Deed

For the British cargo ship, see SS Deed.

Property law
Part of the common law series
Acquisition
Gift · Adverse possession · Deed Conquest · Discovery · Accession Lost, mislaid, and abandoned property Treasure trove  · Bailment · License Alienation
Estates in land
Allodial title · Fee simple · Fee tail Life estate · Defeasible estate Future interest · Concurrent estate Leasehold estate · Condominiums Real estate
Conveyancing
Bona fide purchaser Torrens title · Strata title Estoppel by deed · Quitclaim deed Mortgage · Equitable conversion Action to quiet title · Escheat
Future use control
Restraint on alienation Rule against perpetuities Rule in Shelley's Case Doctrine of worthier title
Nonpossessory interest
Easement · Profit Covenant Equitable servitude
Related topics
Fixtures · Waste · Partition Riparian water rights Prior-appropriation water rights Lateral and subjacent support Assignment · Nemo dat Property and conflict of laws · Blackacre
Other common law areas
Contract law · Tort law Wills, trusts and estates Criminal law · Evidence
v · d · e

A deed is any legal instrument in writing which passes, or affirms or confirms something which passes, an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed. A deed, also known as an instrument in solemn form, is the most formal type of private instrument requiring not only the maker of the deed (grantor, transferor) but also attesting witnesses as signatories. A deed has therefore a greater presumption of validity and is less rebuttable than an instrument under hand, i.e., signed by the party to the deed only, or an instrument under seal. A deed can be unilateral or bilateral. Deeds include conveyances, commissions, licenses, patents, diplomas, and conditionally powers of attorney if executed as deeds. The deed is the modern descendant of the medieval charter, and delivery is thought to symbolically replace the ancient ceremony of livery of seisin.^[1]

The use of attesting witnesses has replaced to a large extent the former use of seals to create a higher degree of formalism; this explains the traditional formula signed, sealed and delivered and why agreements under seal are also called contracts by deed. Where the use of seals continues, deeds are nothing more than a special type of instrument under seal, hence the name specialty for a contract under seal. Specialties differ from a simple contract, i.e., a contract under hand, in that they are enforceable without consideration (i.e. gratuitous), in some jurisdictions have a liability limitation period of double that of a simple contract, and allow for a third party beneficiary to enforce an undertaking in the deed, thereby overcoming the doctrine of privity.^[2] Specialties, as a form of contract, are bilateral and can therefore be distinguished from covenants, which, being also under seal, are unilateral promises.

At common law, to be valid and enforceable, a deed must fulfill several requirements:

• It must state on its face it is a deed, using wording like "This Deed..." or "executed as a deed".
• It must indicate that the instrument itself conveys some privilege or thing to someone. This is indicated by using the word hereby or the phrase by these presents in the clause indicating the gift.
• The grantor must have the legal ability to grant the thing or privilege, and the grantee must have the legal capacity to receive it.
• It must be executed by the grantor in presence of the prescribed number of witnesses, known as instrumentary witnesses (this is known as being in solemn form).
• In some jurisdictions, a seal must be affixed to it. Originally, affixing seals made persons parties to the deed and signatures were optional, but most jurisdictions made seals outdated, and now the signatures of the grantor and witnesses are primary.
• It must be delivered to (delivery) and accepted by the grantee (acceptance).
• It should be, but not necessarily, properly acknowledged before a competent officer, most often a registrar (deeds office, deeds registry) or notary public.^[3]

Conditions attached to the acceptance of a deed are known as covenants. A deed indented or indenture is one executed in two or more parts according to the number of parties, which were formerly separated by cutting in a curved or indented line known as the chirograph.^[4] A deed poll is one executed in one part, by one party, having the edge polled or cut even, and includes simple grants and appointments.

Deeds of conveyance

General and special warranty

Main article Warranty deed

The original 1636 Indian deed creating the State of Rhode Island signed by Native American Chief Canonicus to Roger Williams

In the transfer of real estate, a deed conveys ownership from the old owner (the grantor) to the new owner (the grantee), and can include various warranties. The precise name and nature of these warranties differ by jurisdiction. Often, however, the basic differences between them is the degree to which the grantor warrants the title. The grantor may give a general warranty of title against any claims, or the warranty may be limited to only claims which occurred after the grantor obtained the real estate. The latter type of deed is usually known as a special warranty deed. While a general warranty deed was normally used for residential real estate sales and transfers, special warranty deeds are becoming more common and are more commonly used in commercial transactions.

