Real Property Deeds: Understanding Types, Titles, and Insurance

Navigating the intricate world of real estate can be a daunting task, especially when it comes to understanding the types of deeds and the security of property titles. In this post, we'll dissect the various kinds of real property deeds and discuss title defects and title insurance to help you get a better sense of how to navigate the world of real estate law. 

Types of Real Property Deeds

There are several types of property deeds. Which one is relevant to you will depend on the property and what the buyer and seller are hoping to accomplish. 

General Warranty Deed

• Definition: This is the most comprehensive type of deed. It provides the greatest protection to the buyer because the seller pledges or "warrants" that they own the property and that there are no outstanding liens, debts, or other title issues.

• Use: Typically used in traditional real estate transactions where the property has a clear title.

Special Warranty Deed:

• Definition: While this deed does provide some warranty, it only covers the period when the seller owned the property. This means the seller is not responsible for any title defects that arose before they took ownership.

• Use: Often seen in commercial real estate transactions.

Quitclaim Deed

• Definition: This deed offers the least protection to the buyer. The seller does not make any warranties or guarantees about the property title. Instead, they are only transferring whatever ownership interest they may have.

• Use: Common in cases of divorce, to transfer property between family members, or when there's a question about title ownership and parties want to avoid potential disputes.

Other Deeds

Different states might have variations or unique deeds specific to their jurisdiction. For example, some states use "Grant Deeds" that function similarly to General Warranty Deeds.

In addition, deeds can sometimes also be limited by other provisions. Contracts that accomplish this are called “restrictive covenants,” and are often used by HOAs and other groups to control what a new owner does with their property. 

Title Defects and Title Insurance

Title Defects

These are issues or discrepancies with the title that can affect ownership rights. Examples include:

• Errors in public records

• Liens against the property

• Unknown easements

• Disputes about property boundaries

• Undiscovered wills

Title Insurance

• Purpose: To protect both buyers and lenders from potential title defects. It's different from other types of insurance because it covers past occurrences rather than future risks.

• What It Insures Against: Title insurance generally covers errors in public records, unknown liens, illegal deeds, missing heirs, and more.

• What It Doesn't Cover: Items not covered can include certain easements, mineral and air rights, or specific liens. Always review your policy to understand exclusions.

Know the Laws with LegalFix

Real property transactions involve nuanced details and legal intricacies. Having a clear understanding of deeds, titles, and related insurance can mean the difference between a seamless property transfer and a tangled web of disputes.

Should you find yourself in the midst of a real estate transaction—or considering diving into one—remember this: Every property has a history, and not all of it might be clear. That's where the expertise of a knowledgeable real property attorney in your state becomes invaluable. From ensuring a property's title is clear to guiding you through the complexities of deeds and insurance, an experienced attorney can be your best ally.

Whether you want to know more about the different types of property deeds or you just want a better understanding of how our legal system works, LegalFix is your go-to source for free legal information. You can find helpful articles and state-specific explanations of nearly 1,600 legal topics—and browse the state and federal statutes to better understand the laws that affect you. Just visit LegalFix.com to find all this content—and check back often for more valuable legal products and services coming soon.