Level 20 Chapter 2 Elements of a Valid Deed

Requirements for a Valid Deed

A competent grantor Name of the grantee Granting clause, a.k.a. words of conveyance Statement of consideration Legal description of the property being conveyed Habendum clause Limitations Exceptions and reservations Acknowledgment of the grantor's signature Delivery and acceptance

Signature of Grantor

A deed needs to be signed by all grantors named in the deed. When a grantor's spouse has been named as a grantor, the spouse also must sign. Grantees don't need to sign the deed .Witnesses to the grantor's signature are not typically necessary for the deed to be valid. Still, grantees should insist on the signatures being acknowledged (notarized).

Acknowledgment

An acknowledgment is a formal declaration that the person signing a document is signing it by choice with a real signature. Acknowledgment takes place in the presence of a notary or other authorized public officer, like a judge or justice of the peace. This authorized person serves as the legal witness. Unless the notary personally knows the grantor making the acknowledgment, they will ask to see ID to make sure the signing party is who they say they are.

Delivery and Acceptance

Execution of a valid deed in itself does not convey title. Delivery and acceptance are the required actions for the proper execution of a deed, involving delivery of the deed by the grantor with the intention of transferring title and acceptance by the grantee receiving the property.

Legal Description

For a deed to be valid, it must contain an accurate description of the real estate conveyed. A legal description is a description of a property that is distinct and precise enough to distinguish it from all other properties.

what is a transfer tax?

Here are a few things to know about transfer tax: There will always be a transfer tax, and you have to pay it. The transfer tax can be paid by the buyer or the seller. The amount of the tax depends on the property's sale price. There are some possibilities for exemption from transfer tax.

Multiple Grantees

In transactions where there are two or more grantees, the granting clause has the important duty of clarifying who will receive what rights to the property. Will the grantees be joint tenants or tenants by the entirety (for married couples)? These types of ownership with rights of survivorship must be created intentionally with the wording of the granting clause. This way, if one of the grantees dies, their share of the property will automatically go to the other grantee(s) without the need for a court order or will.

All The Grants must

Let's start with the grantor. A grantor must be: Of legal age, of sound mind

Deed Restrictions

Private land use can be regulated through deed restrictions. Deed restrictions are non-governmental limitations that control the land's use. Some restrictions exist to control and maintain the quality and character of a property or subdivision, and they may be created by private entities, including the property owners themselves.

Type of Deed

Quitclaim deeds may use phrasing like, "quits any and all claims to." A full covenant and warranty deed would tend to say, "grant, sell, and convey with general warranty of title."

Recording the Deed

Recording is not always necessary to make a deed valid. Recording is the act of documenting any transfer or claim of interest in the title to real property in public records per state law. Documents affecting any interest, right, or title to a parcel of real estate should ideally be recorded as constructive notice to the public of ownership — usually at the county level

Reservations and Exceptions

Reservations and exceptions are also known as subject to clauses. A deed might note specific reservations or exceptions that might affect conveyance. Here are some things that may be considered reservations or exceptions: Mortgage liens, taxes, restrictions, minerals or mineral leases, and easements that run with the land Grantor reserving some right to the land for their use Grantor placing certain restrictions on the grantee's use of the property Restrictions on the number of houses built in a subdivision

Granting Clause

The granting clause, also known as words of conveyance, is needed to state the grantor's intention to convey the property. Words like "sell, give, bargain, convey, and grant" are used to make it very clear that the deed is transferring the property from the grantor to the grantee. The granting clause needs to indicate what interest in the property is being conveyed by the grantor at that time

Habendum Clause

The habendum clause is a clause within a deed that clarifies the type and extent of interest conveyed by the granting clause. It serves the purpose of defining or limiting the ownership interest of the grantee (such as a fee simple, defeasible fee, or life estate interest). A habendum clause should follow the granting clause, and its provisions must agree with those set down in the granting clause...The habendum clause is very important. If it's missing from the deed, the legality of the transfer isn't clear, and the title is considered unmarketable.

Grantee should

To be valid, a deed must name a grantee. Their full, proper name (including any designations like Jr. or Sr.) should be listed. This way, it's clear who's getting the title, and the potential for mix-ups is reduced. If the deed is going to be recorded, the addresses of the grantor and grantee should be included as well. If more than one grantee is involved, the granting clause needs to specify each grantee's rights to the property. If a deed names a fictitious person, it's considered void.

Consideration

To be valid, all deeds must have a clause acknowledging that the grantor has received consideration. You may recall from an earlier level that consideration is something of value exchanged by the parties as evidence of agreement to the terms of a contract.