What Do You Need to Know about Deeds?
This is my 71st article posted in 2010. I shall try for 100 in 2011. I hope what I have written is of some continuing value to you and others.
If you are ever going to own real estate, or an interest in real estate you will need a deed, to receive it or convey it away. Two related documents are a deed of trust and land contract, which I shall also discuss.
People call me and say, “I want to put this property in my own, or someone else’s, name.”, much like the title to a vehicle or boat. There is a similarity, but a deed “grants and conveys” the interest, or part of the interest, of the seller or “grantor” to the buyer or “grantee”.
In early England, the parties to a deed went on the property, found a pebble or a “peppercorn” and in “consideration” of something of value, handed that item to the receiving party. By this act the grantee became “seised”(the owner) of the property. The symbolic act, and delivery of the deed, conveyed the title.
My law school real estate professor, Londo Brown, described “fee simple” or the entire piece of real estate as a pie. The pie can be cut into pieces, and the pieces can be conveyed separately. In WV, the underlying property, coal, oil and gas, and even limestone can be “severed” and reserved by the grantor, or conveyed separately.
And, different people can own undivided shares of the same real estate. This happens when a property owner dies and leave property by will or by intestate succession (no will) to his children.
Joint owners can be “tenants in common” in which event when one of them dies, that person’s share goes to her heirs. They can also be “joint tenants by survivorship” in which event the surviving owner becomes the owner of the entire property the instance the other owner passes on. Most husbands and wives purchase real estate “with survivorship”. The resultant transfer in real estate is a transfer of “non-probate property”. It is not part of that person’s estate.
A deed should have the name, marital status, and spouse of, the Grantor(s). The names of the Grantor(s)/Grandtee(s) should be the accurate full name, or at least first name, middle initial, and last name. It must also include the date of conveyance, the warranty (General, Special, Quitclaim, etc.), “granting language”, the County, District, and State where the property is located; any interests reserved, such as a right of way for ingress and egress, or interests conveyed away prior, such as the coal, oil, and gas, and the “back reference”. The back reference is the citation to the deed or will which is the source of the Grantor(s’)title. It should list the Grantor(s) or Testator(s) and the date, and book and page number of the document.
It is very frustrating to trace a chain of title to real estate back to a deed or will that gives you no clue how the former owner acquired title to the property. Then the searcher must compare entries in the land books, tracing year by year so as to locate the Assessor’s note as to the source of the new entry. I check each five years until I encounter the change, then move a year at a time until located. The clerk nearly always lists the source of title by book and page number.
In WV, most people who borrow money in order to purchase property have to convey “legal title” to the property to a trustee in order to “secure” the lender’s interest in the pledged property. If there is a “default”, notice is sent, and the Trustee may advertise the sale with a flyer on the Courthouse door and then sell on the Courthouse steps. This is called foreclosure. There are attorneys whose primary focus is protecting borrowers from fraudulent or irregular loan practices. I once got a bank to write off a $200,000 loan that was improvidently made to a naive, inexperienced purchaser. The loan should never have been made, but the borrowers’ parents were good customers and the loan officer failed to use “due diligence”.
An “evil twin” to a deed is a “land contract”. Land contracts are usually entered into by “substandard” purchasers who cannot get a conventional loan. They agree to pay periodic payments, and even a down payment, and sign a note, just like the grantor of a deed of trust, but the worst land contracts say that even if the buyer misses only the last monthly payment, the seller can declare a default, voiding the contract and depriving the buyer any “equity” in the property, OR the value of improvements. If that buyer is unrepresented, and the seller has the attorney, I think such contracts can be declared unconscionable, but no one should take that risk. I do not think a lawyer can, in good faith, negotiate such a contract with the unrepresented buyer, but some do.
At the end of each transaction, whether by deed and deed of trust and note, or by land contract and note, the buyer must get and record a release of deed of trust (lien), or the deed from the owner. Always remember to records these items. Without the release of lien, you will not find a buyer. If your deed is not recorded, the seller can actually sell to another buyer. If that buyer is a “bone fide purchaser in good faith”, and not a co-conspirator, he/she acquires title and your only recourse is the crooked seller. SO RECORD YOUR DEEDS, DEEDS OF TRUST, LIENS, AND RELEASES.
I am not a “deeds and wills” attorney, but I have done my share. Call and I shall help you or guide you to an attorney adept at real estate transactions.
This post was written by Burton Hunter