Bargain and sale deed

Main article Bargain and sale deed

A third type of deed, known as a bargain and sale deed, implies that the grantor has the right to convey title but makes no warranties against encumbrances. This type of deed is most commonly used by court officials or fiduciaries that hold the property by force of law rather than title, such as properties seized for unpaid taxes and sold at sheriff's sale, or an executor.

Quitclaim deed

Main article Quitclaim deed

A so-called quitclaim deed is (in most states) actually not a deed at all—it is actually an estoppel disclaiming rights of the person signing it to property.

Deed of trust

In some jurisdictions, a deed of trust is used as an alternative to a mortgage. A deed of trust is not used to transfer property directly. It is commonly used in some states — California, for example — to transfer title to land to a “trustee”, usually a trust or title company, which holds the title as security ("in escrow") for a loan. When the loan is paid off, title is transferred to the borrower by recording a release of the obligation, and the trustee's contingent ownership is extinguished. Otherwise, upon default, the trustee will liquidate the property with a new deed and offset the lender's loss with the proceeds.

Deeds as alternatives to bankruptcy

• Deed of arrangement - document setting out an arrangement for a debtor to pay part or all outstanding debts, as an alternative to bankruptcy; (Australian law).^[5]

• Deed of assignment - document in which a debtor appoints a trustee to take charge of property to pay debts, partly or wholly, as an alternative to bankruptcy; (Australian law).^[6]

Structure

The main clauses of a deed of conveyance are:

• Premises
  • Parties clause - sets out the names, addresses, and descriptions (vendor/purchaser, grantor/grantee, transferor/transferee) of parties
  • Recitals - narrates in chronological order the previous ownership of the property being conveyed, starting with the earliest deed of title down to the contract of sale the conveyance gives effect to
  • Testatum - a command to witness which acknowledges the payment and receipt of the consideration and signals the beginning of the operative part; usually begins with "Now this Deed witnesseth"
• Operative part
  • Operative clause - vendor gives effect to the contract of sale by conveying his interest in land to the purchaser
  • Parcels clause - clause detailing the location and description of the property being conveyed
  • Habendum - clause indicating the estate (freehold, etc.) or interest to be taken by the grantee^[7]
  • Tenendum - "to have and to hold", formerly referring to the tenure by which the estate granted was to be held, though now completely symbolic
  • Redendum - reserves something to grantor out of thing granted, such as a rent, under the formula "yielding and paying".
  • Conditions
  • Warranty - grantor warrants the title to the grantee
    • general: when the warrant is against all persons
    • special: when it is only against the grantor, his heirs and those claiming under him
  • Covenants - binding limitations or promises
• Conclusion - execution and date
  • Testimonium (Scotland: testing clause) - attests to the due execution of a deed or instrument.
    • Examples:
      • England & Wales: In Witness Whereof, the parties to these presents have hereunto set their hands and seals.
      • Ireland: In Witness Whereof the parties hereto have hereunto set their hands and affixed their seals [the day and year first herein written].
      • Scotland: IN WITNESS WHEREOF these presents, consisting of this and the preceding pages, are subscribed by [me] at [place] on the [day] day of [month] Two thousand and [year] in the presence of [name] of [address].

Recording

Main article Recording (real estate)

Usually the transfer of ownership of real estate is registered at a cadastre in the United Kingdom. In most parts of the United States, deeds must be submitted to the Recorder of deeds, who acts as a cadastre, to be registered. An unrecorded deed may be valid proof of ownership between the parties, but may have no effect upon third-party claims until disclosed or recorded. A local statute may prescribe a period beyond which unrecorded deeds become void as to third-parties, at least as to intervening acts.

Joint ownership

Ownership transfer may also be crafted within deeds to pass by demise, as where a property is held in concurrent estate such as "joint tenants with right of survivorship" (JTWROS) or "tenants by the entirety". In each case, the title to the property immediately and automatically vests in the named survivor(s) upon the death of the other tenant(s).

