DEEDS

Overview: A deed is the document which acts to pass title of real property from the seller (grantor) to the buyer (grantee). A deed transfers an interest in property from one party to another party. The different types of deeds offer varying levels of protection (warranties) against defects in the ownership of the property. Liens against the property for unpaid taxes or for judgment creditors, adverse possessors, easements, and use restrictions are some of the things that deed warranties may protect against.

Relevant Law: M.G.L. Chapter 183

Important Issues:

Types of Deeds: There are three types of deeds which may be conveyed to the purchaser of property. Each deed type contains different amounts of warranties protecting the grantee-purchaser from possible defects in title that may disrupt the possession and/or ownership of the sale property. The three types of deeds used in Massachusetts are the warranty, quitclaim, and fiduciary deeds.

                ·  Warranty Deed -- This type of deed provides the greatest protection from potential defects in title. The grantor-seller of a warranty deed conveys the strongest type of ownership, fee simple, to the grantee-buyer and guarantees that title is free of all defects, except those specifically mentioned in the deed. In a warranty deed, the grantor-seller promises to defend against all claims against the grantee-buyer which arise as a result of a defect in title arising prior to and

during the grantor-seller’s ownership of the property.

                ·  Quitclaim Deed -- The grantor of a quitclaim deed warrants title against defects arising during the grantor’s association with the land but not against defects arising before that time. Simply stated, the seller conveys to the buyer whatever title he/she held and warrants that he/she has not made any encumbrances on the land other than those specifically mentioned in the deed. This deed is commonly used in Massachusetts.

                ·  Fiduciary or Release Deed -- This type of deed contains the least amount of protection for the purchase. The grantor warrants nothing and merely transfers what title, if any, the grantor-seller has. Fiduciary deeds are appropriate and common where the seller is acting in a fiduciary capacity (e.g. - an executor, trustee, or guardian). Information to be contained in a deed:

                ·  Grantor (Seller) and Grantee (Buyer) must be identified in the deed (contain addresses and the capacity in which a party acts). If there is more than one grantee, the deed should specify the type of co-ownership);

·  A recital of the amount of consideration (monetary or otherwise);

·  Words of conveyance (use of the words “grant”, “convey”, and “release” are common followed by the type of covenants contained in the deed (e.g. - “I hereby grant with quitclaim ovenants...”));

·  Description of property;

·  Title reference (cite the book, page and registry where the title is registered);

·  An account of any easements, restrictions, or other encumbrances (the phrase “subject to easements and restrictions of record insofar as now in force and applicable” is often used);

A deed failing to comply with all of the required content requirements is not necessarily invalid. Instead, a nonconforming deed may not properly be recorded with the Registry of Deeds. Consult legal counsel to ensure compliance with all content and recording requirements.

ative

Frequently Asked Questions:

Q: What is the best way for buyers to protect themselves from unknown title defects that potentially may be discovered subsequent to the sale transaction?

A: Although warranty and quitclaim deeds provide certain warranties protecting against title defects, there are other precautions that may be taken by buyers to protect themselves. Title insurance is a very common way to protect a buyer’s investment. Because of its high level of protection, most lenders will require that the borrowing buyer take out a title insurance policy. A title insurance policy protects against possible defects in title. A title examination and title insurance policy are two of the best ways to ensure that the property has clear, marketable title.

Q: At what point in a sale transaction does title pass from the seller to the buyer?

A: As stated above, a deed passes title of property from one party to another. Possession of the deed by the grantee buyer creates a rebuttable presumption that title to the property belongs with the grantee-buyer. However, even if the grantee-buyer does not have actual possession of the deed, courts will look at the intent of both the grantor-seller and grantee-buyer to determine who holds title. If the parties intend that title pass immediately, then title so passes even though the deed has not physically passed to the grantee nor has the grantor relinquished possession of the property.

This publication is provided as a service to members of the Massachusetts Association of REALTORSÒ and is intended for educational use only. Opinion or suggestions in this publication do not necessarily represent the official policies or positions of the Massachusetts Association of REALTORS.

The Massachusetts Association of REALTORS does not accept responsibility for any misinterpretation or misapplication by the reader of the information contained in this article. The publishing of this material does not constitute the practice of law nor does it attempt to provide legal advice concerning any specific factual situation.

FOR ADVICE ON SPECIFIC LEGAL PROBLEMS CONSULT LEGAL COUNSEL.

ã 1998 The Massachusetts Association of REALTORSÒ