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Guide to Transferring Title of Property

This blog post is designed to assist in transferring title (ownership) of real property. Section one will discuss the three most commonly used deeds and their respective differences and benefits. Section two will go through the process (step by step) of filling out a deed and recording it with your county’s register of deeds (land records office). Section three will highlight a few of common issues that arise in the transfer of title and how to avoid them. Note that it is important to check your state’s specific laws and recording requirements as this is written in general terms.

I.         Selecting the Right Type of Deed

The first thing to consider when preparing to transfer title of property is which type of deed will serve your interests best. A deed is a legal document that conveys title of real property. Deeds can be tailored to include whichever warranties (guaranties) and covenants (promises to do/refrain from doing certain things) you want, but there are a handful of standard deeds which are commonly used. The three most common deeds are warranty deeds, quitclaim deeds and covenant deeds.1 The differences and benefits of each are as follows:

  • Warranty Deeds provide six covenants – three present promises and three future guarantees from the grantor to the grantee. The grantor promises that presently: 1) she owns the property; 2) she has the right to transfer the property; and 3) there aren’t any liens, debts or other encumbrances tied to the property. The grantor further guarantees that: 4) she will defend the new owner if a title issue arises; 5) she will take necessary steps to rectify any title issue; and 6) the new owner will enjoy full use of the property without interruption due to title issues. Therefore, if a title issue2 arises after the transfer, the grantee can hold the grantor liable for a breach of warranty.3
  • Quitclaim Deeds,as the name implies, are a way the grantor “quits” (releases) any claim she has to the title, but nothing more. All that it conveys is the interest that the grantor has in the property currently (which may in fact be none); in other words, it offers no warranties (guaranties), etc.
  • Covenant Deeds (also known as special warranty deeds) provide the same warranties that warranty deeds provide but are limited to the extent that the facts giving rise to the conflicting claim occurred during the grantor’s ownership.4

Warranty deeds provide the grantee with the most protection by holding the grantor liable for breach of warranty. Although warranty deeds provide six covenants, it is unnecessary to spell out the six covenants. Simply stating “Warranty Deed” on the deed document implicitly refers to the six covenants by law. Note that your county’s treasury office must certify that taxes have been paid before recording the deed with your county’s register of deeds office (varies on jurisdiction).

Quitclaim deeds are commonly used among family members in instances where there are no title issue concerns. For example, parents who lived on the property for many years without any title issues who are transferring title to their child. Typically, they will not be too concerned about title issues arising in the future since they would have presumably arisen already. Additionally, due to the familial nature of the transfer the child will not be so worried about recourse as she will not be “going after” an adversarial stranger.

Covenant deeds are often used when the grantor does not feel comfortable granting warranties related to activity that may have occurred before she acquired the property, unlike warranty deeds which the grantor feels comfortable taking responsibility for all title issues, even those that were caused by previous owners of the property. In some states, a covenant deed requires specific language, and it is a crime to use the term “warranty” if the grantor is not actually granting an absolute warranty deed.5 Note that quitclaim and covenant deeds do not need tax certification from your county’s treasurer’s office prior to being recorded with your county’s register of deeds. As you can see from the differences between each type of deed, it is important that you check which type of deed you are granting or receiving.6

II.        Process of Recording a Deed

The following steps provide a general guide (follow your state’s guidelines) for completing and recording a deed:

1) Choose which type of deed you want to use. Many title insurance companies and register of deeds websites have templates available for free.7

2) Fill in all the required information accurately, including the name of grantor and grantee, the property’s address, amount of payment received for the transfer (consideration) and any related terms, and a metes-and-bounds description of the property (identified by natural landmarks). Make sure the deed follows all the recording requirements,8 which can be found on your county’s register of deeds website.

3) The grantor is required to sign the deed in the presence of a notary (who will subsequently notarize the deed). Make sure to check your state’s guidelines as many states have allowed remote notarization due to COVID-19.9 However, some such directives have been subject to litigation. For example, Michigan Governor Whitmer’s Executive Order 2020-87 which included allowance for remote notarization due to COVID-19 was ruled unconstitutional by Michigan’s Supreme Court as of October 2, 2020.

