Unlock the Legality of Electronic Signature with Warranty Deed Documents

How to eSign a document: electronic signature lawfulness for Warranty Deed

All right, in today's video, we're gonna discuss types of deeds. Now there's probably about a dozen or so of the types of deeds we're gonna discuss, and you need to know these for your real estate licensing exam. Very important. Now, understand just a little review here, I did another video that outlined the basics of deeds and what contents or what essential elements must be in a deed for it to be valid. If you have not previewed that video, please go and watch that video before you go to this video, and I'm gonna leave a link right up here in your upper right hand corner of your screen. That's a link to the video. Watch that one then come back to this one. And if you've watched that video, you will have learned that the deed is the proof or the evidence of a transfer of title or a conveyance of title. The other thing that the deed does, it represents the quality of the legal interest, what we call the quality of the estate, the type of deed determines quite frankly the quality of the estate. And you're gonna find out what that exactly means in the video here. So I got a PowerPoint ready to go. So let's go over the computer and we'll go through the different types of deeds. All right, so let's jump to the different types of deeds that you're gonna have to know if you wanna pass your real estate licensing exam. Now the first type of deed I'm gonna talk about is what's called a general warranty deed, or sometimes called just simply a warranty deed. Now the grantor guarantees the grantee title. Now, remember, the grantor is the seller or the person that's it's conveying title and the grantee is the person that's receiving the title, usually the buyer. All right, so the general warranty deed does a lot of things and you really got to know the breakdown and the contents of this deed. Number one, it conveys, remember conveyance as simply means transfer. It conveys the highest and most complete ownership. The grantor also guarantees free, clear, marketable title, even for title issues that pop up prior to their ownership and it also includes certain warranties. All right, the first type of warranty I wanna talk about is quiet enjoyment and as you can see, I put the definition to all of these warranties on your screen. Quiet enjoyment is a covenant that promises that the grantee or the tenant of an estate in real property will be able to possess their premises with peace without any disturbances by hostile claimants meaning they're gonna be able to enjoy that property. without a previous owner basically making a claim against their interest in that property. Number two, covenant of season. Now this covenant promises that no one else has any conflicting promissory interest, either present or future. It's basically saying that when the grantor uses this deed to transfer convey title, that they're assuring the grantee that there's gonna be no one that pops up that says, "Hey, this is my property or I have some ownership interest in this property." Number three, free from encumbrances, meaning free and clear, refers to the ownership without any legal encumbrances such as a lien or mortgage basically says that, "Hey, grantee, you're gonna receive the title to this property free and clear of all liens and encumbrances." Number four, the right to convey title. This means the grantor has the legal right and is legally entitled to transfer the property to the grantee. Number five, covenant of further assurances. It's basically a promise that upon demand by the grantee, the grantor will execute any additional documents in the future should it be necessary to fix any defects in the grantees title. Now this does happen occasionally and typically it's administrative error. There was a misspelling on the deed, or there was an incorrect legal description or non complete legal description, those types of things. And if the grantor is giving a general warranty deed or a warranty deed to the grantee, then they make this affirmation, they make a promise that if there's a future issue, they will correct it. And then the last one is covenant of warranty. We call this indemnification. This is basically a guarantee to the grantee, the title will always be good and that the grantor will compensate the grantee if there is any issues that are found later after closing, you know, if there's a title defect or a lien against the property, those types of things, it's indemnification. The grantor is saying, I will make the grantee whole from any financial loss. So that is a general warranty deed. It guarantees, the grantor is guaranteeing good title. The next deed I wanna talk about is a special warranty deed. The special warranty deed basically does all the same stuff that a general warranty deed, it guarantees title. It has all the warranties, but there is one exception. The seller or the grantor is only saying, "I will give all of these guarantees only during the period in which I owned the property." Unlike the warranty deed, where the grantor is giving that guarantee all the way back, even during the prior ownership, the special warranty deed just says that the grantor is only gonna make those guarantees during that grand tours period of ownership. By the way, banks overwhelmingly use a special warranty deed when they are selling bank foreclosed properties. The next deed is the grant deed. Now the grant deed looks a lot like the warranty deed. The difference is the grantor is not guaranteeing title, they're implying. It's basically an opinion they're saying, "Listen, I will give you all of these things because I am implying that I have all these things to give you, I'm only doing this or giving you the implication of good title during my time of ownership. But the one thing that it does lack is the guarantee. That's why we wanna make sure that if we're going to receive as a grantee, if we're gonna receive title to property using a grant deed, we wanna make sure that we have an abstract updated or that we have title insurance. A bargain and sale deed. Now, a bargain and sale deed offers absolutely no warranties reindemnification and unlike the quit claim deed, which we're gonna talk about next, the grantors do acknowledge that they have ownership. They just don't know how much. So they're saying, "Listen, I know I have some ownership interest, and I know I possess ownership interest, but I don't know what kind, what the quality is or how much, but I do have some and you can have it." And there's no guarantee of clear, free, marketable title. So if you receive ownership or the interest of a grantor. that used a bargain and sale deed, you could literally be getting ownership to property that has all kinds of liens and encumbrances against it. A quitclaim deed. Now a quitclaim deed, again, offers no warranties. The grantors do not acknowledge that they even have any type of ownership interest in the property. There is no guarantee of free, clear, marketable title. And they basically just say, "Listen, I think I might have ownership, but I don't even know that for sure but if I do, then here you go. You can have it." There's an old wise tale that said somebody one time in New York quitclaimed their interest in the Brooklyn Bridge and the grantee discovered that, well, the grantor absolutely had no ownership interest whatsoever in the Brooklyn Bridge so there was no