A deed is a real estate document used to transfer the title and ownership of real property to a different owner. A deed can be used for the sale of a home or when transferring property ownership without a sale (probate, gifts, etc.).
There are three basic deeds used in Florida: Statutory Warranty Deed, Special Warranty Deed, and the Quit Claim Deed. There are a multitude of variations of these deeds. All of the preceding deeds, with the exception of the Quit Claim Deed, expressly convey fee simple ownership of property. Fee simple means full and complete ownership of property which can be inherited by the owner’s heirs or devised by the owner’s Will or Trust to the owner’s beneficiaries. A property owned in fee simple is not limited to a specific use or uses as is the case when someone is granted only an easement.
THE STATUTORY WARRANTY DEED (a/k/a) GENERAL WARRANTY DEED
A Statutory Warranty Deed is named as such because a form for the deed (the required language) is set out in Florida Statutes (§689.02 and 689.03). Most importantly, this type of deed not only transfers title but it fully warrants title to the property being conveyed against any and all claims forever (since the beginning of time). This means that if a prior owner breached any of the five covenants and created a defect then the current grantor is liable to remedy the defect. This is also why title insurance is so important and I recommend it on most transactions.
In addition to warranting title, the deed provides the following covenants of title:
- Seisin: The grantor in fact owns the property being conveyed, is the sole owner, and is the only party in possession.
- Right to Convey: The grantor has the right to convey the property.
- Against Encumbrances: The grantor asserts that there are no undisclosed or nonvisible encumbrances against the property being conveyed.
- Quiet Enjoyment: The grantor states that the grantee’s use, possession, and enjoyment of the property will not be disturbed or “disquieted” because of a defect in the title to the property.
- General Warranty: The grantor will protect the grantee from harm caused by title defects and defend the grantee from any claims by others to the property’s title.
These covenants are guarantees (or warranties) the grantor makes that are enforceable by the grantee against the grantor. Should one of the covenants prove to be false, the grantee can seek (and if successful) obtain a judgment against the grantor for the damages the grantee incurred as a result of the covenant being false.
SPECIAL WARRANTY DEED
Compared to the Statutory or General Warranty Deed, a Special Warranty Deed gives only a limited warranty of title by only warranting title against claims of people who are claiming by, through, or under the grantor in the deed. It still provides all the warranties and covenants of a Statutory or General Warranty Deed, but only for grantor and not anybody else. This means the warranties and covenants only cover the time period in which the grantor owned the real property. So, if it is determined that a prior owner of the real property other than grantor caused a defect in title, the grantor is not responsible for remedying the defect.
Special Warranty Deeds are frequently used in commercial real estate transactions and in deeds from developers of condominiums or subdivisions.
QUIT CLAIM DEED
A Quit Claim Deed gives no warranties or covenants of title whatsoever. It simply conveys whatever interest, if any, the grantor may have in the real property to the grantee. These types of deeds are generally used to clear title defects. Title companies generally tend to scrutinize these types of deeds due to the lack of warranty and covenants. The deed gets its name because the grantor is ‘giving up’ or ‘quitting’ his/her claim to the real property.
VARIATIONS OF DEEDS
Trustee’s Deed, Personal Representative’s Deed, Guardian’s Deed – Trustees, Personal Representatives and Guardians are individuals who act as fiduciaries on behalf of someone else. Sometimes they are required to sell and convey real property to others. As someone who transacts on behalf of someone else, a fiduciary generally does not have knowledge of the real property. Therefore, these individuals generally sign a variation of a Quit Claim Deed that provides no warranties or covenants. As there are no warranties or covenants, the individual is protected from liability should the real property have any title defects.
Life Estate Deed - These deeds convey real property to a person for the duration of their life. They can be used for one person or for multiple people (i.e., husband and wife). A Life Estate Deed ends upon a person’s death or in the case of a multi-person deed upon the death of the last grantor. The person or persons who receive the interest in real property for their life or lives is called the “Life Tenant.” Upon the Life Tenant’s death, the person or persons receiving the interest are called the “Remainderman Interest.” There are two types of Life Estate Deeds:
General Life Estate Deed: The person or persons who receive the interest in real property for their life or lives is entitled to possession and use of the real property during their lifetime. Upon the person or persons death then the interest in the property passes to the Remainderman. On a General Life Estate Deed, the Remainderman interest vests immediately therefore, the Remainderman has an immediate interest in the property. As a result, any Remainderman will have to join in or agree to any future sale or mortgage of the real property. This means they would be entitled to a portion of any sale.
Enhanced or Lady Bird Deed: Giving an Enhanced or Lady Bird Deed is similar to a General Life Estate Deed except for the all-important fact that the Remainderman interest is not absolute, and the interest does not vest until the death of the Life Tenant. This means that the Life Tenant can sell, mortgage, or even give away the property without the consent or permission of the Remaindermen.
Fun fact, the Enhanced Life Estate Deed got its nickname allegedly when President Lyndon Johnson’s lawyers created such a deed to convey land to the First Lady, whose nickname was “Lady Bird” Johnson.
Life Estate Deeds are generally used for estate planning purposes. Typically, the owner of property will convey his or her own property to himself or herself (and often his or her spouse) for life, and convey the remainder interest to his or her heirs, i.e., children, grandchildren, nephews, nieces, etc.
No matter the type of deed, Florida law (§689.01) requires that for a deed to be effective it must:
- be in writing;
- contain the grantor name, address, marital status; the grantee name and the property description (metes and bounds)
- be signed by the transferor (the current owner) of the property or his or her duly authorized agent or representative;
- be signed in the presence of two witnesses, each of whom must also sign the deed.
- Be notarized. NOTE: this is not required by §689.01 but is required by §695.26 as it relates to the transfer of an interest in real property. It is also good practice to have the deed notarized to add an indica of authenticity and eliminate the potential for the grantor to argue they never signed the deed.
The deed must also be ‘delivered’ or ‘accepted’ by the grantee.
MOST IMPORTANTLY the deed should also be recorded in the official records of the county in which the real property is located. Recording is not required for the deed to be effective, however, it provides the world notice of your ownership and should alleviate future title issues.
Most importantly, no matter the deed type, if the grantor does not actually own the real property to be transferred, then the real property will not be transferred. Depending on the deed type you may or may not have a remedy via the courts or insurance. However, if you go through the Courts you have to hope the grantor has assets from which to collect. Therefore, it is important for a grantee (and a grantor) to seek out a legal professional and/or title company to perform a title search on the property and provide insurance assuring title. Based upon the results of the search, said professional would determine what deed is proper in your situation depending upon your facts and circumstances. I recommend you speak with a qualified attorney to discuss your situation and determine what is best for you.