Transfer of Title
Title is the evidence of ownership. This topic covers how title passes from one party to another, the types of deeds and their warranties, and how public recording and title assurance protect ownership. A broker overseeing closings must recognize when a title problem should halt a transaction.
How Title Transfers
Title can transfer voluntarily (by deed during life or by will at death) or involuntarily (by descent when there is no will, by escheat, by foreclosure, by eminent domain, or by adverse possession where someone openly, notoriously, hostilely, and continuously occupies land for a statutory period). For a deed to convey title it must be in writing, name a grantor with capacity and a grantee, contain words of conveyance and an adequate legal description, be signed by the grantor, and be delivered to and accepted by the grantee during the grantor's lifetime.
Types of Deeds
Deeds differ in the warranties they provide. A general warranty deed offers the most protection: the grantor guarantees title against all defects, including those arising before the grantor owned the property. A special (limited) warranty deed warrants only against defects arising during the grantor's ownership. A bargain and sale deed implies the grantor holds title but adds few or no warranties. A quitclaim deed offers no warranties and conveys only whatever interest, if any, the grantor has; it is often used to clear a cloud on title. A broker should know which deed a transaction calls for.
Recording and Title Assurance
A deed is valid between grantor and grantee upon delivery and acceptance even if never recorded. Recording in the county's public records gives constructive notice to the world and establishes priority against later claims, which is why prompt recording matters. Actual notice is direct knowledge; constructive notice is what the records or possession would reveal. Title assurance comes from a title search, an abstract or attorney's opinion, and title insurance, which protects the insured against covered defects, liens, and encumbrances not excepted from the policy.