There are various types of deeds with the requirements for each varying by jurisdiction. A deed is generally any legal instrument in writing which passes, affirms, or confirms the interest, right, property, etc. The requirements of a valid deed are that the grantor, the original owner of the land conveys his interest to the guarantee, the recipient of the title. It is also important that the grantor must have legal capacity, which means that the grantor must be a person with a sound mind and with a lawful age- in most of the places the minimum age to fulfill the criteria for legal capacity is eighteen. Besides, a deed is a special type of binding promise to do something.
Difference Between Deed and Agreement
The fundamentals of contract law are to offer and accept- an intention to be legally bound on consideration. Consideration forms the stem for an agreement, the parties need consideration to show that they have ‘bought’ the promise by doing some act or providing something in return for the promise. In contrast to the agreement or contract, there is no requirement for consideration for a deed, consideration is not mandatory, a deed does not need consideration because of the idea that a deed is the most solemn indication that the parties are intended to be bound.
Types of Deeds
This type of deed is largely used for residential real estate sales. A warranty deed acts as a guarantee to the buyer where the seller has all the right to sell the property, and also the property is free from debts and other liabilities, in spite of the warranty deed. If any problems arise the buyer has the right to claim compensation from the seller.
Special Warranty Deed
A Special Warranty Deed is not as same as a warranty deed. Here the seller’s guarantee, given to the buyer will not cover the entire property. Generally, the seller only guarantees for the problems which are created during the seller’s ownership of the property. A special warranty is most often used for commercial property transactions. It transfers all the rights to the buyer but warranties only what is specifically mentioned.
Most often Quitclaim deed is used by the family members, spouses, and mostly by people who are well acquainted with each other which allows one party to transfer property rights and claims to another party.
Bargain and Sale Deed
This deed is typically used for the sale of court-seized properties or real estate sales. In this case, it generally does not guarantee to the buyer that the seller owns the property free and clear.
A grant deed transfers an interest in a property from the seller to the buyer in exchange for an agreed-upon price. It guarantees that the seller absolutely owns the property free from all debts, and it does not provide a guarantee for the defects of the title like the warranty deed.
This fiduciary deed is used to transfer property when the grantor is a fiduciary such as a trustee. This deed only warranties that the fiduciary is acting in his allotted capacity and authority.