conveyance of any title and it was perfectly legal to do because the quitclaim deed is not acknowledging they even have ownership. And it's kind of interesting because if you ever bought a railroad owned property, they use the quitclaim deed to convey title. So you'd want to make sure that you get a title search done and title insurance, for sure. All right. So another use of the quitclaim deed it's commonly used in a divorce proceedings where spouse A is awarded the property through the divorce proceedings and spouse B then uses a quitclaim deed to transfer their ownership interest to spouse A and it's also used in some jurisdictions to correct any kind of discrepancies that are found on the previous deed that conveyed title, for example, maybe an inaccurate legal description. A gift deed. A gift deed is unique to those that are conveying title to property by gift. So if you're gonna gift a piece of property to a nonprofit, let's say your church in that case, you would use a gift deed. The interesting thing about the gift deed and it's unique to the gift deed and that is the consideration part of the deed. Now from previous videos, if you've watched them, you know that consideration is an essential element of not only the deed but also the contract and it basically means the consideration means that there's an offer of something of value. Typically it's money. It doesn't have to be, it could be a pound of dirt. It could be diamond, stocks, most of the time it's money, but it's something of value. And in most deeds that's expressed in the deed as money in the amount of typically $1, that's the most common dollar amount. If a gift deed is used, basically the consideration paragraph is gonna say, for the love and affection of. You know, for the love and affection of a son or daughter for the love and affection of my church, that's actually how it will be worded and it's very unique to the gift deed. The deed of surrender. It's used in place of a quit claim deed to convey interest of a life estate or a remainderman interest. So if one, two, three main street, there is a life estate in place. There's a person, the life tenant that's they're living in the property, they have ownership interest, and there is also a remainderman who has a future ownership interest. Well, let's say everybody agrees to sell that property to somebody else. So to convey the interest of the life tenant and also the remainderman who has the future interest, then we'll use a deed of surrender. Now, if you don't understand what a life estate is up in the upper right hand corner of your screen, I'm gonna leave a link to a video where you can watch the video that talks about what a life estate is and how that works. Deed of release. We use this when a mortgage that's being used as collateral is paid in full, it clears the title from that debt. It's called a deed of release. Correction deed. Now, you need to know that a correction deed can also be called a reformation deed or a deed of confirmation. The real estate licensing exam may use those three terms interchangeably, and we use a correction deed to correct any errors, such as misspelled names on the deed that was used to convey title. Errors in the legal description or some other omission, remember on the deed that was used to convey title from the grantor to the current grantee. Session deed. This is specifically used to transfer title of street rights from a developer or sub divider to a governmental entity, such as a county or a state. So when a developer goes in and they develop a subdivision, now at some point the county or the city is gonna come in and take over control of those streets, maintenance, snow plowing, all of that stuff. So we gotta have a way to transfer that title interest and a session deed is used to transfer the street rights from the sub divider to that governmental entity Sheriff's deed also known as a referee's deed. A Sheriff's deed is used to transfer title for real estate or real property that's been sold at public auction. All right. So typically we see this in mortgage states, not deed of trust states, but mortgage states where the bank needs to foreclose on a property because the borrower defaulted, it goes to a sheriff sale and the sheriff auctions off the property on behalf of the bank. All right. So title in that property transfers by way of a public auction. Now, because the sheriff is acting on behalf of the public for the benefit of the public, there are no warranties or representations of the condition of the title. So whoever purchased that property, they're gonna get a Sheriff's deed and there maybe all kinds of liens attached to that property. So typically, if you go to a Sheriff's auction, the people that do this regularly, they have relationships with title companies and abstract companies, and they will research the title before they actually even go to the auction. That's typically what happens. Buyer beware, if you show up and you think you get a good deal, you may end up getting property that's leaned up. A tax deed. Now again, with a tax deed and the Sheriff's deed, there are no warranties or representations to the condition of the title. So investors are gonna need to do their research before going to the tax deed auction. Personal representative or executors deed. This is when somebody dies and there's a personal representative or an executor of the state that is tasked with selling off the property. So if there is a property that's sold and title transfers, a personal representative deed or an executors deed is gonna be used. And technically this is considered a judicial deed because the executor or the personal representative is signing the deed under the approval of the court. So that's why it's called a judicial deed. All right, let's take a look at bullet point number three, because it's very unique to these deeds right here. The deed requires the deed to state the full purchase price. Now, in the consideration part of the deed, we have to list what the consideration was in exchange for the conveyance of title, almost always it's $1. That's what we put in there. But because this is an executors deed or a personal representative deed, we actually have to put the full amount of the purchase price. And the reason we have to do that is because of the estate tax provisions or the estate tax requirement. So it's the only deed that absolutely requires the full purchase price to be put in the deed under the consideration section of that deed. Guardians deed. If there is a minor that has ownership interest in land or real property, I should say, and for whatever reason that title needs to be conveyed to somebody else. A minor does not have the legal capacity to do that. And if there's a legal guardian in place, then the legal guardian is gonna sign on behalf of that minor and the type of deed that's gonna be used is a guardian's deed. And then the last one is the director's deed. We use the director's deed to convey interest in real property when a public agency or a public entity sells off surplus land that that governmental body owns, they're gonna use a director's deed. (mumbles) The other thing that the real estate licensing exam likes to ask are questions that want you to solicit scenarios, meaning for this scenario, what type of deed is best. And I use the term best because there may be two potentially right answers, but they wanna know which is the best answer and that's why you have to know the details