September 5, 2018

For many families, having a place to call home is not just a goal but a foundation for building wealth and stability. However, with this dream comes the responsibility of understanding the legalities surrounding property ownership. Whether you’re buying, selling, or inheriting property, it’s crucial to know what a deed is and the role it plays in safeguarding your investment. 

What is a Deed and Why Are They Important

A deed is a legal document that serves as proof of property ownership. It outlines the transfer of real estate from one party to another and is a critical element in any property transaction. 

However, not all deeds are created equal, and the type of deed used can have significant legal implications. Here’s a breakdown of the most common types of deeds, what they mean for property owners, and how legal assistance can ensure that your property rights are fully protected.

Warranty Deed: Best Buyer Protection

Warranty deeds offer the most robust protection for the buyer (the Grantee) by guaranteeing that the seller (the Grantor) is the rightful owner of the property and has the legal right to transfer ownership. More importantly, the Grantor guarantees that the property is free from any debts, liens, encumbrances, or claims from third parties.

In other words, if any legal issues arise regarding the property’s title after the sale, the Grantor is responsible, not the new owner. This level of protection is invaluable, especially in complex real estate transactions. 

However, ensuring that a warranty deed is properly executed and recorded is crucial. This is where a skilled attorney can be invaluable to ensure all legal requirements are met and your ownership rights are ironclad.

Quit Claim Deed: Simple but Risky

Quit claim deeds transfer whatever ownership interest the Grantor has in the property to the Grantee, but it comes with no warranties or guarantees. Essentially, the Grantor is saying, “I transfer whatever interest I have in this property to you, but I’m not making any promises about the property’s title.” 

These deeds are often used in situations where the property is being transferred without a traditional sale, such as:

• Adding a spouse to a title after marriage
• Transferring a title to one spouse or the other after a divorce
• Gifting a property to someone not on the title
• Transferring a property between family members
• Fixing errors in an existing title such as a typo 
• Transferring property as part of an estate when someone passes

While a quit claim deed can be useful, it can also be risky — especially if there are unresolved issues with the property’s title. For example, if there are undisclosed liens or other issues such as a lis pendens, the new owner would have no legal recourse against the previous owner with a quit claim deed. 

Deed Restricted Communities: Know the Rules Before Buying

Purchasing a home in a deed restricted community means that your property is subject to specific rules and covenants outlined in the deed. These restrictions can cover everything from the color of your home’s exterior to the type of landscaping you’re allowed to have. 

While these restrictions maintain the community’s aesthetic and property values, they can also limit your freedom as a homeowner.

Before purchasing in a deed restricted community, it’s essential to fully understand the implications of these restrictions. An experienced attorney can review the deed restrictions and advise you on how they may affect your property rights and lifestyle. This proactive approach can help you avoid disputes and ensure that your investment aligns with your long-term goals.

Special or Limited Deed: A Middle Ground in Property Transactions

A special or limited deed falls between the quit claim deed and the warranty deed in terms of the protections it offers to the Grantee (the buyer or recipient of the property). A special deed covers only the period when the Grantor held the title to the property — it does not guarantee the property is free from encumbrances that occurred prior to the Grantor’s ownership.

This type of deed commonly arises in the following scenarios:

• Real estate transactions involving foreclosures or auctions: When properties are sold through foreclosure or auction, the seller (often a bank or government entity) may not have complete knowledge of the property’s history. In such cases, a special or limited deed provides a compromise, offering the buyer some protection but not the full guarantees of a warranty deed.
• Estate transfers: When property is transferred as part of settling an estate, executors or heirs may use a special or limited deed to pass on ownership. This is because they may not have complete knowledge of the property’s history before it was inherited, and they may only want to warrant that the property was free of defects during the period it was part of the estate.
• Compromised real estate deals: In transactions where the buyer and seller negotiate terms that fall short of a full warranty but still require some level of assurance, a special or limited deed can serve as a middle ground. It helps facilitate the deal by providing a certain level of protection without obligating the seller to guarantee the property’s entire history.

Difference Between Title and Deed: Clearing Up Confusion

A common point of confusion for many property owners is the difference between a title and a deed. The deed is the physical document that transfers ownership, while the title refers to the legal rights to the property. You can think of the deed as the “receipt” for the property, while the title is the actual ownership.

Understanding this distinction is crucial, especially when dealing with property disputes, inheritance issues, or refinancing. Legal advice can clarify these concepts and help you protect your rights as a property owner.

How Do You Get the Deed to Your House?

If you’re buying a home, the deed to your house is usually provided at closing, signed by the seller, and recorded with the county. This document is essential because it serves as proof of your ownership. If you’re wondering how to get the deed to your house, you can check with your real estate agent or title company to see where the deed is filed. However, in Indiana, deeds are housed in the county Recorder’s Office. 

If your home is here in Tippecanoe county, the county Recorder’s Office can help you get a copy of the house’s deed. You’ll need to provide the property owner’s name, the legal description of the property, and a date of purchase.

Why Having a Lawyer Is Key in Property Transactions

Property transactions are complex, and the stakes are high. Whether you’re a first-time homebuyer or an experienced real estate investor, the legal aspects of property ownership can be challenging to navigate on your own. Deeds are just one piece of the puzzle, but they are a critical one. Ensuring that your deed is accurate, properly executed, and legally sound is essential for protecting your rights and investment.

Working with a knowledgeable real estate attorney can provide the legal expertise and peace of mind you need. From reviewing deeds and titles to representing you in disputes, having an attorney on your side ensures that your property transactions are handled with the utmost care and professionalism.

If you’re starting the home buying process, BB&C can help ensure a smooth transaction and long-term outcomes. We prepare deeds, and can also help determine what specific type of deed and ownership makes sense in your situation before a purchase is made. This is critical, because once a deed type is chosen, it can’t necessarily be undone. At BB&C, we can help you avoid pitfalls and make the savvy real estate decisions that will benefit you in the long haul.

If you have questions about a deed or want help understanding title issues of a property you’re interested in, contact us and see how we can help.

Disclaimer: The content of this blog is intended to be general and informational in nature. It is advertising material and is not intended to be, nor is it, legal advice to or for any particular person, case, or circumstance. Each situation is different, and you should consult an attorney if you have any questions about your situation.