A real estate deed is a legal document that transfers property ownership from one party (the grantor) to another (the grantee). It’s a means for transferring ownership rights. A valid deed will clearly identify the grantor and grantee and should precisely describe the property. Florida law requires deeds to be signed, witnessed and usually notarized.
Different deeds offer different levels of warranty, which obviously significantly affect the grantor’s obligation and the grantee’s rights. Some provide guarantees against defects that existed before the grantor’s ownership. Others simply transfer the grantor’s ownership.
Six types of real estate deeds
Here are some common types of deeds and how they work:
- General Warranty Deed: This deed provides the highest level of protection to the buyer, assuring that the seller holds clear title to the property and has the right to sell it. It also provides certain “covenants of title” or guarantees.
- Special warranty Deed: This one only covers the period during which the grantor owned the property. It guarantees that there are no defects or liens that arose during that specific timeframe.
- Quitclaim Deed: This deed offers the least protection. It only transfers the grantor’s property interest, which might be very little, with no warranties regarding the title’s quality.
- Life Estate Deed: This Deed is used for estate planning purposes. A Life Estate Deed is a Deed in which the owner of real property grants themselves the right to live in a property for the entire time of their life, and then upon their death, the property automatically conveys to the “Remainderpersons” named in the Deed.
- Ladybird Deed: Also known as an enhanced life estate deed, a Ladybird Deed is a legal instrument that allows the owner to maintain control of a property until their death, at which point the property automatically transfers to a beneficiary without going through probate. Many use it to keep a property in the family without sacrificing Medicaid eligibility or subjecting the asset to state efforts to recover Medicaid costs after death. Unlike a standard life estate deed, clients can revoke or change a Ladybird Deed anytime.
- Deed in Lieu of Foreclosure: The homeowner/borrower gives the legal title of their home to their lender. In exchange, the lender releases you from your mortgage debt. People use this option when a borrower can’t keep up with their mortgage payments and wants to avoid the repercussions of a foreclosure.
Legal assistance is essential
A real estate attorney can provide invaluable assistance in selecting the correct deed. They can research all requirements, negotiate the arrangement, draft the deed, and represent the client in court. An attorney can also help sellers/grantors determine the appropriate deed transfer to perform depending on the unique circumstances of the sale. They can ensure that the deed complies with all applicable laws and that the transaction runs smoothly.