Grant Deed

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on June 08, 2023

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What Is a Grant Deed?

A grant deed is a legal document that transfers property ownership from one party (the grantor) to another (the grantee). It is typically used when transferring real estate but can apply to other forms of property.

It outlines the terms of the transfer and includes specific promises or covenants on the part of the grantor, who is responsible for conveying ownership rights. A grant deed must be signed and notarized before it becomes legally binding.

This deed contains specific terms guaranteeing that the property's title is free and clear from any encumbrances, liens, or other claims that arose during the grantor's ownership of the property.

However, it does not provide a warranty against claims or encumbrances prior to this period.

The grant deed supports the transfer of title and ensures that all parties are protected in the transaction. Signing a grant deed certifies that all important information has been transparently disclosed, so there are no surprises later on.

What Must Be Included in a Grant Deed

Grant deeds are generally reliable documents used to transfer the property title from one person to another. The following information must be included in a grant deed:

Legal Description of the Property

Knowing the legal description of a property is an important step in understanding its worth and purpose. A grant deed has a significant role in this regard, as it provides an official reference highlighting the street address and how it is listed on county records.

In addition to the basic information, a grant deed can also contain the property tax assessor’s parcel number (APN), making it useful for tax assessment purposes.

Understanding the legal description of a property is vital to being a responsible homeowner or investor.

Title Company Confirmation

Title companies play an essential role in the property market. They are responsible for confirming that a title for a particular building or parcel of land is clear of any claims by other parties (often referred to as third parties).

Grant deeds include wordings that assure the grantee that the title company has conducted a thorough title search for the property, and no such claims have been revealed throughout the period in which the grantor owned it.

However, grant deeds do not account for encumbrances from previous owners, unlike general warranty deeds, which can also provide coverage for such instances. Thus, performing due diligence before buying or selling a property is vital to safeguard against potential issues.

Notarization and Filing

Crucial information must be included in a grant deed, such as the names, addresses, contact details, and signatures of the grantor and grantee. Then, notarization may also be required depending on the state where the property is located.

A warranty deed may be notarized by a public notary and then filed with the county recorder or county clerk. According to the municipality, this process may come with an additional transfer tax.

Property owners must take note of the laws in their state when transferring ownership. Missing any required steps could have serious consequences, so property owners must be aware of their local laws regarding filing deeds and transfers.

Grant Deed Inclusions

Other Types of Deeds

Aside from grant deeds, there are other types of deeds, which include:

General Warranty Deeds

This type of deed guarantees that there are no concealed title issues concerning the property in question, including any former complications occurring before its acquisition by the grantor.

This assures the grantee that the property has a clean title and that the seller will be liable for any issues that may arise. For instance, if a problem with the title arises at any future point after transferring ownership, the grantor will be responsible for all related legal costs.

A general warranty deed guarantees a good and clean title and promises the buyer will not encounter any legal issues with the property in terms of ownership. The disadvantage of this type of deed is that if a dispute arises, it can take some time and money, which could be costly.

Quitclaim Deeds

A quitclaim deed is a document used in real estate that moves ownership from the grantor to the grantee. However, it does not guarantee a clear title or certify that the grantor has the legal right to transfer the property.

Instead, it streamlines the transfer by signifying that the grantor relinquishes all interest held on the property. This setup results in a faster transaction but does not offer the same guarantees that other types of deeds can provide.

This form of deed will not usually provide any protection for the grantee against other claimants or liens on the property, which is why it is best used when transferring between known parties with previous knowledge of the situation, such as family members or close friends.

Quitclaim deeds often come into play when people give a gift of property or consolidate ownership, making them an important tool to understand when dealing with potentially complicated titles and mortgages.

Tax Deeds

A tax deed effectively gives a government body ownership of a property if the owner fails to make the necessary payments on associated taxes.

This document is issued as a legal right to conduct a sale to gain back what is owed. This process is typically done through auctions, which are referred to as “tax deed sales.”

Once sold, property ownership is granted to the purchaser from these sales. It offers them an opportunity to invest in real estate at an often discounted rate compared to current market value.

All parties benefit from this process, with governments recouping costs for delinquent taxes and buyers saving on potential real estate investments.

Grant Deed vs Deed of Trust

Grant deeds are legal documents that transfer real estate ownership from one party to another for a specified price. They contain the full description of the property, the names of both parties involved in the transaction, and the sales price.

The grant deed guarantees that the grantor is currently the rightful owner but does not guarantee against any title defects present before they acquired the title.

In contrast, a deed of trust is a legal document that secures a loan against real property. The lender may foreclose on the property without going to court if the borrower does not make payments.

This makes foreclosure faster and less expensive than with a mortgage deed, as a court hearing is not required. The proceeds of any sale or auction go directly to the lender.

The key difference between a grant deed and a deed of trust is the presence of a loan and subsequent obligations. A grant deed allows for the transfer of ownership from one party to another without retaining any future rights over the property.

In contrast, with a deed of trust, the borrower and lender will have an ongoing relationship until repayment or transfer to another party. In the event of non-payment, lenders may foreclose on the property to seek repayment, a right that is not available with a grant deed.

Final Thoughts

A grant deed is a legal document that is used in real estate transactions and provides evidence that the title or ownership of a certain property is being transferred from a seller (the grantor) to a buyer (the grantee).

In most cases, the seller must "grant" their right, title, and interest in the property to the buyer. It includes details like the parties involved in the transaction, a description of the property, legal warranties, and sometimes other important information if state laws require it.

In addition to transferring ownership of the property and verifying sellers have clear title over it, grant deeds also provide some protections for buyers as it obligates the seller to confirm that there are no liens or encumbrances on the property during the period of their ownership.

Many other types of deeds can be used to transfer property ownership, such as general warranty deeds, quitclaim deeds, and tax deeds. However, grant deeds are one of the most reliable legal documents that can be used in this type of transaction.

Thus, understanding how grant deeds work is essential when buying or selling a home as they offer undeniable assurance of valid transfer of rights from the seller to the buyer. If you wish to buy or sell property, consult a mortgage broker who can support you through this process.

Grant Deed FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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