In Tennessee, there are different types of Deeds. Before I get into that, though, let me define what I mean by "Deed." It can become confusing because term "Deed" is often used to refer to a Deed of Trust. A Deed of Trust is the document that is recorded in Tennessee securing the property as collateral for a Lender. In short, that is not the document that I am talking about. I am talking about a Deed that someone signs conveying his or her interest in real estate to another person or entity. In our office, this is most frequently a Warranty Deed. However, what many people do not realize is that the Warranty Deed is actually a specific type of Deed. The type of Deed that is used defines the guarantees that the Grantor (often, the Seller) is making to the Grantee (often, the Buyer). This may make more sense if I define the types of Deeds.
- Warranty Deed. As I mentioned, this is probably the most common type of Deed used in real estate transactions. In this type of Deed, the Grantor is providing a warranty to the Grantee that he or she is conveying good and marketable title. The Grantor is stating that he or she owns the property and has the right to convey it.
- Quitclaim Deed. This is probably the second most common type of Deed that we see. In this Deed, the Grantor makes no claims as to the title. In essence, the Grantor is saying, "whatever interest I have in this property, I give to you." This means that the Grantor could actually have no interest in the property, 100% of the interest in the property, or any interest on the spectrum in between those two extremes. This type of Deed provides the least amount of title security to the Grantee. The Grantor makes no warranties as to the title.
- Special Warranty Deed. This type of Deed is somewhere in between the two Deeds above. In a Special Warranty Deed, the Grantor is stating that he or she did not have any title issues while he or she owned the property, but there are no other guarantees involved. This is often used in commercial real estate transactions.
- Other Miscellaneous Deeds. There are several other miscellaneous Deed titles that are used, but those Deeds are usually somewhat synonymous to the Deeds described above.
It should be noted that the type of Deed does not affect the way the property is titled. For more information on the way property can be titled, see my previous blog, "Options for Titling Real Estate in Tennessee." However, it is important to know the type of Deed that is being used so that you, as the Buyer or Seller, know exactly what you are guaranteeing or receiving. Our firm would be glad to help guide you to the correct Deed that should be used in your situation.
If you are unsure how your property is titled or want to see if there are better options for you, contact us and we would be glad to find the best option for your situation.
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