What is Voluntary Property Transfer? - Defining Title by Deed

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  • 0:05 Voluntary Property Transfers
  • 2:07 What Is a Deed?
  • 4:17 Two Types of Deeds
  • 6:15 Delivery and Acceptance
  • 8:08 Recording the Deed
  • 9:46 Lesson Summary
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Lesson Transcript
Instructor: Ashley Dugger

Ashley is an attorney. She has taught and written various introductory law courses.

A conveyance happens when a property owner transfers property to a new owner. This is known as a voluntary property transfer, or title by deed. This lesson explains voluntary property transfers and title by deed.

Voluntary Property Transfers

Today, you're a real estate attorney! Mary Mulligan and her three sisters are selling their family home. It's been in their family for almost a century and changed hands within their family many times. They've hired you to help them because this will be the first time it will be owned by someone outside of the Mulligan family, and there's a lot involved to make sure this conveyance, or property transfer, goes smoothly.

The sale of real estate is one form of voluntary property transfer, or property conveyance. Property is also voluntarily transferred when it's gifted or left through a will. Voluntary transactions may seem straightforward, since they're transactions that are purposeful and intended by both parties. But, the act of transferring real property can sometimes be complicated.

This is because there are several different legal steps that must be achieved before a property is considered to be properly, and therefore legally, transferred. As the attorney, this will be your job. You will determine which steps the family must take, and then help the family take those steps in order to secure a legal transfer of the property. You'll oversee the signing, sealing and delivery of this entire legal process for Mary and her sisters. Let's take a look at the process.

What Is a Deed?

You'll want to start by discussing the deed with Mary and her sisters. A voluntary property transfer is also known as a title by deed. This is because title is defined by who holds the deed. A deed is the legal document that transfers ownership of the real property from one party to another. Title is simply another word for ownership. Let's say that Mary and her sisters sell the Mulligan house to Max. They'll execute a deed that transfers ownership, or title, of the house to Max. Max will have title by deed.

Mary and her sisters will need to put together a deed for the new owner, but the deed won't be quite that simple. As the attorney, you need to make sure that the deed contains certain legal details. By law, the deed must be drafted so that it meets particular execution, or procedural requirements.

In order to be legally executed, or finalized, a deed must:

  • Identify the buyer
  • Identify the seller
  • Identify the property using the legal description
  • Be signed by the person transferring the property and
  • That signature must be properly notarized

The legal description of the property is a description of the property using the U.S. Public Land Survey system rather than a numbered street address system. This legal description is required in all instruments of conveyance, but remember that the Mulligan family has owned this home since it was first built.

There's a possibility that this property has never had a survey done or that one was done but it's been lost. You'll need to research this issue. If there's no recent legal description of this property, then you'll need to order a survey of this property so that an accurate legal description can be added to the new deed.

Two Types of Deeds

Generally speaking, there are two main types of deeds used in voluntary real property transfers. You need to decide which one would be best for Mary and her sisters to use. The first is a warranty deed. This is the most common type of deed. This type of deed transfers ownership and promises, or warrants, that the seller is transferring a good and legally valid title to the property.

You'll use this type of deed if your title research shows that Mary's family holds a clear, legal title to the house. The Mulligan family's warranty deed to Max, then, might say, 'We promise that we own the house that we're selling you, and the title to it is legally valid and good.'

The second type is a quitclaim deed. This type of deed transfers the ownership interest the seller has in the property, but doesn't promise, warrant or guarantee that interest. Remember that the Mulligan house has changed hands many times throughout the generations. Mary tells you that it's been mortgaged several times and that it was maybe even foreclosed on. Several years ago, Mary and her sisters even remember hearing a story that Great Uncle Samuel lost the house in a bet back in the 1920s.

This is all concerning! If your research shows that Mary and her sisters may not have good or full title to transfer, then perhaps you'll want to suggest that they use a quitclaim deed. The Mulligan family's quitclaim deed might include language that says something like, 'We fully transfer to you the entire interest that we own in the house, whatever that interest might be. However, we don't warrant that interest or guarantee our title that we're selling you, and we don't hereby guarantee that we own any particular interest in the property.'

Delivery and Acceptance

Once you've decided what type of deed would be best, you know you'll need to draft and execute that deed. Once the deed is executed, the next step is delivery and acceptance of the deed. These steps involve the participation of the buyer.

Delivery and acceptance means that the executed deed must be delivered to, and accepted by, the buyer of the property. If the property is being gifted, rather than sold, then delivery and acceptance will involve the person to whom the property is being transferred. Delivery and acceptance might seem trivial, but it must take place in order to have a legal conveyance of the property. For this reason, the delivery and acceptance are normally handled in an official and more formal manner.

For example, as the attorney, you won't want to send your assistant Skip over to leave the executed deed on Max's front porch. This isn't an official delivery, and Max didn't, as far as we know, accept the deed. We won't know if Max ever actually got the deed. It would, however, be acceptable to mail the deed to Max using certified mail, so that Max has to sign for the deed when he receives it. That way, we know the deed was delivered and that Max accepted it.

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