In its simplest sense, a deed is the legal document by which real property is transferred from one party to another. The party transferring the property is known as the Grantor, the party receiving the property is the Grantee.
Elements of a Deed
Let’s first start with certain elements that a deed must contain in order for it to be considered valid.
Capable Grantor and Grantee
Most deeds will start off by reciting the party or parties who are granting the property and who are receiving the property. It is important that the Grantor and Grantee be legally capable to do so. Consider the following:
- Is the Grantor a minor? Minors can legally take title to real estate, however, when they sell or mortgage the property they’ll need proper authorization to do so.
- Is their evidence that the Grantor/Grantee alive (or deceased)?
- Is the Grantor authorized to sign on behalf of the LLC, Corporation or Partnership?
While the above may or may not invalidate the conveyance, a title examiner will most likely pick up any defects and require satisfactory evidence prior to insuring a sale or refinance of the property.
The next element you should notice as you continue down the form of deed is a recitation that consideration was paid. Consideration can be defined as some form of payment. The sales price is an obvious example, but consideration may also include intangibles such as “love and affection”. While the lack of consideration will not invalidate a deed, it may result in the failure to establish the priority of the conveyance. Most grantors/grantees elect not to publicize the amount paid, and therefore recite consideration to be “in the sum of $10 and other valuable considerations”.
Of course, since the purpose of the deed is to transfer the property from the Grantor(s) to the Grantee(s), the deed must contain proper language granting the property from one to the other. The typical language reads: “grants, bargains, sells, aliens, remises, releases, conveys and confirms unto the Grantee, all of the Grantor’s right, title and interest in the property described herein”. While there are many difference variations of the granting clause, it must be clear that the Grantor is transferring the property to the Grantee.
Description of the Land Conveyed
An unambiguous legal description of the property being transferred, granted or conveyed must be shown on the deed. The most common forms of legal description include metes and bounds (measurements and distances), lots within a platted subdivision, units within a condominium and quarter references within a section/township/range. Note while a property appraiser’s parcel identification number may help clear up any discrepancies with the legal description, the number alone may not be used as a substitute to a legal description of the property.
Discrepancies in legal descriptions are typically resolved using the hierarchy of canons of construction. The priority has historically been placed on monuments/things people can see. The interesting logic behind this is that when purchasing property, the buyer can see things such as how far they’d be from a tree or a riverbed; they cannot visualize measurements and names as easily. The hierarchy is as follows:
- Original Survey Monuments. Being natural objects or stakes placed by the surveyor when the land is conveyed, these will take priority over;
- Natural Monuments. Calls to an oak tree, rock structure or river, these will take priority over;
- Artificial Monuments. Fence, Building or Tower, these will take priority over;
- Maps. A survey of the property depicting the boundaries and measurements, will take priority over;
- Courses and Distances. A metes and bounds description consists of courses (angles) and distances (measured lengths). For legal descriptions that do not close because of errors in distances, the course (angle) will take priority and cause any distances to be shortened or lengthened for the description to close. These will take priority to;
- Names and Quantities. Descriptions such as “Isle of Sicily” or “being 500 acres” are the most ambiguous and are lowest in priority when evaluating a legal description.
Signature and Acknowledgement
A deed must be signed by the Grantor and two subscribing witnesses in order to be valid. While an acknowledgment by a notary public does not affect the validity of the deed, it is a requirement to record the document in the public records – thus providing notice to all others. The notary may also sign (in addition to their signature as notary) as one of the two required witnesses. Additionally, homestead property conveyances must be joined by the spouse.
Delivery and Acceptance
The final element of a proper conveyance is the delivery by the Grantor and acceptance by the Grantee. Generally, the Grantor must physically deliver the deed to the Grantee. The Grantee must then accept the conveyance.
While there are numerous deviations from a clean delivery and acceptance, the most common example involves incorrect Grantor or Grantee names in the deed. For example, XYZ Properties, Inc. has a contract with ABC Land Development LLC, but mistakenly deeds to “ABC Land LLC”. Assuming ABC Land LLC is not related to the transaction, the deed was intended to go to ABC Land Development LLC and was therefore never delivered to nor accepted by ABC Land. Most underwriters would require an affidavit be recorded in the public records noting that the improper Grantee’s name was listed and require a new deed into the correct Grantee be recorded.
Are you ready for an even more detailed explanation of deeds (and the template forms). Download our Deeds & Conveyances eBook. Here’s what it includes:
- Template copies of Warranty, Special Warranty, Quitclaim, Corrective Deeds as well as a sample Scrivener’s Affidavit.
- A detailed explanation of the requirements of a valid deed.
- Questions you need to ask yourself before sending your deed to be recorded.
- How to correct an error with a deed in your chain of title.
- Much more.