Buying a property involves a number of terminologies that a first-time buyer might find somewhat daunting. To make property transactions hassle-free, it’s always better to be a little prepared when it comes to understanding legal documents.
One of the important documents necessary for property transactions is the Property Deed. This is an important written, signed and attested legal document which represents ownership of property and becomes necessary when transferring property titles from the old owner (Seller) to the new owner (Buyer). This document must include a number of features including a detailed description of the property, the names and proper identifications of the parties involved in the transaction as well as the signature of the seller.
Legal elements of a binding Deed:
- For a deed to be legally operative, it should be in writing.
- The seller should have legal rights to transfer ownership of the property.
- The seller and the buyer must be ascertainable people to make a valid contract.
- For the deed to be legally binding, it should be signed by all parties mentioned as owner of the property.
- The deed should include a detailed description of the property involved.
- The document must include important legal language for effective transfer of property.
- The deed has to be legally handed over by the seller and likewise legally accepted by the buyer.
Depending on the situation, deeds can be categorized into different types in relation to the type of warranty being offered by the grantor. Here’s a brief look at the different categories:
General Warranty Deed
This is the safest form of deeds and guarantees there are no claims or encumbrances attached to the property. It provides protection to the buyer from any other claims to the property.
Special Warranty Deed
This unique type of deed protects the buyer specifically from any problems associated with the current seller or grantor. It, however, doesn’t warranty the buyer protection from any liens or encumbrances from owners before the most recent one.
This is a non-warranty deed that doesn’t protect the buyer from any defects with the bought property. This type of transaction usually happens between parties who are personally or professionally related.
Special Purpose Deed
Such deeds also offer minimal protection to the buyer and are usually held by someone in an official capacity. Examples include tax deeds, executor’s deeds, administrator’s deeds, etc.
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