There seems to be a lot of confusion as to what is necessary to convey title to real property. Generally, a deed is necessary to convey title from one party to another. I’ve come across many people who try to convey property using a “Bill of Sale”. A Bill of Sale can be used for conveying personal property, but not real property. Other times, people try to convey land using a “Contract for Deed”. This often creates legal ramifications for the parties that were unintended at the time of the original transaction. It becomes burdensome for the buyer and seller to finalize the transaction after the full purchase price has been tendered. Also, it is important to note that oral agreements for the conveyance of property are rarely enforceable. So it is best to at least get something in writing, even if it is not in the preferred form.
That being said, the best way to convey property is by a deed that has been notarized and recorded with the County Clerk. There are several types of deeds depending on the nature of the transaction. Does the Seller want to add conditions to the sale such as to retain the minerals? Does the Seller wish to retain a life estate in the property? Does the Seller wish to disclaim any environmental matters? Does the Seller wish to warrant the title to the property? All of this can change the language necessary in your deed.
Thus, while there is no “standard form” for a deed, there are certain rules that apply if a deed is to be valid. For instance, the intent to convey property must be clear from the wording; the property must be sufficiently described; and the deed must be signed and acknowledged by the grantor in front of a notary. Having said this, it is not true that all deeds are created equal. In particular, when it is a grantor’s intention to accomplish a specific objective and limit liability in doing so, the form and wording of a deed can be critically important. Always consult a real estate attorney when contemplating the transfer of property.
Finally, there is no requirement that a deed be recorded in the county clerk’s real property records in order to be valid – only that it be executed and delivered to the grantee. But it is typically problematic to not record the deed, even though the unrecorded deed itself is valid. Unrecorded original deeds are often misplaced over time. Recording a deed gives notice to the world of the transfer and, of course, establishes priority in the event an unscrupulous Seller gives more than one deed to the property.
Recording also makes it easier for title companies to research and insure the chain of title. Title companies insist on recording for this reason. Using a title company is always advisable in a Real Estate transaction and it could potentially protect both the Seller and the Buyer. Recording your deed will also inform the taxing authorities where they should send the ad valorem tax bill.
If you have any additional questions about deeds or your property in general, please feel free to contact us.