Deeds: Property Rights and Transfers

• Deeds detail property rights and transfers.

Habendum Clause

• Modifies rights in a deed, using phrases like "to have and to hold, except for/including…".
• Can reserve mineral rights to the grantor.
• May include rights to common areas, like in a condominium or gated community, subject to utility easements.

Lis Pendens

• Lis pendens signifies a pending legal action affecting property title.

Elements of a Deed

• Grantor's intent to transfer property.
• A granting clause explicitly stating the purpose of conveyance, such as "I hereby convey and warrant…".
• Signature of the grantor.
• Names of all parties involved in the transaction.
• A legal description of the property, not just the address.
• Consideration (something of value exchanged).
• Must be in writing to be legally enforceable.
• Delivery, typically accomplished by recording the deed.

Covenants of a Deed

• These are warranties provided by the grantor.
  • Covenant of Seisin: Grantor has rightful ownership and the right to convey the property.
  • Covenant Against Encumbrances: Guarantees no undisclosed encumbrances against the title.
  • Covenant of Quiet Enjoyment: Ensures the grantee's unimpaired use and enjoyment of the property without disturbance.
  • Covenant of Further Assurance: Obligates the grantor to perfect the grantee's title if defects are found later.
  • Covenant of Warranty Forever: Requires the grantor to defend the buyer against superior title claims.

Types of Deeds

• Different deeds offer varying levels of protection and have specific uses.
  • General/Full Warranty Deed: Offers all covenants, the bundle of rights, and liability for title defects, even those predating the seller's ownership; it is the most comprehensive and protective.
  • Special Warranty Deed: Conveys the bundle of rights and warrants clear title only during the seller's ownership period, limiting liability.
    • Commonly used in commercial transactions, such as corporations deeding property.
  • Quit Claim Deed: Transfers any rights the seller has without guaranteeing they exist or ensuring a clear title, and it doesn’t affect the mortgage.
    • Useful for transfers to subsidiaries where no warranty is needed.
  • Special Purpose Deeds: Used for specific situations, such as foreclosures and estate settlements.
    • Trustee's Deed: Used in non-judicial foreclosures, where a trustee sells the property.
    • Personal Representative Deed: Used when an estate goes through probate, and a court-appointed representative manages the property transfer.

Foreclosure

• Foreclosure involves different types of deeds and processes.
  • Deed of Trust: Secures a loan, conveying equitable title to a trustee; the trustee can initiate foreclosure if the borrower defaults, using a Power of Sale Clause.
  • Deed of Conveyance: Transfers ownership of property.
    • Warranty Deed: Guarantees the seller holds clear title.
    • Deed of Reconveyance: Releases the lender's lien when a mortgage is fully paid off.
  • Non-Judicial Foreclosure: Does not involve court proceedings due to the Power of Sale Clause in the deed of trust, allowing a trustee's sale.
    • Follows a statutory process, including a Notice of Default, a reinstatement period, and a public auction.
    • Borrower has no right of redemption after a non-judicial foreclosure.
  • Judicial Foreclosure: Court-ordered foreclosure leading to a Sheriff's Sale, with a 6-month right of redemption for the owner.
  • Judicial Deed: Issued under court order, typically a Sheriff's Deed given to the winning bidder at a Sheriff's Sale.
  • Deed in Lieu of Foreclosure: A borrower transfers property interest to the lender to satisfy the loan and avoid foreclosure.

Stopping Foreclosure

• It can be stopped by reinstating the loan.
  • Borrowers can request a payoff quote to determine the total amount needed to pay off or reinstate the loan.
  • Reinstatement Quote specifies the amount to bring loan current, immediately halting the foreclosure process.
  • Equitable Redemption: Using funds to bring mortgage payments current while in default.
  • REO (Real Estate Owned): If no bid is made at auction, the property reverts to the bank; potential buyers can still make offers, often lower than the outstanding balance.