Business Law 101 / DEEDS

By Albert L. Kelley, Esq.

Real property is transferred by recording a deed with the County Clerk’s office. There are various types of deeds and each has a different legal significance.

The most common type of deed is the Warranty Deed. A warranty deed not only transfers the title to the property, it also acts as a guarantee that the seller will defend the property against any claims against the title to the property. It warrants that there are no encumbrances on the property and no other persons have interest adverse to the purchaser’s interest in the property.   This is the strongest form of deed.

Another common transfer document is a quitclaim deed. Often people make the mistake of calling this a “quickclaim” deed due to its use to speed transactions. The true name, “quitclaim” comes from the purpose of the deed. The seller, by issuing the quitclaim deed, quits his claim on the property to the buyer. This deed transfers any rights, title or interest the seller has in the property, if any. There are no warranties or guarantees with a quitclaim deed. Indeed, the person giving the deed does not even need to own the property mentioned. The deed does not even assert that the title to the property is valid. Technically, I could grant a quitclaim deed to the Washington Monument to Bob Smith. The quitclaim deed would be valid, however, it would serve no purpose as I have no ownership interest in that property. Bob Smith could record the deed, but he would have no ownership right in the building because of it. Quitclaim deeds are often used to transfer property between joint owners or to transfer rights in property where the seller does not want or agree to defend against all possible claims.

Another form of deed is a Limited Warranty Deed or a Special Warranty Deed. These serve the same purpose as a warranty deed, but limit the warranties the seller is granting. In other words, the deed may warrant the title is clear as to everything but potential ingress and egress easements of neighboring properties.

Other forms of deeds include probate deeds, whereby the Court issues a deed through a probate proceeding after the property owner dies, and a foreclosure deed, whereby the deed is issued by the Clerk of Court after the property is sold at a foreclosure sale.

In Florida, deeds must be signed by the seller and must be notarized in order to be recorded. The deed also must be signed by two witnesses who actually watch the seller sign the deed (A notary does not have to watch the seller sign the deed, however, the seller must be in the presence of the notary when the deed is notarized). Because the notary is only notarizing the seller’s signature, the notary can also act as one of the witnesses. The deed does not need to be recorded to be effective, however, if it is not recorded, third parties may rely on the public record for the purposes of encumbering the property. In other words, if the deed is not recorded, a claim against the prior owner may take priority over the deed. The prior owner could even mortgage the property and the mortgage would be deemed valid as to the bank (although the owner would have a claim against the prior owner).

Al Kelley is a Florida business law attorney located in Key West and previously taught business law, personnel law and labor law at St. Leo University. He is also the author of “Basics of Business Law” and “Basics of Florida’s Small Claims Court” (Absolutely Amazing e-Books). This article is being offered as a public service and is not intended to provide specific legal advice. If you have any questions about legal issues, you should confer with a licensed Florida attorney.

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