A deed is a legal document that transfers title to a new holder of a property. The deed is the vehicle for transferring a title, but is not the title itself. The signing of a deed must be notarized and filed in the public record in order to make the document binding in the court of law.
Your escrow officer will help you determine which type of deed to file. The information below outlines the specifications of each.
Understanding The Grant Deed
The grant deed is a document that officially transfers title from one individual to another during the closing process.
The grand deed guarantees that the property has not been sold to anyone else and that the house is not under any liens or restrictions that have not already been disclosed. For the buyer, it is critical to guarantee that there are no legal claims to the property by third parties, and no taxes are owed on the property that would restrict its sale.
A grant deed requires:
- The grantor’s signature, which must also be acknowledged with a California all-purpose acknowledgment
- A certificate of acknowledgment endorsed on the deed (CIV 1188)
- Grant deeds submitted for recording must be accompanied by a completed Preliminary Change of Ownership Report
A grant deed offers more protection to a buyer than a quitclaim deed, but less protection than a warranty deed. The main difference between a warranty deed and a grant deed is that in a warranty deed, the grantor will warrant and defend the title against the claims of all persons.
Understanding The Quitclaim Deed
A quitclaim deed is a legal document that lets a property owner transfer his ownership interest in property to a recipient without the security of ownership. Quitclaim deeds are rarely used when selling property, but are useful for transferring ownership between family members or transferring ownership into a living trust. It provides the least protection for a real estate grantee. The grantee is receiving title to the property “as is,” and there may be encumbrances, known or unknown on that property that the grantee is receiving.
If a seller owns a building, he can give a quitclaim deed to the buyer and the seller’s entire interest has been transferred. The quitclaim can be used to remove apparent defects in Title without the expense of a lengthy litigation process. Quitclaim Deeds can be used to add a spouse to a property title after marriage, remove a spouse from a title after divorce, clarify ownership of inherited property, transfer property into or out of a revocable living trust, or change how a property’s title is held.
Understanding Interspousal Deed
Another way to accomplish a property transfer between spouses is through the Interspousal Deed, which can be used to avoid tax liability when transferring property. In short, one spouse can give his or her own property to the other, and the property becomes the receiving spouse’s separate property.
When Title to the property is transferred, the county may impose a transfer tax and may reassess the value of the property which could result in higher property taxes. However, an interspousal transfer deed is a special kind of transfer that is exempt from transfer taxes and ultimately a cost-effective method of transferring property between spouses.