4) For warranty deeds, schedule an appointment with your county’s treasurer’s office to bring in your deed, or mail them the deed, or submit it to them online through an approved company for a tax certification (this varies on jurisdiction).

5) Schedule an appointment with your county’s register of deeds to bring in your deed, or mail them the deed, or submit it to them online through an approved company to be recorded. You will be required to pay a recording fee. Additionally, you will be required to pay a transfer tax, but a number of exemptions are available, like if the transfer is between spouses or if the consideration is less than $100.

6) Once your deed has been successfully recorded, you are required to fill out and submit a property transfer affidavit to your local assessor within 45 days (this varies on jurisdiction); sometimes this is done through your county’s treasurer’s office or your city hall. This can be recorded in person at your local assessor’s office, or mailed to your assessor, or submitted online to them through an approved company.This alerts the assessor to the title transfer which typically uncaps the property’s tax rate. Unless you are eligible for an uncapping exemption,10 the assessor will reassess your property’s value and will assign a new property tax rate.11

III.      Common Issues

1) “Due on Sale” Clause – If there is a mortgage on the property being transferred, make sure to check if there is a “due on sale” clause in the loan documents. A “due on sale” clause means that the mortgage must be paid in full before any transfer of title can be made. This is true even if you are transferring title to an entity that you own entirely. If this is the case, consult with your lender about the transfer and what options might be available.

2) Pending Zoning Proceedings – If the grantor is in the process of a variance or special use permit application (in attempt to change the property’s zoning restrictions), the transfer can terminate the proceeding as the title will be no longer held by the applicant (even if you are transferring title to an entity that you own entirely). 

3) Effects on Title Insurance – Generally, title insurance cannot be assigned (carried over) to the grantee, even if you are transferring title from yourself to your own entity.12 Therefore, if you are the grantee, it is worth considering taking out your own title insurance policy and using a warranty deed in order to provide protection in the event of a title issue, even when you are transferring title to your own entity.13 Additionally, you should consider requesting an endorsement from your policy’s underwriter, if available, which can extend the policy to cover your entity if you feel it is worth it. These are often pretty cheap.

Hopefully you found this blog post helpful in understanding the three common deeds, the transfer of title process and common issues to avoid.

  1. Knud E. Hermansen, Deeds: A Primer for Surveyors, Univ. of Me., 

  2. For example, if it turns out that there is a lien (a right to possess property of another person until the debt which is secured by the property is discharged) that was incurred by a previous owner, the creditor has an interest in the property to get paid for the debt which was secured by the property. Sometimes this can allow the creditor to force a sale of the property in order to get paid. 

  3. Note that this is sometimes referred to as a general warranty deed, not to be confused with a special warranty deed. 

  4. Knud E. Hermansen, Deeds: A Primer for Surveyors, Univ. of Me., 

  5. E.g., Mich. Comp. Laws § 750.275 (1931). 

  6. Knud E. Hermansen, Deeds: A Primer for Surveyors, Univ. of Me., 

  7. See, e.g., Forms Library by State, Madison Title Agency, 

  8. For example, the tax identification number and the name and address of the person who drafted the deed all must appear on the deed. There are also a number of formatting requirements that you should ensure are met. 

  9. State Electronic Signatures, Recording, and Notarization Laws for Real Estate Transactions: Quick Reference Tracker (US), Westlaw (available in Practical Law, Real Estate section) (last updated Nov. 18, 2020). 

  10. Check your state’s list of exemptions to see if your title transfer qualifies for an uncapping exemption. Such exemptions are often available for inter-family transfers. 

  11. Completing And Recording Deeds, Sacramento Cnty. Pub. Law Libr., 

  12. If you are transferring title to an entity that you own, feel free to contact your title insurance policy’s underwriter and verify whether the policy will continue and cover your entity as well. 

  13. David M. Goldberg, Real Estate for the General Practitioner § 1-8 (2018), LexisNexis. 

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Josh Goldman

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