2.2 Deeds, Title Transfer, Title Insurance, and Recording

What makes a deed valid

Title is the legal evidence of ownership; a deed is the written instrument that transfers title from a grantor (giver) to a grantee (receiver). Memorize the validity elements — the exam tests them as a checklist:

1. Grantor with legal capacity (competent, of legal age).
2. Named, identifiable grantee.
3. Consideration stated (even nominal, like "$10 and other good and valuable consideration").
4. Words of conveyance (granting clause).
5. Legal description of the property.
6. Grantor's signature (the grantee need not sign).
7. Delivery and acceptance during the grantor's lifetime.

A deed is not valid simply because it is signed and notarized — it must be delivered to and accepted by the grantee. A signed deed locked in a drawer transfers nothing. Notarization (acknowledgment) is generally required only to record the deed, not to make it valid between the parties.

Deed types ranked by protection

The general warranty deed carries the key covenants: seisin (grantor owns it), right to convey, against encumbrances, quiet enjoyment, and warranty forever. A quitclaim deed is the exam's favorite trap: it conveys whatever interest the grantor has — which might be nothing — and provides zero warranties. A buyer who accepts a quitclaim from someone with no title receives nothing and cannot sue on covenants.

Voluntary vs. involuntary transfer

• Voluntary: sale (deed), gift, dedication, or by will (devise) or descent.
• Involuntary: escheat (property reverts to the state when an owner dies with no heirs or will), eminent domain, foreclosure, tax sale, or adverse possession.

Adverse possession transfers title without a deed if a trespasser's use is — remember OCEAN — Open, Continuous, Exclusive, Adverse (hostile), and Notorious, for the statutory period. When an owner dies with a valid will the transfer is testate (by devise); without a will it is intestate (by descent to heirs).

Recording, notice, and priority

Recording the deed in the county land records is not required to make a transfer valid between grantor and grantee, but it is critical against the rest of the world. Recording gives constructive notice — everyone is legally charged with knowing what the public record contains. Actual notice is what a party truly knows; constructive notice is what the record imputes.

Most states use a race-notice rule: a later buyer who pays value and records first without notice of a prior unrecorded deed wins. This is why the order of recording matters.

Worked numeric: the double-sale priority trap

A dishonest owner deeds a lot to Buyer A on March 1 for $200,000; Buyer A does not record. The owner deeds the same lot to Buyer B on March 10 for $210,000; Buyer B, who knows nothing of A, records on March 11. Under a race-notice statute, Buyer B owns the lot because B paid value, lacked notice, and recorded first. Buyer A's remedy is a lawsuit against the seller — not the property. The lesson: record immediately.

Watch the notice variable carefully. If Buyer B had actual knowledge of Buyer A's earlier deed — say B walked the lot and saw A living there, which is itself a form of notice — B could not claim protection, and Buyer A would prevail despite recording second. Possession can give inquiry notice: a buyer must investigate anyone occupying the property and is charged with what a reasonable inquiry would reveal. So the priority answer depends on value paid, order of recording, and good faith without notice — drop any one element and the outcome flips.

Proving and protecting title

Marketable title is title a reasonable, well-informed buyer would accept — free of undisclosed liens, serious defects, or clouds that expose the buyer to litigation. A cloud on title is any claim or document that might impair title; a quitclaim deed is often used to remove one.

Evidence of title comes from a chain of title (the recorded history of ownership), summarized in an abstract of title, on which an attorney gives an opinion of title. Today most buyers rely on title insurance instead.

Key traps:

• Title insurance covers past, already-existing defects (forgery, undisclosed heirs, recording errors), not future events.
• A lender's policy does not protect the buyer — a buyer who wants protection must buy a separate owner's policy.
• Coverage shrinks as the loan is paid down for the lender, but the owner's policy amount stays fixed.
• Standard policies exclude items a survey or inspection would reveal unless extended coverage is purchased.

Finally, title (the right) is distinct from possession (physical occupancy) and from the deed (the document). A buyer can hold title while a tenant holds possession; a person can hold a deed that is void for lack of delivery and therefore hold no title at all.