2.2 Deeds, Title Transfer, Title Insurance, and Recording

Essential Elements of a Valid Deed

A deed is the written instrument that transfers title from grantor (seller) to grantee (buyer). To be valid it generally needs:

1. A competent grantor (of legal age and sound mind).
2. A named, identifiable grantee.
3. Words of conveyance (the granting clause, e.g., "do hereby grant and convey").
4. An adequate legal description of the property.
5. Consideration recited (often nominal, "$10 and other good and valuable consideration").
6. The grantor's signature (the grantee need not sign).
7. Delivery and acceptance during the grantor's lifetime.

Trap: title passes on delivery and acceptance, not on signing or recording. A signed deed left in a drawer transfers nothing. Recording is for notice, not validity.

Types of Deeds and Their Warranties

The deed type controls how much the grantor promises about the title. From most to least protective:

The general warranty deed typically includes covenants: seisin (grantor owns it), right to convey, against encumbrances, quiet enjoyment, and warranty forever. A quitclaim deed is the weakest: if the grantor owns nothing, the grantee receives nothing — but it is the fastest tool to release a possible claim or cure a title cloud.

Recording Acts and the Bona Fide Purchaser

When two parties claim the same land, the recording act decides priority. Most states use a race-notice rule: the later buyer wins only if they took without notice of the earlier claim and recorded first. A notice jurisdiction protects the last bona fide purchaser without notice even if they record later, while a pure race jurisdiction simply rewards whoever records first. A bona fide purchaser (BFP) is one who pays value and takes without actual, constructive, or inquiry notice of a prior interest.

Worked trap: Grantor deeds Lot 9 to Anna on March 1 (she does not record). On April 1 the same grantor deeds Lot 9 to Ben, who knows nothing of Anna's deed and records April 2. In a race-notice state Ben wins: he lacked notice and recorded first. Anna's remedy is against the grantor for fraud, not against Ben. This is exactly why recording promptly matters even though recording is not required to transfer title between the original parties.

Transfer of Title: Voluntary and Involuntary

Voluntary alienation is a transfer by the owner's choice — most commonly by deed (sale or gift) or by will (a devise of real property; the recipient is a devisee).

Involuntary alienation occurs without the owner's consent:

• Descent (intestate succession) — owner dies without a will; state statute distributes the estate to heirs.
• Escheat — owner dies with no heirs and no will; property reverts to the state.
• Eminent domain — government takes private property for public use through condemnation, paying just compensation (Fifth Amendment).
• Adverse possession — a trespasser gains title by open, notorious, continuous, hostile, and exclusive possession (sometimes "actual") for the statutory period.
• Foreclosure / tax sale — title transferred to satisfy a defaulted debt or unpaid taxes.

Trap: eminent domain is the government's power; condemnation is the legal process used to exercise it. Test items often swap the two.

Recording, Notice, and Priority

The recording system is a public, county-level index of land instruments. Recording does not make an invalid deed valid and is not required to transfer title between the parties. Its purpose is to give constructive notice and to set priority among competing claims.

Three kinds of notice:

• Actual notice — what a person truly knows.
• Constructive (legal) notice — what the public record imparts; once recorded, the world is charged with knowing it.
• Inquiry notice — facts (such as someone in possession) that should prompt a reasonable person to investigate.

Priority worked example: Owner deeds the same lot to Buyer A on March 1 (A does not record) and then to Buyer B on April 1. B records on April 2 without knowledge of A. Under a typical race-notice statute, B prevails because B took without notice and recorded first. The general rule of thumb: "first to record, first in right" — among parties without notice.

Title Evidence and Title Insurance

Before closing, the chain of title is examined. A title search traces the chain of title through recorded instruments; an abstract of title is a condensed history; an attorney's opinion or a title commitment flags exceptions. The marketability standard is marketable title — title a reasonable buyer would accept, free of undisclosed defects.

Title insurance indemnifies against pre-existing, hidden defects discovered later (forged deeds, undisclosed heirs, recording errors). Unlike other insurance, it covers past events, is paid by a one-time premium, and lasts as long as the insured holds an interest.

Standard coverage handles record defects; extended coverage adds matters a survey or inspection would reveal (encroachments, parties in possession).