Transfer of Property, Title, and Escrow

A grant deed impliedly warrants the grantor has not already conveyed the property and that it is free of undisclosed encumbrances made by the grantor; it is the most common deed in California.

A quitclaim deed conveys only whatever interest the grantor holds, with no warranties, and is often used to clear clouds on title.

A general warranty deed contains the broadest express covenants, with the grantor defending title against all claims.

Recording a document provides constructive notice, so the public is legally presumed to know of the recorded interest.

The chain of title traces successive recorded owners, and a break creates a cloud on title; a preliminary title report discloses the current condition of title.

To be recorded, a deed generally must be acknowledged before a notary public who verifies the grantor's identity.

Title insurance indemnifies the insured against losses from title defects, liens, or encumbrances existing when the policy was issued.

It is a one-time premium covering past title problems, not future physical damage or market declines.

Lenders typically require a lender's title policy at closing to protect their security interest.

An escrow holder is a neutral third party that holds documents and funds and carries out the parties' mutual written instructions.

A valid escrow requires a binding underlying contract and conditional delivery of documents to the escrow holder.

Escrow closes only when all agreed conditions are met, and the holder acts strictly and impartially.

California's documentary transfer tax is generally $0.55 per $500 of value, calculated on the consideration paid less any assumed liens.

Some cities impose an additional transfer tax on top of the county rate.

The documentary transfer tax is typically paid at closing through escrow.