property described in this quitclaim – if I have, in fact, any title.” 

 

A quitclaim deed is often used in divorces when one spouse gives up any potential community property interest. 

 

In addition, a quitclaim deed is used to clear some “cloud on the title.”

 

Deeds of court representatives, such as guardians, administrators, and sheriffs, usually have the effect of a quitclaim pursuant to a court order. 

 

Warranty Deed 

 

Warranty deeds are rare in California. 

 

A warranty deed contains express covenants of title. The special feature of warranty deeds is that the grantor promises to pay for any lawsuits or damages due to undisclosed ownership disputes. 

 

In California, this is typically handled by title insurance, so warranty deeds are unneeded and potentially confusing.

 

Trust Deed or Deed of Trust 

 

A trust deed or deed of trust is never used to transfer ownership (not even to a trust). It is the functional equivalent of a mortgage. 

 

A trust deed is a three-party security instrument conveying title to land as security for the performance of an obligation. Like a mortgage, a trust deed makes a piece of real property security (collateral) for a loan. 

 

If the loan is not repaid on time, the lender can foreclose on and sell the property and use the proceeds to pay off the loan. 

 

A trust deed is not used to transfer property to a living trust. Other than terminology, trust deeds and living trusts have nothing in common.

 

A living trust is used to avoid probate, not to provide security for a loan. 

 

Reconveyance Deed

 

A reconveyance deed is an instrument conveying title to property from a trustee back to the trustor-borrower when the money borrowed has been repaid to the lender. 

 

Sheriff’s Deed

 

A sheriff’s deed is a deed given to a party on the foreclosure of property, levied under a judgment for foreclosure on a mortgage or of a money judgment against the property owner. 

 

The title conveyed is only acquired by the state or the sheriff under the foreclosure and carries no warranties or representations whatsoever. 

 

Gift Deed

 

A grantor may make a gift of property to the grantee and use a grant deed or a quitclaim deed form for the purpose. 

 

The grantor may, but need not, say in the deed that the grantor makes the transfer because of love and affection for the grantee. 

 

A gift deed made to defraud creditors may be set aside if it leaves the debtor/grantor insolvent or otherwise contributes to fraud.

 

Revocable Transfer on Death Deed

 

The revocable transfer on the death deed is used to leave property to heirs without the need for probate. 

 

The grantor names the intended heirs as “beneficiaries.” 

 

The deed has no effect until the grantor dies when the beneficiaries record an affidavit to receive the property.

 

Now that you know what a Deed and Title are, how do you know if the property you want to buy is a free and clear Title to order to get that Grand Deed? 

 

Well, first of all, it’s called a Title Report and when you plan to buy a property in California, the seller must provide you with a recent copy of the report. 

 

Most of the time, they provide a copy before you submit an offer, and that Title Report is called a Preliminary Title Report. 

 

Once under contract, if that Preliminary Title Report was older than 30 days, the escrow company must provide a new one that needs to be signed off by the buyer and seller.  

 

Click here to learn how to Read a Title Report