In most states joint tenancy with the right of survivorship requires all owners to have equal interests in the property, meaning upon sale or partition of the property, all owners would receive an equal distribution of the proceeds.

Joint ownership may also be by tenants in common (TIC). In some states, joint ownership is presumed to be as tenants in common unless the parties are married and the deed so states or the deed sets for joint tenants with right of survivorship. Upon death, the decedent's share passes to his or her estate.

A life estate is the right to use, possess and enjoy the property for a period of time measured by the natural life of a person or persons. When all life tenants are dead, the remainderman holds full title.

Joint tenants with rights of survivorship vs. joints tenants in common

When deeds are taken as joint tenants with rights of survivorship (JTWROS) or joint tenants in common (TIC), any co-owner can file a petition for partition to dissolve the tenancy relationship. JTWROS deed holders always take the property in equal shares; therefore, if the partnership is dissolved through partition, the proceeds must be equally distributed between all of the co-owners without regard to how much each co-owner contributed to the purchase price of the property. No credits would be allowed for any excess contributions to the purchase price. For example, if A and B co-own property as JTWROS and A contributed 80% of the purchase price, A and B would still receive equal distributions upon partition. On the other hand, TIC deed holders may be granted at partition a credit for unequal contributions to purchase price. During either partition, credits may be awarded to any co-owner who may have contributed in excess of his share to the property expenses after taking deed to the property. Credits may be allowed for utilities and maintenance; however, credits for improvements may not be allowed unless the improvements actually added substantial value to the property.

Pardon as deed

In the United States, a pardon of the President was once considered to be a deed and thus needed to be accepted by the recipient. This made it impossible to grant a pardon posthumously. However, in the case of Henry Ossian Flipper, this view was altered when President Bill Clinton pardoned him in 1999.

Title deed

The United Kingdom, England and Wales operate a 'property register'. Title deeds are documents showing ownership, as well as rights, obligations, or mortgages on the property. Since around 2000, compulsory registration has been required for all properties mortgaged or transferred. The details of rights, obligations, and covenants referred to in deeds will be transferred to the register, a contract describing the property ownership.

Difference between deed and an agreement

The main difference between Deed and an agreement is that the deed is generally signed by only one person / party. Examples of the Deed are Deed of Hypothecation for creating charge on movable properties in favour of the banks / financial institutions etc.

Agreement by it names suggests that there should be at least two parties signing / approving the same. Examples of the agreement are Agreement to sale, Loan Agreement etc.

At common law, ownership was proven via an unbroken chain of title deeds. The Torrens title system is an alternative way of proving ownership. First introduced in South Australia in 1858 by Sir Robert Torrens and adopted later by the other Australian states and other countries, ownership under Torrens title is proven by possession of a certificate of title and the corresponding entry in the property register. This system removes risks associated with unregistered deeds and fraudulent or otherwise incorrect transactions. It is much easier and cheaper to administer, lowering transaction costs. Some Australian properties are still conveyed using a chain of title deeds - usually properties that have been owned by the same family since the nineteenth century - and these are often referred to as 'Old System' deeds.

Wild deeds

A deed that is recorded, but is not connected to the chain of title of the property, is called a wild deed. A wild deed does not provide constructive notice to later purchasers of the property, because subsequent bona fide purchasers can not reasonably be expected to locate the deed while investigating the chain of title to the property.

See also

• Deed poll
• Grant deed
• Quitclaim deed
• Warranty deed
• Covenant (law)

References

1. ^ E. Rory O'Connor, The Irish Notary (Dublin: Professional Books, 1987), 83:12n.
2. ^ Andrew Griffiths, Contracting With Companies, (London: Hart Publishing, 2005), 7.
3. ^ Lectlaw, s.v. "deed", retrieved 19 May 2009. [1].
4. ^ Frederic Jesup Stimpson, Glossary of Technical Terms, Phrases, and Maxims of the Common Law, s.v. "Deed" (Boston: Little, Brown and Co., 1881), 108.
5. ^ "Glossary", The Law Handbook Online, retrieved on 11 June 2009
6. ^ Ibid.
7. ^ Stewart Rapalje and Robert L. Lawrence, eds., A Dictionary of American and English Law, s.v. "Habendum" (Jersey City, N.J.: F.D. Linn, 1888), 589.