2.2 Deeds, Title Transfer, Title Insurance, and Recording

Essential Elements of a Valid Deed

A deed is the written instrument that transfers title to real property from the grantor (seller/giver) to the grantee (buyer/receiver). Title itself is not a document — it is the legal right of ownership; the deed is merely the evidence of transfer.

For a deed to be valid the exam expects these elements:

1. A competent grantor (legal age and sound mind).
2. A named grantee identifiable with certainty.
3. Words of conveyance (granting clause), e.g., "I hereby grant and convey."
4. A legal description of the property.
5. Consideration recited (often nominal, "for ten dollars and other good consideration").
6. The grantor's signature (the grantee need not sign).
7. Delivery and acceptance during the grantor's lifetime.

Delivery, Acceptance, and Acknowledgment

Delivery and acceptance is the moment that legally transfers title — not the date the deed was signed or recorded. The grantor must intend to pass title presently, and the grantee must accept. A deed found in a drawer after death, never delivered, transfers nothing.

Acknowledgment is the grantor's formal declaration before a notary that the signature is voluntary. Acknowledgment is NOT required for a deed to be valid between the parties, but it IS required before the deed can be recorded. This is a frequent trap: an unacknowledged, delivered deed still transfers title — it simply cannot be entered in the public record to give notice to others.

Types of Deeds and Their Warranties

Deeds differ by the covenants (warranties) the grantor makes. More protection for the grantee means more liability for the grantor.

The general warranty deed includes covenants of seisin, against encumbrances, quiet enjoyment, further assurance, and warranty forever. The quitclaim deed carries no warranties at all — it is the weakest deed but useful to release a possible claim or cure a title cloud.

Voluntary and Involuntary Transfer of Title

Title changes hands two ways:

Voluntary alienation — the owner chooses to transfer:

• By deed during life (sale or gift).
• By will (a devise of real property; the giver is the testator).
• Dedication — a developer voluntarily gives land for public use (streets, parks).

Involuntary alienation — transfer without the owner's consent:

• Descent — owner dies intestate (no will); state intestacy law directs heirs.
• Escheat — owner dies with no will and no heirs; property reverts to the state.
• Eminent domain — government takes private property for public use (via condemnation) paying just compensation.
• Foreclosure — lien holder forces a sale for unpaid debt.
• Adverse possession — see below.

Adverse Possession

Adverse possession lets a trespasser acquire title through long, unauthorized occupancy. The claimant's possession must be (mnemonic OCEAN or CHANEN): Continuous, Hostile, Actual, Notorious (open), and Exclusive, for the statutory period (often 5 to 20 years, varying by state — a state-law detail, but the concept is national).

Worked scenario: Maria fences and farms a 10-foot strip of her neighbor's lot, openly and without permission, for the full statutory period. If she meets every element and brings a quiet-title action, she can be awarded ownership of that strip. Note the contrast with a prescriptive easement, which grants only a right to USE, not full ownership of the land.

Recording, Notice, and Priority

Recording is entering a deed or other instrument into the public land records of the county. Recording is not required to make a deed valid between the parties, but it provides constructive notice — the law treats the entire world as legally aware of the recorded interest, whether or not anyone actually reads it.

Notice types:

• Constructive (legal) notice — created by recording or by visible possession.
• Actual notice — what a person genuinely knows.

Priority generally follows the rule first in time, first in right for properly recorded interests, with the major exception of property-tax and special-assessment liens, which usually take priority over all other liens regardless of when they were recorded.

Chain of Title, Abstracts, and Marketable Title

The chain of title is the recorded sequence of owners back to the original source. A title search examines the public record to build that chain.

• An abstract of title is a summary of every recorded document affecting the property; an attorney's review of it produces an opinion of title.
• A cloud on title is any claim or document that impairs the chain; a suit to quiet title removes it.
• Marketable title is title free from reasonable doubt or serious defect — the standard a seller usually must deliver at closing.

A gap or unreleased lien in the chain makes title unmarketable until cured, even though the property may physically be perfectly fine.

Title Insurance

Title insurance protects against losses from defects that already existed when the policy was issued — it looks BACKWARD, unlike hazard insurance which looks forward. A one-time premium is paid at closing.

Covered defects include forged deeds, undisclosed heirs, errors in recording, and certain unrecorded liens. The Schedule B exceptions list items NOT covered (e.g., known easements, survey matters, items a buyer accepted). A buyer who wants protection beyond the lender's policy must buy a separate owner's policy — the lender's policy protects only the mortgagee, not the buyer's equity.